IEEPA Tariffs Are Gone. Here’s Which Presidential Trade Powers Survived the Supreme Court Ruling.

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The Supreme Court’s February 20, 2026 ruling in Learning Resources, Inc. V. Trump didn’t end tariffs. It ended one particular legal basis for imposing them, and the administration had already shifted to a different statute within hours.

If you expected the ruling to produce a post-tariff world, the actual result is more complicated and, depending on your perspective, more frustrating. Our earlier analysis of which tariff authorities survived the ruling covers the legal mechanics in detail. This piece focuses on what the post-ruling trade architecture looks like in practice and how the administration has reorganized tariff enforcement across multiple overlapping legal authorities.

The Ruling: What Fell and What Survived

Chief Justice John Roberts, writing for a 6-to-3 majority, ruled that the International Emergency Economic Powers Act does not authorize tariffs. “The imposition of tariffs is a revenue-raising measure,” the opinion stated. “Both the Framers and the early Congress understood the power to tax as one of the federal government’s most important powers, not to be lightly delegated.” This was a firm constitutional line, not a narrow statutory reading. If Congress wanted to give presidents tariff authority, it had to say so clearly. IEEPA didn’t.

What disappeared immediately: roughly $175 billion in duties collected under IEEPA since April 2025, covering reciprocal tariffs on major trading partners and drug-trafficking-related duties on specific countries. U.S. Customs and Border Protection issued guidance that IEEPA duties would stop being collected for goods entering the United States starting February 24, 2026. (The refund question covers an enormous volume of customs entries. It is its own separate nightmare; we’ve covered that separately.)

What survived: Section 232 of the Trade Expansion Act of 1962, which lets the president impose tariffs on imports that “threaten to impair national security.” Section 301 of the Trade Act of 1974, which covers unfair foreign trade practices. Section 122 of the same act, which allows temporary tariffs for emergencies where the U.S. Is importing far more than it exports, creating a serious economic imbalance.

Steel and aluminum tariffs under Section 232, at 50 percent, untouched. China tariffs under Section 301, untouched. The Court explicitly held back judgment on whether those other authorities might face similar constitutional scrutiny someday. That day has not arrived.

Before the ruling, passenger vehicles faced a 2.5 percent baseline — the standard Most Favored Nation rate unchanged since 1994 — plus a 25 percent Section 232 tariff imposed in 2025. Some of that 25 percent had been based on IEEPA, some on Section 232. After the ruling, only the Section 232 component remained legally valid.

For most countries, that meant their effective auto tariff dropped but didn’t disappear. For South Korea, Japan, and the EU, which had negotiated their rates down to 15 percent in late 2025, the question became more complicated. Specifically: were those 15 percent deals still valid when the legal foundation had shifted?

South Korea’s Auto Deal: How Rate Parity Gets Locked In

South Korea moved fast. In the weeks following the ruling, Seoul held intense negotiations with the U.S. Trade Representative and the Commerce Department. The 15 percent rate had been confirmed by Commerce Secretary Lutnick in July 2025, and in the weeks after the ruling Seoul moved quickly to lock it in under Section 232 rather than the mixed legal basis that had justified it before.

Under the old structure, Korea’s 15 percent rate was a negotiated cut from a higher IEEPA baseline. Under the new structure, 15 percent is the actual Section 232 rate for Korean vehicles. It’s the floor, not a carve-out from something higher. The same 15 percent rate as Japan and the EU, which had also secured those rates, was kept in place.

To understand why Korea fought for this, consider what was at stake. Hyundai Motor Group reported that U.S. Tariffs cost the company 828 billion won (roughly $606 million) in the second quarter of 2025 alone, and warned that Q3 losses would be significantly larger. Korean automakers, Hyundai, Kia, and Genesis, have built their U.S. position on product quality and strong SUV and hybrid demand, limiting price increases rather than undercutting rivals.

A 15 percent tariff is painful but manageable. A 25 percent tariff is what Korea would have faced if it had been forced to fall back to the Section 232 baseline without a special deal. That would have forced them to either accept sharply squeezed margins or raise prices in ways that hurt their entire competitive position.

