What happened
On 20 Feb 2026 the Supreme Court (6–3) held that IEEPA does not authorize the President to impose tariffs, invalidating both the Canada/Mexico/China 'trafficking' tariffs and the worldwide reciprocal tariffs. The same day the administration pivoted to Section 122 surcharges (capped at 15% for up to 150 days) — an authority the Court of International Trade rejected on 7 May (stayed pending appeal).
Why it matters
Removing the IEEPA tariff wall is a duty-relief tailwind for import-dependent retailers and a lift for trade-exposed currencies, but the Section 122 workaround leaves trade policy legally unsettled.
Exposed assets
| Ticker | Direction | Rationale |
|---|---|---|
| WMT | ▲ | import-dependent retailers gain on duty relief |
| TGT | ▲ | lower input costs as tariffs are removed |
| CAD | ▲ | trafficking tariffs on Canada lifted |
| MXN | ▲ | Mexico tariff relief |
| DXY | ▼ | modest dollar softening on tariff removal / uncertainty |
What to watch
- •The Section 122 appeal and the 150-day expiry clock
- •Any congressional tariff legislation
- •Sector-specific (Section 232/301) tariff substitution
Sources
- 1.US Congressional Research Service LSB11398
- 2.SCOTUS docket 24-1287