Trump Pivots to 15% Global Tariffs After Supreme Court Rebuffs Trade Powers

The Supreme Court's 6-3 decision on February 20, 2026, represents a pivotal moment for US trade policy and executive authority, effectively resetting the landscape for international commerce. By ruling that the International Emergency Economic Powers Act (IEEPA) cannot be used to levy broad revenue-generating taxes, the court has forced the administration into a tactical retreat—one that was met with immediate escalation. For the venture capital and startup ecosystem, this legal volatility introduces a layer of regime risk that complicates long-term capital expenditure and supply chain planning for hardware and consumer-facing companies.

President Trump's pivot to Section 122 of the Trade Act of 1974 is a calculated move to utilize a rarely used provision designed for balance-of-payment emergencies. While the IEEPA was struck down because it was not intended for revenue generation, Section 122 specifically allows for temporary import surcharges of up to 15% for a period of 150 days. By raising the rate from an initial 10% to the 15% ceiling within 24 hours of the court's ruling, the administration is signaling a maximum pressure campaign, effectively daring Congress to intervene after the five-month window expires in July 2026.

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By raising the rate from an initial 10% to the 15% ceiling within 24 hours of the court's ruling, the administration is signaling a maximum pressure campaign, effectively daring Congress to intervene after the five-month window expires in July 2026.

The immediate concern for startups, particularly those in hardware, consumer electronics, and manufacturing, is the sudden 15% cost increase on all imported components. Unlike the previous IEEPA-based tariffs, which were already being collected and totaled approximately $130 billion, this new levy disrupts existing trade agreements and expectations. Countries like the UK and Australia, which had previously negotiated 10% carve-outs or bilateral deals, now find themselves facing a higher 15% wall. This volatility makes it nearly impossible for growth-stage companies to price products accurately or forecast margins for the 2026 fiscal year, likely leading to a freeze in procurement as firms wait for the dust to settle.

The prospect of $130 billion in refunds for previously paid tariffs under IEEPA creates a massive, albeit slow-moving, liquidity event. While the Supreme Court did not mandate immediate refunds, the ruling opens the floodgates for class-action lawsuits from importers seeking to claw back duties paid over the last year. For VC-backed companies that have seen their burn rates accelerate due to these costs, the potential for a tariff rebate could eventually bolster balance sheets. However, legal experts warn that such clawbacks could take years to navigate through the lower courts, making them a poor substitute for immediate cash flow.

Looking forward, the 150-day countdown starting February 24 sets a hard deadline for a legislative showdown. If Congress does not authorize an extension or a permanent replacement, the 15% tariffs would technically expire, creating a trade cliff. Startups are advised to maintain flexible supply chains and consider diversified sourcing strategies, though the global nature of these new 15% tariffs makes geographic arbitrage significantly more difficult than in previous trade cycles. The next five months will be a period of intense lobbying and legal maneuvering as the administration seeks to codify these temporary measures into permanent trade policy.