The math is not abstract. On a vehicle that costs around $36,500 once it arrives at a U.S. Port, a 10-percentage-point tariff differential translates into roughly $3,650 in additional duty costs per vehicle. South Korea exports approximately 1 million vehicles annually to the United States. A 10-point differential, sustained across that volume, represents somewhere in the neighborhood of $3.65 billion in additional tariff costs they’d face annually. That’s not a rounding error.

Victor Cha, Korea Chair at the Center for Strategic and International Studies and a former U.S. Diplomat, offered this characterization of the stakes: “The Supreme Court ruling struck down the IEEPA tariffs, but not the Section 232 tariffs on automobiles, semiconductors, and pharmaceuticals. Japan valued these the most and negotiated them down to 15%. Korea would be under threat if it attempted to renegotiate.” The quote’s credit of the 15 percent rate to Japan alone is not right — South Korea and the EU secured the same 15 percent rate through equivalent negotiations.

But the basic point about asymmetry holds. A mid-sized trading partner without the EU’s market weight or Japan’s geopolitical weight or influence couldn’t take its 15 percent rate for granted. It had to actively defend it.

Korea’s leverage came from two places. First, the investment commitments it had already made. The November 2025 framework agreement with Washington included $200 billion in additional Korean investment through a non-binding Memorandum of Understanding covering a broad range of strategic sectors, with the official characterization of the MOU’s scope being broader than any specific sectoral framing.

It also included $150 billion in approved shipbuilding investments — part of a broader commitment that combined with the $200 billion MOU for a total of $350 billion. That’s a lot of American jobs to put at risk by hitting Korea on auto tariffs.

Second, competitive dynamics: if Japan and the EU kept 15 percent rates while Korea fell back to 25 percent, Korean automakers would lose pricing power in their most important export market. The administration had its own reasons to avoid that outcome.

“We will carefully analyze the U.S. Administration’s follow-up measures and responses from other countries, communicate closely with the U.S. And respond in ways that protect national interests,” a South Korean Ministry of Trade, Industry and Energy source stated in the immediate aftermath of the ruling. That language, “careful analysis” and “protecting national interests” rather than alarm, shows that Seoul understood it had something to work with.

The following table shows where the major auto-exporting countries stood before and after the ruling, and what authority now underlies each rate.

Sources: S&P Global automotive analysis; reporting on the South Korea rate confirmation. Note: “Most other countries” reflects the Section 232 baseline; individual country rates vary based on bilateral negotiations and how customs categorizes specific vehicle types.

The 150-Day Bridge: How Section 122 Buys Time

On the same day the Supreme Court issued its ruling, the administration invoked Section 122 of the Trade Act of 1974 to impose a 10 percent global tariff surcharge. It then raised that surcharge to 15 percent on February 21. Those Section 122 tariffs took effect at 12:01 a.m. On February 24, 2026.

Section 122 has a legal time limit: 150 days, expiring on July 24, 2026. Congress can vote to extend them, but in an election year with the House already having passed a disapproval resolution (219-211 on February 11, 2026), while the Senate had not passed comparable legislation, that seems unlikely. So why impose tariffs you know will expire?

Because Section 122 is a bridge, not a final stop. The 150 days are being used to start and speed up investigations under Section 301 and Section 232, the two authorities that don’t carry a time limit. Section 232 investigations, conducted by the Department of Commerce, can take months or years to complete. Section 301 investigations have their own procedural requirements.

Neither can be created overnight. Start them now, during the 150-day window, and findings and recommendations could be ready to support new tariffs under those authorities before Section 122 expires.

U.S. Trade Representative Jamieson Greer laid this out explicitly in a statement released on February 20, 2026: “Initiate several investigations under Section 301 of the Trade Act of 1974 to deal with unjustifiable, unreasonable, discriminatory, and burdensome acts, policies, and practices by many trading partners. We expect these investigations to cover most major trading partners and to address areas of concern such as industrial excess capacity, forced labor, pharmaceutical pricing practices, discrimination against U.S. Technology companies and digital goods and services, digital services taxes, ocean pollution, and practices related to the trade in seafood, rice, and other products.”

Ocean pollution. Seafood. Digital services taxes. Forced labor. The wide scope of that agenda is not accidental. The administration is starting investigations into nearly every trade friction point it can find, across virtually every major trading partner. The goal is to produce findings that will support new tariffs after Section 122 expires. Chad Bown, a senior fellow at the Peterson Institute for International Economics, characterized this as a strategy of “laying the required legal steps” during the Section 122 period to justify sustained tariffs afterward. The 150-day window is not the tariff regime. It’s the chance to finish investigations that will support tariffs that last much longer.

