WASHINGTON, D.C. — In a stunning act of political defiance that has sent shockwaves through global markets, President Donald Trump signed a new executive order late Friday imposing a 10% global tariff on all foreign goods, just hours after the Supreme Court struck down his previous trade policies. The move, described by the President as a necessary step to protect American wealth, utilizes a rarely invoked provision of the Trade Act of 1974 to bypass the high court’s ruling, setting the stage for a renewed constitutional clash and deepening global supply chain disruptions.
Supreme Court Strikes Down 'Liberation Day' Tariffs
The catalyst for this sudden escalation was a landmark 6-3 decision handed down by the Supreme Court on February 20, 2026, in the case of Learning Resources, Inc. v. Trump. In a ruling authored by Chief Justice John Roberts, the Court held that the President lacked the authority under the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs on U.S. imports. The decision invalidated the administration's controversial "Liberation Day" tariffs, which had been in place since April 2025.
The ruling cut across ideological lines, with conservative Justices Neil Gorsuch and Amy Coney Barrett joining the Court’s three liberal justices and Chief Justice Roberts in the majority. They argued that while the President has broad emergency powers, the Constitution vests the specific power to tax and impose tariffs in Congress. "The Framers did not vest any part of the taxing power in the Executive Branch," Roberts wrote, delivering a stinging rebuke to the administration's interpretation of economic emergency powers.
Trump's Countermove: Section 122 and a 10% Global Tariff
Refusing to accept the defeat, President Trump moved with characteristic speed. Less than six hours after the ruling was publicized, he signed a new executive order implementing a blanket 10% tariff on all imports, citing Section 122 of the Trade Act of 1974. Unlike the IEEPA authority struck down by the Court, Section 122 allows the President to impose import surcharges of up to 15% for a maximum of 150 days to address "large and serious" balance-of-payments deficits.
"We have alternatives, great alternatives," Trump declared to reporters in the Rose Garden, dismissing the Supreme Court's decision as "defective" and calling the justices who voted against him "fools." The new order, effective immediately, is designed to replace the revenue lost from the voided IEEPA tariffs. However, legal experts warn that Section 122 comes with strict time limits; without Congressional approval, these tariffs will expire in mid-July 2026, creating a ticking clock for the administration's trade policy.
Global Markets and Supply Chain Disruptions
The uncertainty has already triggered volatility in financial markets. The US trade war impact has been compounding since late 2025, with the U.S. trade deficit widening to a record $901.5 billion last year despite—or perhaps because of—aggressive protectionist measures. Business leaders are scrambling to understand the implications of the new order. "This creates absolute chaos for planning," said a spokesperson for the National Retail Federation. "We went from thinking tariffs were gone at 10:00 AM to facing a new 10% tax by 5:00 PM."
Importers who were celebrating the potential refund of billions of dollars in collected duties are now facing a new reality. The import tax economic impact is expected to be felt swiftly by consumers, as businesses, weary from a year of volatility, are likely to pass costs directly to buyers. Supply chain managers are bracing for renewed bottlenecks at major ports like Los Angeles and Savannah, as companies rush to move goods before any further policy shifts occur.
Business News February 2026: What Companies Need to Know
For businesses navigating this landscape, the immediate future holds significant risk. The 150-day window of the new tariffs means that lobbying efforts in Congress will intensify immediately. Industries heavily reliant on international supply chains—particularly electronics, automotive, and apparel—should prepare for sustained cost increases. Furthermore, trade partners who had begun celebrating the Supreme Court ruling may now retaliate, further complicating the executive order trade policy 2026 landscape.
Political Fallout and Future Outlook
The political ramifications of this standoff are immense. Trump's public attacks on his own judicial appointees, Gorsuch and Barrett, signal a deepening rift between the Executive and Judicial branches. By utilizing Section 122, the President has technically adhered to the letter of the law while defying the spirit of the Court's attempt to rein in executive power. The move forces Congress to take a stand: either vote to extend the tariffs in five months or watch them expire just ahead of the midterm election cycle.
As the dust settles on this historic week, one thing is clear: the trade war is far from over. With the Supreme Court tariff ruling effectively sidestepped for now, the global economy remains tethered to the unpredictable decisions of a White House determined to reshape American trade at any cost.
