On Friday 2/20,
The Supreme Court ruled that Trump’s use of IEEPA to impose tariffs was unlawful because IEEPA does not give a president the power to set tariff levels and that authority belongs to Congress unless Congress otherwise clearly delegates it.
Trump then reacted by imposing a 10% global sweeping tariff rate which was later raised to 15%, using Section 122 of the Trade Act of 1974 and said the Trump administration will be issuing legal and permissible tariffs over the next few months.
So using Section 122 for a 15% Tariff:
– This global tariff can last for 150 days before needing congress approval. (That would be about $153bil tariff revenue for the 150 day period)
– a short window discount code for businesses & consumers to go and buy this weekend before the 15% tariffs kick in on Monday 2/23/26. (February sales/spending boost 🛍️🛒)
– Slightly more demand volume due to effective tariff rate decreasing from 16.9% to a range around 13.5%. (Spending boost 🤏)
⚠️THIS GLOBAL TARIFF CAN BE CHALLENGED WITH LEGAL OR DIPLOMATIC PUSHBACK⚠️:
Congress can pass legislation to override or limit action, Courts can review whether the use of section 122 meets statutory or constitutional standards
This process can take a while… maybe a couple to a few months if really motivated legal or legislative movement.
In addition to Section 122, Trump is also:
- Still using Section 232 of the Trade Expansion Act of 1962 (sectoral tariffs on steel, aluminum, and autos🪨🚘)
- Starting Section 301 of the Trade Act of 1974 🔎 Investigations so that he can make some of the temporary tariffs more permanent if the U.s. Trade Representative (USTR)🕵️ determines engagement of unreasonable or discriminatory trade practices (Intellectual Property Theft, Forced Tech Transfer, or Unfair Barriers that singles out the U.S.) can take 3-6 Months.
Watch: China, Mexico, Canada, EU, Japan, India, Iran, Russia (no one is safe).🙈
What else can he do? Ban, embargo, restrict, block, license, or impose any condition in regard to trade with other countries. He just can’t license a fee. ( Explained at bottom⬇️)
We haven’t heard anything on refunds but a potential refund process could take around 5 years and likely not all of the 130-175bil raised will get paid back, as far as debt, the U.S. Treasury will collect about $5.5 trillion in revenues and will spend about $7.5 trillion this fiscal year. The total size of the Treasury market was a little over $30 trillion as of last month; about $6.5 trillion of the borrowing is in Treasury bills. So the immediate impact from the one-off $160 billion in tariff refunds won’t be large in terms of Treasury borrowing (doesn’t impact borrowing costs tooooo much realistically)
also costs are unlikely to come down either (potential bump up for the margins of U.S. Companies = Good for Stock fundamentals??🤔📈 but markets can look through that)
The past doesn’t repeat itself but it sometimes rhymes… what’s that say about who could be targeted?
So far here’s what the recent tariff policy shown from U.S. imports from 2024 to 2025.
Gained📈 in Taiwan, Vietnam, Switzerland, Thailand, Ireland
Declined📉 in Germany, South Korea, Japan, Canada, and China
What does this mean for current trade deals? EXEMPTIONS From Global tariff For Trade Deals🎯
1. Section 122 allows for exemptions (like certain pharmaceuticals, critical minerals and defense-related products—won’t be subject to the tariff. Products from Canada and Mexico already protected by USMCA)
Each exception must be justified. (Trade deals: like already negotiated favorable terms or key supply chain protected under a treaty EX: Investments into U.S. Companies, Infrastructure, Energy, ETC Goods & Services)
2. Can strain or violate trade agreements under the World Trade Organization (WTO), USMCA, or other bilateral agreements.
One example so far is:
The European Commission said the current situation is not conducive to delivering “fair, balanced, and mutually beneficial” trans-Atlantic trade and investment, as agreed to by both sides and spelled out in the E.U.-U.S. Joint Statement of August 2025.
American and E.U. officials sealed a trade deal last year that imposes a 15% import tax on 70% of European goods exported to the United States. The European Commission handles trade for the 27 E.U. member countries.
What Leverage Exists for Trump Now?
Ban, embargo, restrict, block, license, or impose any condition:
- Restrictions this could be in terms of banning certain sectors or selectively licensing imports OR restrict access to U.S. markets unless we renegotiate terms. Could be like saying no imports o steel or no tech exports, allowing trade only if you get approval, creating barriers such as tariffs or quotas unless the partner renegotiates on terms favorable to the us (section 232 on steel, autos, or tech) (or antidumping laws to justify actions if countries sell something unfairly cheaper in the U.S. than they sell at home, then tariffs kick in to raise the cost (Tariff act of 1930) Investigations handled by commerce department Howard Lutnick and international trade commission. CHINA)
- Broader asset freezes of foreign entities in the us or prohibiting certain investments (under IEEPA the treasury can lock bank acts, property, or investments held in the u.s. or even prevent the U.S. from dealing with certain countries or individuals, Investment Restrictions, Import/ Export bank support, limiting foreign ownership. THROUGH THE BANKING SYSTEM. (IRAN, North Korea, Russia) These are usually paired with sanctions. HIGHLY unlikely to be used on allies. Watch CRYPTO ✅ in this scenario
- Leverage supply chains by disrupting access to critical goods like tech or resources. Using control as bargaining power (semiconductors, rare earth elements) to limit or cut off exports to certain countries. Greenland. China. Can backfire.
- Sanctions (individuals or companies) making it harder for them to do business globally. Targeted financial penalties that can prevent foreign banks from processing dollar transactions, which are critical for global trade. They might block access to U.S. Markets, prohibit transactions with U.s. companies, or freeze assets held abroad. He can also use secondary sanctions or punitive tariffs. (IRAN, North Korea, Russia) THROUGH THE BANKING SYSTEM. Watch CRYPTO✅ in this scenario
What about the fed? Right now MARKETS see June is about 50/50 on a cut & for the full year see 1 twenty five basis point cut (.25%)
I don’t think we’ll see a cut… maybe not at all this year. 😳❌✂️
- A 13.5% ranged effective tariff rate lowers inflation pressures, very slight cooling of inflation expectations for core goods. Lowers odds of the Hawkish added language around raising rates if inflation stays sticky. Lowers one time price increase expectations (still a one off price increase).
- Companies have a little bit more margin since costs are raised… contributes to potential business investment like goods and services. Watch payrolls and wages.
- I think that this means we’ll hear more ✅ Support for from the fed to continue waiting. Data dependent. Both risks slightly diminished. Within Neutral Rate range. ✅
What I do think changes is the “FUD” index. More Fear. More Uncertainty. More Doubt. So watch for increased levels of volatility in 2026.