The bilateral deals fit into this system too. By locking in specific rates for specific countries through negotiation, the administration can claim it has settled trade disputes without waiting for a full Section 301 investigation. South Korea gets its 15 percent auto rate. The administration gets a country with “resolved” status it can point to as evidence that cooperation beats confrontation. Countries that don’t negotiate face the risk of Section 301 or Section 232 investigations ending against them, potentially resulting in higher tariffs imposed on their own.

Digital Services: The New Pressure Point

This covers investigations into whether other countries’ domestic regulations count as “unfair trade practices” under Section 301.

The legal vehicle is Section 301 of the Trade Act of 1974, which requires evidence of “acts, policies, or practices of a foreign country” that are “unjustified, unreasonable, or discriminatory and burden or restrict United States commerce,” or that violate an international trade agreement.

The administration’s argument is that digital regulations in countries like South Korea, Brazil, and the EU protect large domestic digital platforms from U.S. Competition. They do this by imposing rules that are easier for established local companies to follow than for U.S. Firms trying to enter those markets.

South Korea’s market is dominated by Naver (search and portal), Kakao (messaging and payments), and Coupang (e-commerce). South Korea’s proposed Online Platform Fairness Bill has been the subject of intense lobbying by U.S. tech companies and the U.S. government, with domestic platform companies’ influence in that process described as limited.

The EU’s Digital Markets Act and Digital Services Act were developed partly in response to concerns about U.S. Tech giants’ market dominance. That means the EU views them as legitimate regulatory responses, not trade barriers. The U.S. Views them as discrimination against American companies.

The legal precedent for Section 301 digital services investigations exists but is narrow. Between 2019 and 2021, the USTR investigated digital services taxes imposed by France, Austria, Italy, Spain, the UK, India, and Turkey, concluding they discriminated against U.S. Tech companies. But a tax that clearly targets digital services is much easier to label as discriminatory than a data privacy law that applies equally to all companies. Broader digital regulations are harder to fit into Section 301’s standard definition of “unfair trade practices.”

For South Korea, this creates a real dilemma. More open digital regulation might satisfy Washington and avoid tariffs, but it could put Korean companies at a disadvantage at home. Stricter regulation keeps Korean companies competitive but risks U.S. Tariff retaliation. The Stimson Center’s analysis of the post-ruling situation for South Korea notes that the administration is reviewing a return to 25 percent auto tariffs — a separate concern from the digital services investigations, which Politico reports carry their own tariff threat. Both pressures land harder when you’ve spent months locking in a 15 percent rate.

The EU faces the same dynamic at larger scale. Brussels is committed to its Digital Markets Act and Digital Services Act as core elements of its regulatory philosophy. Accepting U.S. Demands to weaken those regulations would mean giving in on a core policy question. But the alternative is ongoing tariff pressure from a country that has already shown a willingness to impose tariffs first and negotiate second.

What makes digital services investigations particularly powerful as a pressure tool: they’re fast to start, they target policy choices rather than goods, and they give Washington use over countries’ domestic regulatory decisions in ways that traditional tariffs on physical products don’t. If the administration successfully creates tariffs based on countries’ digital regulations, it will have opened a new path for U.S. Trade pressure. That pressure could then be used against virtually any domestic policy choice that affects American tech companies’ market access.

The Investment Commitment Problem Getting Too Little Attention

What happens to the hundreds of billions of dollars in investment commitments that trading partners made under IEEPA tariff pressure has gotten far less attention than it deserves since the ruling.

South Korea committed to $200 billion in strategic investment through a Memorandum of Understanding, plus $150 billion in approved shipbuilding investments. Japan committed $550 billion in investments selected by the U.S. Government to be deployed across the American economy. The EU made comparable pledges. These commitments were the coin of negotiation in 2025. They were what countries “bought” with tariff concessions. When the tariff authority was struck down, the legal foundation supporting those commitments became shaky.

Memoranda of Understanding (MOUs) are generally not binding in contract law; they’re statements of intent. The enforceability of an MOU depends heavily on the specificity of its terms and the intent of the parties. Government-to-government MOUs exist in a different legal category than private contracts, but they’re still not the same as binding treaty obligations.

