The Supreme Court just handed Donald Trump a massive legal defeat, but if you think the trade wars are cooling down, you haven't been paying attention. On February 20, 2026, the Court ruled 6-3 in Learning Resources, Inc. v. Trump that the President cannot use the International Emergency Economic Powers Act (IEEPA) to unilaterally slap tariffs on anything he wants. It was a major blow to the "Liberation Day" and "fentanyl" tariffs that have defined the last year of trade policy.
But here's the thing: the White House didn't blink. Within hours, the administration pivoted. While they're temporarily leaning on Section 122 of the Trade Act of 1974 for a 150-day "bridge" tariff, the real long-term play is a return to a familiar weapon: Section 232 of the Trade Expansion Act of 1962.
You might remember Section 232 from the first term's battles over steel and aluminum. It's the "national security" clause. Because the Supreme Court's recent ruling specifically targeted the IEEPA and didn't touch the President’s well-established authority under Section 232, the administration is now doubling down on it. It's a calculated move to keep the high-tariff wall standing while staying inside the lines the judges just drew.
Why Section 232 is the New Path of Least Resistance
The Learning Resources decision was about one thing: authority. The Court said the IEEPA—originally meant for freezing assets and blocking transactions during emergencies—isn't a tax tool. But Section 232 is different. Congress explicitly gave the President the power to adjust imports if they threaten national security.
This isn't just about steel anymore. The Department of Commerce, led by Howard Lutnick, is currently churning through a list of investigations that would make a supply chain manager’s head spin. We're talking about everything from robotics and industrial machinery to medical consumables and even wind turbines.
By framing these goods as "critical to national security," the administration can reimpose the duties the Supreme Court just struck down. It’s a legal workaround that’s much harder to challenge. Why? Because courts historically hate second-guessing what a President defines as a "security threat." If Trump says we can't depend on foreign-made transformers or semiconductors because it makes us vulnerable, the judiciary usually stays out of the way.
The Industries Currently in the Crosshairs
If you’re importing goods into the U.S. right now, the "win" at the Supreme Court might feel pretty hollow. While Customs and Border Protection (CBP) stopped collecting the IEEPA duties on February 24, 2026, the replacement Section 232 actions are already landing.
- Semiconductors: A 25% tariff on advanced logic chips and manufacturing equipment is already live. This specifically targets high-performance chips used in AI and data centers.
- Automobiles: The threat of a 25% tariff on cars and parts is back on the table. While USMCA-compliant vehicles (from Mexico and Canada) have some protection, others are in the line of fire.
- Critical Minerals: Processing equipment and refined minerals like polysilicon (used in solar panels) are under active investigation.
- Infrastructure: Think robotics, jet engines, and even the "non-metal" components of construction machinery.
The administration’s goal is "continuity." Treasury Secretary Scott Bessent has been vocal about this. He basically told everyone that between the new 150-day Section 122 "bridge" and the upcoming Section 232 expansions, the government's tariff revenue for 2026 won't move an inch. They aren't backing down; they're just changing the stationery the bill is printed on.
The Refund Mess Nobody is Talking About
Here’s the part that’s going to be a nightmare for businesses. The Supreme Court said the IEEPA tariffs were illegal. Naturally, every company that paid them over the last year wants their money back. We're talking billions of dollars.
Don't expect a check in the mail anytime soon. The Trump administration has already signaled they aren't going to hand out voluntary refunds. Trump himself called the ruling the work of "fools" and suggested the money stay where it is. If you want your refund, you're going to have to sue for it in the Court of International Trade.
This creates a weird, tiered system. Large corporations with massive legal teams will file for refunds and eventually get them. Small-to-medium businesses might find the legal fees more expensive than the refund itself. It’s a messy, protracted battle that will likely drag on for years, even as the "new" Section 232 versions of those same tariffs start being collected.
What You Should Do Now
The "wait and see" approach is officially dead. Trade policy is now moving faster than the court system can keep up with. If you're managing a business that relies on imports, you need to stop celebrating the SCOTUS win and start prepping for the 232 wave.
- Check the HTS codes: Don't just look for "steel" or "aluminum." The new investigations cover complex machinery and electronics. Check if your specific products fall under the broad "national security" umbrellas currently being reviewed by the Bureau of Industry and Security (BIS).
- Audit your IEEPA payments: Get your records in order now. You need a line-item account of every dollar paid under the invalidated IEEPA orders if you plan on joining a class-action or filing your own suit for a refund.
- Evaluate Section 122 exemptions: The 150-day "bridge" tariff has some carve-outs for things like fertilizers, certain pharmaceuticals, and USMCA-compliant goods. Ensure your customs filings are capturing these exemptions correctly so you aren't overpaying during this transition.
- Lobby the BIS: If your industry is under a Section 232 investigation, now is the time to submit comments. These investigations require a public comment period. Don't assume someone else is making the case for why your product isn't a "national security threat."
The Supreme Court tried to put the genie back in the bottle. The Trump administration just found a different bottle. Section 232 is the sturdier, more legally defensible version of the trade policy we've seen since 2025. It’s not going away, so you'd better get used to it.
Reach out to your customs broker today to confirm which of your current imports are now subject to the Section 122 bridge tariff and which are flagged for the upcoming Section 232 reviews.
