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Within hours of the Supreme Court striking down Trump’s IEEPA tariffs on February 20, 2026, the administration had already chosen its next legal tool. By the following morning, Section 122 of the Trade Act of 1974 was in effect, the rate set at 15 percent, the statutory ceiling. The clock started ticking. It runs out around July 24, 2026.
That’s 150 days. Rebuilding a global tariff regime from scratch requires investigations, reports, and presidential decisions before a single duty can be charged.
The administration didn’t swap one authority for another. It launched a race against a hard statutory deadline.
That deadline forces the government to squeeze months of procedural work into weeks. It must negotiate with Congress while at the same time preparing for litigation. It must also signal to trading partners that the tariff policy is unchanged, even as the legal foundation beneath it is being rebuilt in real time.
Whether that race ends with a smooth transition to Section 232 and Section 301 tariffs, a gap in authority, or a constitutional confrontation over who controls trade policy depends on decisions being made right now. Those decisions are happening as this is written.
For background on the Supreme Court’s ruling itself and the mechanics of the Section 122 pivot, our earlier coverage of what Congress intended when it wrote Section 122 covers the statutory framework in detail. This article focuses on what happens after the clock runs out.
The 15 Percent Rate: What the Revenue Argument Claims
Reports suggest Trump pushed the Section 122 rate from 10 percent to 15 percent within 24 hours of the ruling, using up the full 15 percent cap the law allows. The stated justification was revenue: the new rate, Trump argued on Truth Social, would generate more from imports than the tariffs the Court had struck down.
The Yale Budget Lab estimates that a Section 122 tariff at 10 percent would contribute roughly $30 billion over the full 150-day period; at the 15 percent rate actually implemented, the figure would likely run higher. Annualized, that’s well above $73 billion per year at current import volumes. The prior IEEPA regime, before it was struck down, collected approximately $133 billion in 2025, with CBP data implying $142 billion for the full year.
Treasury Secretary Scott Bessent argued on February 21 that tariff revenue would be “virtually unchanged” for 2026. That holds only if Section 232 and Section 301 tariffs are substantially enhanced before Day 150. That’s a significant “if.”
Basic trade economics adds another complication. Tariff revenue doesn’t keep rising in step with the rate. As rates rise, importers switch to untariffed goods instead. At some point, raising rates further brings in less money because people stop buying the taxed goods. Revenue peaks somewhere before the maximum rate, then falls.
The prior IEEPA regime, with varied rates sometimes well above 15 percent on specific countries and products, may have been closer to a revenue-maximizing setup than a uniform 15 percent global tariff. If the revenue claim proves false, it matters beyond the economics. It weakens the legal reframing the administration is attempting.
It’s a strategic reshaping of what tariffs are. If tariffs are mainly revenue tools (a way to raise government revenue rather than a tool to regulate trade), then the legal challenge to the next authority invoked shifts. Congress has long delegated tariff authority explicitly in statutes like Section 232 and Section 301.
An administration that can say “this tariff generates revenue, which is a legitimate public purpose Congress has authorized” has a stronger argument than one relying on emergency powers with no mention of tariffs in the text. The fact that IEEPA’s text never mentions tariffs is exactly what doomed the prior authority in court.
The risk is that the reframing backfires. Section 232’s statutory trigger is national security, not revenue. If the administration argues both that a tariff is necessary for national security and that its main function is revenue generation, skeptical judges might view those rationales as contradictory.
Authorities Still Available, and the Risks Each Carries
The Supreme Court’s decision in Learning Resources, Inc. V. Trump left three major tariff authorities intact: Section 232 of the Trade Expansion Act of 1962 (national security), Section 301 of the Trade Act of 1974 (unfair foreign trade practices), and Section 338 of the Tariff Act of 1930, an old and rarely discussed law, (discrimination against U.S. Commerce). A fourth option, narrower applications of IEEPA, remains theoretically available but legally precarious.
Chief Justice John Roberts’ majority opinion stressed that tariff authority, described as “a branch of the taxing power,” requires clear congressional authorization. The opinion noted the absence of any mention of tariffs in IEEPA’s text, then pointed to other trade statutes that do contain explicit tariff language.
This suggested Congress knows how to hand off tariff power clearly when it means to. That reasoning creates pressure on the remaining authorities, even though all of them have the explicit tariff language the struck-down statute lacked.
Justice Kavanaugh’s dissent, joined by Justices Thomas and Alito, argued that tariffs are “a traditional and common tool to regulate importation.” He also argued that the major questions doctrine, a legal rule that says courts won’t assume Congress gave the executive branch sweeping new powers unless Congress said so clearly, should not apply to trade authorities. Kavanaugh wrote that the ruling “might not substantially constrain a President’s ability to order tariffs going forward.” Whether that prediction holds depends on whether a future challenge to Section 232 or Section 301 wins over a fifth justice to form a new majority.