If a country decides to delay its investment commitments because the tariff threat that drove them has been removed, the administration’s options for enforcement are limited. It can’t impose tariffs to punish non-compliance if the Supreme Court has ruled those tariffs unconstitutional. It can apply diplomatic pressure or start new Section 301 investigations. Each of those paths is slower and less direct than the original threat.

Trade lawyers examining the post-ruling field have begun pressing on exactly this point. The commitments were political pledges more than binding legal obligations, and if the circumstances that drove them change sharply, countries may feel less obligated to follow through.

The UAW has been making a related but distinct point for months. Investment announcements are not the same as union-wage jobs. UAW President Shawn Fain has noted that “only GM has stepped up with serious reshoring efforts” despite the tariff regime being in place.

The union has listed specific plants with unused capacity: Warren Truck Assembly (over 1,000 autoworkers laid off while trucks are built in Mexico, though the specific wage figure for Mexican workers is unverified), Lordstown Assembly (employed nearly 10,000 when NAFTA passed, now operated by Foxconn which manufactures the Monarch MK-V electric tractor there), Belvidere Assembly (slated for roughly 1,500 union-represented jobs, with Stellantis projecting around 3,300 total new positions).

The UAW’s position is that tariffs create the chance for reshoring, not the obligation. Fain’s full statement called on automakers “from the Big Three to Volkswagen and beyond” to bring back good union jobs to the U.S. That obligation holds regardless of which statute the tariff authority rests on, and it’s a gap that no legal ruling resolves.

Hyundai Motor Group announced 125.2 trillion won (approximately $86.47 billion) in investments within South Korea through 2030, with explicit framing around supporting the U.S. Trade agreement. Whether that framing survives the ruling’s legal disruption will be a real test of how lasting these commitments are. So will whether the U.S. Investments that were part of the bilateral deal proceed on schedule.

What Comes Next: The August Deadline and the Constitutional Frontier

The Section 122 tariffs expire on July 24, 2026, when the 150-day statutory limit from the February 24, 2026 effective date runs out. If Section 301 and Section 232 investigations finish before then, with findings that support new tariffs, the administration can impose those tariffs and keep coverage without relying on the expiring Section 122 authority. If the investigations take too long, or if their findings are challenged in court, there will be a gap.

Congress remains the ultimate variable. The House passed a disapproval resolution on February 11, 2026, by a 219–211 vote and sent it to the Senate, which had not acted on comparable legislation. A future Congress opposed to tariffs could change Section 301 or Section 232 authorities, add procedural limits, or simply refuse to extend Section 122. A future administration with different trade priorities could redirect investigations or let them end without tariff action. The constitutional limit on presidential tariff authority has been reaffirmed, but it hasn’t been tested against the full set of tools now available to the executive.

That test will come in the courts. The Section 301 investigations the administration is now initiating will eventually produce tariff recommendations. Those tariffs will be challenged. Courts will have to decide whether the same constitutional reasoning that struck down IEEPA tariffs applies to Section 301 tariffs imposed on the basis of digital services regulations.

They will also have to decide whether the specific statutory procedures and findings requirements of Section 301 provide enough congressional authorization to survive scrutiny. As our coverage of the ruling’s broader implications for executive power explains, the Court’s reasoning in Learning Resources left serious questions about where the constitutional line falls for other tariff authorities.

The administration is betting that Section 301 and Section 232, with their procedural requirements and specific statutory findings, are constitutionally different from IEEPA. That bet may be right. The Court’s majority opinion focused heavily on IEEPA’s lack of clear tariff authorization and the wide scope of the emergency power it claimed. Section 301 and Section 232 have more specific statutory frameworks, longer histories of use, and more established court precedent supporting them.

But “more defensible than IEEPA” is not the same as “constitutionally bulletproof.” The same legal strategy, or the same coalition of challengers, that produced the Learning Resources ruling has shown a willingness to overturn long-accepted limits on presidential power.

For South Korea, Japan, the EU, and every other trading partner watching this play out: the 15 percent auto rate is locked for now. The investment commitments are still officially in place, at least on paper. The next pressure point is digital services. The question is whether the administration can finish enough Section 301 investigations before August to maintain tariff coverage. A second question is whether those investigations survive the inevitable legal challenges.

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