HIC Clear Signals Briefs
week of February 24, 2026
February 24, 2026
Supreme Court Invalidates IEEPA Tariffs Administration Shifts to 15% Global Tariff Under Section 122
What Happened
On Friday, February 20th, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs.
The Court held that while IEEPA permits regulation of imports during national emergencies, it does not authorize the imposition of duties. When Congress delegates tariff authority, it does so explicitly through trade statutes such as Section 232 or Section 301.
As a result, the statutory basis for the recent IEEPA-based tariffs has been invalidated.
What the Decision Does Not Do
The ruling:
- Does not eliminate tariffs generally.
- Does not invalidate Section 232 (national security tariffs).
- Does not invalidate Section 301 (unfair trade practice tariffs).
- Does not establish a refund mechanism.
The decision addresses only the use of IEEPA as tariff authority.
Administration Response: Section 122 Global Tariff
In response, the President announced and signed an executive order imposing a global tariff under Section 122 of the Trade Act of 1974. While initially announced at 10%, the Administration has since indicated the rate will be 15%, the statutory maximum permitted under that authority.
Section 122:
- Is a statutory tariff authority (unlike IEEPA)
- Is limited in duration (up to 150 days)
- Requires certain economic findings and procedural steps
Tariff authority has therefore shifted — not disappeared.
Effective Rate for Hobby Products
Based on recent CBP entry review, many hobby products (HTS 9503) had been subject solely to a 20% IEEPA-based surcharge, with no Section 301 layering.
With IEEPA tariffs invalidated and Section 122 now announced at 15%, the effective rate for similar hobby imports would shift from:
20% (IEEPA) → 15% (Section 122)
Members should confirm currently applied Chapter 99 codes and rates with their customs brokers pending formal CBP implementation guidance.
What Happens to Previously Paid IEEPA Tariffs?
The Supreme Court did not create a refund process.
Refund outcomes will likely depend on:
- Liquidation status of entries
- Whether protests were filed
- CBP administrative guidance
- Potential further litigation
The decision does not limit relief only to existing litigants. However, refund timing and mechanics remain uncertain.
Members are encouraged to:
- Review liquidation status of prior entries
- Confirm protest deadlines
- Monitor CBP guidance
What This Means for the Hobby Industry
- IEEPA tariffs have been invalidated.
- A 15% global tariff under Section 122 has been announced.
- Refund mechanics for prior IEEPA payments remain unresolved.
- Trade policy volatility continues.
This development represents a shift in statutory authority — not the end of tariff exposure.
HIC Position
HIC continues to advocate for:
- Predictable trade policy
- Clear statutory authority
- Practical relief for small and mid-sized hobby businesses
We will provide further updates as CBP issues operational guidance and as refund procedures become clearer.
Legal Notice