The table below summarizes what each remaining authority can and cannot do:
| Authority | Rate Ceiling | Trigger Requirement | Time to Deploy | Legal Durability |
|---|---|---|---|---|
| Section 122 (Trade Act 1974) | 15% | Balance-of-payments deficit or currency depreciation | Immediate; expires Day 150 | Strong; explicit authorization; hard expiration |
| Section 232 (Trade Expansion Act 1962) | No cap | National security threat from imports | Up to 270 days by statute for Commerce investigation, plus 90 days for presidential decision; administration has sought to compress to 180 days | Moderate to strong; courts have upheld it before; at risk if judges think revenue, not security, is the real goal |
| Section 301 (Trade Act 1974) | No cap | Unfair or discriminatory foreign trade practices | Typically 12 to 18 months under statute; expeditable | Moderate to strong; explicit tariff language; repeated court victories |
| Section 338 (Tariff Act 1930) | 50% | Foreign discrimination against U.S. Commerce | Immediate (no investigation required) | Uncertain; never invoked in modern era; no court rulings to guide how judges would rule |
| Narrower IEEPA | Variable | Specific national emergency + importation nexus | Immediate; immediate litigation | Weak; Supreme Court’s categorical reasoning creates doubt |
| Congressional Legislation | Whatever Congress specifies | Whatever Congress specifies | Weeks to months; uncertain passage | strong; but politically uncertain |
Sources: USTR Section 301 tariff actions; Perkins Coie analysis of Learning Resources, Inc. V. Trump; Cato Institute on Section 338 and remaining authorities; 19 U.S.C. Sections 1338, 1862, 2132, 2411.
Section 338 is the least-discussed remaining authority. The statute allows tariffs of up to 50 percent on countries that discriminate against U.S. commerce relative to third countries. It has never been used to impose tariffs in the modern era. There is no case law on it. Treasury Secretary Bessent mentioned the possibility of tariffs “up to 50 percent” under other authorities in late February. Most trade lawyers read that as a reference to Section 338. The statute doesn’t require an investigation or advance notice, which makes it usable right away. But the lack of modern usage means the government hasn’t worked out how it would put the tariffs in place. A president using it would face litigation with almost no binding precedent to guide the outcome.
What Has to Happen Before Day 150
The administration’s public statements frame the 150-day window as a “bridge,” a period to complete investigations that will produce new tariff authority ready to deploy on Day 151. Trump posted on Truth Social that the administration would use the period to “determine and issue the new and legally permissible Tariffs.” U.S. Trade Representative Jamieson Greer indicated that Section 301 investigations into Brazil and China would continue on an accelerated timeframe, with new investigations covering “industrial excess capacity” and other practices. The Trump 2.0 tariff tracker documents the evolving status of these investigations and active tariff actions.
The procedural problem with that plan is straightforward. A typical Section 301 investigation runs 12 to 18 months under statute. The Section 122 window is 150 days. Squeezing that into 150 days creates legal risk. Courts have looked closely at rushed investigations and found them procedurally lacking. A Section 301 tariff imposed on the basis of an inadequate investigation invites the same kind of legal challenge that brought down the prior authority. Not because the law doesn’t allow it, but because the government didn’t follow the required steps.
Section 232 is somewhat more workable. That statute requires the Commerce Department to complete an investigation, issue a report to the president, and give the president 90 days to decide. Some investigations have been completed in under six months. If Commerce initiates investigations immediately and issues preliminary findings before Day 150, the president could announce tariff determinations effective on Day 151. But “could” is doing a lot of work in that sentence. Tight timelines introduce legal risk. The administration would be betting that courts won’t look closely at the adequacy of the investigation. That is not a safe bet.
Congress is the third variable. Section 122 explicitly allows Congress to extend the authority beyond 150 days by legislation. This is the cleanest path legally: no new justification required, no investigation, a vote. But the House voted 219-211 in February 2026 on a resolution disapproving Trump’s tariffs on Canada, with six Republicans crossing over. The Senate has approved similar disapprovals with Republican support. A Section 122 extension cannot be assumed. The administration appears to be treating congressional action as a backup rather than a primary strategy.
The administration’s probable sequencing, based on Bessent’s and Greer’s public statements, looks something like this:
- Days 1 to 30: Initiate Section 301 investigations into multiple countries covering industrial excess capacity, forced labor, and digital services taxes. Initiate Section 232 investigations into additional product categories, particularly semiconductors and advanced materials.
- Days 30 to 90: Commerce and USTR issue preliminary findings. Begin negotiations with trading partners, making clear that tariffs will increase on Day 151 unless bilateral deals are reached. Test congressional appetite for extension or new legislation.
