What’s Next After U.S. Supreme Court Strikes Down the Trump Administration’s Use of IEEPA Tariffs

The Supreme Court’s decision to strike down President Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs is an important victory for brands, retailers, and the rule of law.

For the past year, many import-dependent businesses were caught in a cycle of rapid tariff escalation and reversals. Rates changed frequently, sometimes with little warning, making forecasting, sourcing decisions, pricing strategy, and inventory planning extraordinarily difficult. According to the Tax Foundation, the IEEPA tariffs increased taxes on American households by roughly $1,000 in 2025, with another $1,300 projected in 2026. That cost pressure inevitably flowed through supply chains, impacting brands, retailers, and consumers alike.

The Court correctly recognized that IEEPA, a 1977 sanctions law designed to freeze assets and restrict financial transactions during genuine national emergencies, was never intended to function as a mechanism for rewriting the tariff code. By drawing that constitutional boundary, the Court provided practical relief to businesses that had been whipsawed by volatility as much as by the tariff rates themselves.

For retailers and brands that rely on global sourcing, the ruling restores a measure of predictability and reinforces that sweeping trade changes require clearer statutory grounding.

However, Other Tariff Authorities Remain

While this decision removes one tool, it does not eliminate the administration’s ability to impose tariffs. Several other statutory avenues remain available:

Section 122 of the Trade Act of 1974.

Section 122 allows the president to impose temporary import surcharges of up to 15% (or quotas) to address “large and serious” balance-of-payments deficits. Key considerations:

• It allows relatively fast action.
• It does not require the lengthy investigations associated with other trade statutes.
• However, tariffs under Section 122 automatically expire after 150 days unless Congress votes to extend them.

That expiration requirement functions as an important guardrail. While an administration could attempt to re-trigger the authority, doing so would raise serious separation-of-powers concerns and would almost certainly face scrutiny. For retailers, this means any tariffs imposed under Section 122 would:

• Likely be capped at 15%, lower than some IEEPA rates.
• Be time-limited, reducing the risk of indefinite uncertainty.
• Be subject to at least some congressional oversight.

In short: still impactful, but structurally more constrained and less volatile than IEEPA.

Section 338 of the Tariff Act of 1930.

Section 338 allows the president to impose tariffs of up to 50% on countries deemed to “discriminate” against U.S. commerce. However, this authority is:

• Legally vague
• Never meaningfully tested in modern courts
• Tied, at least textually, to involvement by the U.S. International Trade Commission (USITC)

The ambiguity cuts both ways. While it could invite aggressive interpretation, it would also likely trigger significant legal challenges. Courts may demand clearer findings, particularly around what constitutes “discrimination”, especially when dealing with WTO member countries bound by most-favored-nation rules. In practice, this means Section 338 is unlikely to produce the same rapid, across-the-board tariff shock that IEEPA enabled without facing prolonged litigation and judicial scrutiny.

Sections 301 and 232.

The administration could also rely on:

• Section 301 (Trade Act of 1974) was used previously against China
• Section 232 (Trade Expansion Act of 1962) was used for steel and aluminum tariffs

Both authorities require structured processes and investigations before tariffs are imposed. While still consequential, they involve:

• Formal agency findings
• Public procedures
• Defined statutory criteria

This procedural framework inherently reduces volatility compared to emergency-based actions.

What This Means for Brands and Retailers

For brands and retailers, many of whom operate complex, multi-country sourcing networks, the Supreme Court ruling represents:

• A reduction in sudden tariff whiplash
• Lower probability of extreme across-the-board surcharges
• Greater likelihood of procedural guardrails and review

That does not mean tariff risk disappears. It means future tariffs are more likely to be:

• Capped or targeted
• Procedurally structured
• Time-bound or subject to review
• More legally contestable

The key distinction is volatility. The IEEPA tariffs created near-hourly unpredictability, which disrupted sourcing decisions, compliance planning, and cost modeling. Alternative statutory paths, while still impactful, carry clearer constraints…including expiration timelines, agency involvement, or investigative requirements.

The Broader Structural Issue

The Court’s decision addressed misuse of IEEPA, but it also highlighted a deeper issue: Congress has delegated significant trade authority to the executive branch over decades. Unless Congress revisits and tightens those delegations, presidents of either party will retain considerable latitude to reshape trade policy. For now, however, the immediate environment for import-reliant retailers is more stable than it was under the IEEPA regime.

Bottom Line

This ruling is a meaningful win for brands and retailers that depend on global supply chains. It curbs the most volatile tariff mechanism and restores important constitutional guardrails. Trade policy risk remains, but the pathways that remain available are generally:

• More constrained
• More procedurally structured
• Less prone to abrupt swings

For businesses navigating compliance, sourcing, and cost management, that relative predictability matters.