- Days 90 to 145: Issue final determinations on accelerated investigations. Announce tariff rates effective on Day 151, or seek congressional extension if investigations remain incomplete.
- Day 150: Section 122 expires. The administration announces which authority is active as of Day 151.
- Day 151 and beyond: New tariff regime takes effect. Immediate litigation follows.
Every step depends on the previous one completing on time. If Commerce investigations slip by three weeks, the whole timeline collapses. If Congress refuses to extend and investigations aren’t complete, the administration faces a genuine gap in authority.
How the Administration’s Public Messaging Serves Its Legal Strategy
Trump’s criticism of the Supreme Court ruling as “extraordinarily anti-American” is legal and political strategy. The White House Section 122 proclamation reflects this framing, grounding the new tariff in balance-of-payments language while signaling continuity with the prior regime.
The move accomplishes several things at once. It builds a political record. If the administration uses Section 232 or Section 301 after Day 150 and faces litigation, Trump’s public statements establish that the executive branch views the Court’s new rule as illegitimate overreach. That rule limits how much power Congress can quietly hand to the president.
That record may shape how Congress responds. If the Court is seen as blocking legitimate presidential trade authority, Congress may be more willing to pass new tariff authority or formally back the administration’s reading of the laws already on the books.
The combative language also signals to trading partners that the tariff policy will hold regardless of the legal vehicle. If China, the EU, or other partners read the Supreme Court ruling as a relief and begin pulling back their retaliatory preparations, Trump’s tone makes clear that negotiations must continue. The legal mechanism has changed; the intent has not. During the 150-day window, that signal matters enormously. Partners who believe the tariff regime has collapsed have no incentive to negotiate. Partners who believe the administration will re-impose duties on Day 151 keep talking.
Trump’s pointed praise for the three dissenters (Kavanaugh, Thomas, and Alito) and criticism of the six-justice majority — Roberts, Sotomayor, Kagan, Gorsuch, Barrett, and Jackson — acts as public pressure on future litigation. It makes clear that the administration views three justices as already sympathetic and the remaining six as the opposition. That framing makes the remaining justices the swing votes. Whether that kind of public messaging shapes judicial behavior is uncertain.
If Congress, Courts, and Investigations All Fail: The Gap Scenario
What if Congress doesn’t extend Section 122, the Section 232 and Section 301 investigations aren’t complete by Day 150, and courts strike down whatever authority is invoked on Day 151?
The Constitution gives Congress the power to set tariffs. If Congress refuses to delegate and courts enforce that refusal, tariffs lapse. What remains would be the Section 232 and Section 301 duties already in effect on specific products and countries: steel at 50 percent, automobiles at 25 percent, aluminum at rates that vary by origin (25 percent for UK-origin, 200 percent for Russian-origin, among others), and Chinese goods at rates that differ by product and have not been fully verified across the range. That is a significant regime — Ambassador Greer confirmed Section 232 tariffs alone cover roughly 30 percent of U.S. imports as of February 2026, though the combined Section 232 and Section 301 footprint is broader. But it’s far narrower than the global tariffs the prior emergency authority enabled. It would also represent a genuine contraction of executive trade power.
That outcome would be a historic reassertion of congressional power over a policy area it had effectively handed to the executive for decades.
The Court’s ruling in Learning Resources could push executive authority toward alternative statutes. It could also limit that authority in ways that force Congress to make clear choices it has long avoided.
Brian Dodge, President and CEO of the Retail Industry Leaders Association, put the business community’s concern plainly: “Sourcing decisions and shifts to global supply chains require significant preparation and planning, and adjustments cannot be made in an instant.” That’s not a legal argument. It’s a description of how the uncertainty itself creates costs for companies trying to make decisions that take years to carry out. A 150-day window is not enough time to restructure a supply chain. It’s barely enough time to decide whether to try.
The Committee for a Responsible Federal Budget has noted that the IEEPA ruling, if it results in a lasting drop in tariff revenue, could add trillions to the national debt over the long run. That projection assumes Congress doesn’t pass replacement authority. That assumption may be the most important one in the entire debate. If Congress acts, the revenue gap closes. If it doesn’t, the fiscal implications compound.
It forces the administration to make procedural decisions under time pressure that would normally take months. It forces Congress to decide whether to hand over new authority or defend its constitutional right to control trade policy by refusing to do so.
It forces trading partners to decide whether to negotiate or wait out the legal uncertainty. And it forces courts to decide whether the alternative authorities the administration uses after Day 150 meet the standard Learning Resources established.
July 24, 2026 is the date when all of those forced decisions converge. Between now and then, the administration is betting it can squeeze a year’s worth of procedural work into five months. The courts will decide whether that bet pays off.
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