Executive Summary
The Supreme Court’s landmark decision on February 20, 2026, in Learning Resources, Inc. v. Trump, fundamentally altered the executive branch’s trade policy architecture. By ruling that the International Emergency Economic Powers Act (IEEPA) does not grant the President “blank check” authority to impose broad-based tariffs without explicit congressional authorization, the Court effectively dismantled the “Liberation Day” tariff regime that characterized 2025.
With the rejection of IEEPA as a primary tariff instrument, the Administration has been forced to pivot to “Plan B”: a constellation of older, more procedural statutes. The President’s immediate response—a temporary 15% global surcharge—relies on Section 122 of the Trade Act of 1974. However, this authority is time-limited. Consequently, the Executive Branch is now shifting toward targeted, statute-specific actions using Section 232 (national security), Section 301 (unfair trade practices), and Section 201 (safeguards). Furthermore, the Administration is increasingly utilizing customs enforcement mechanisms, specifically regarding “de minimis” thresholds and territorial jurisdiction, to impose trade friction in lieu of direct duty hikes. This report outlines the specific statutory levers now available, their procedural constraints, and the strategic implications of this forced transition from emergency decree to administrative process.
The Post-IEEPA Legal Landscape
The legal environment for executive trade action has constricted significantly following the consolidation and ruling of Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc. The Supreme Court invoked the “Major Questions Doctrine,” asserting that a policy of such “vast economic and political significance” as a global tariff regime requires clear congressional authorization, which IEEPA’s text regarding the regulation of importation does not explicitly provide (Washington International Trade Association, Court of International Trade’s Flawed Ruling in Striking Down Trump’s Tariffs – WITA — July 14, 2025).
The ruling creates two immediate constraints for the President:
Non-Delegation and Specificity: The Court affirmed that Congress cannot delegate its taxing power (Article I) to the Executive without an “intelligible principle.” This effectively precludes future broad-based tariffs justified solely by declared national emergencies under the National Emergencies Act (Washington International Trade Association, Trump’s Use of Emergency Powers to Impose Tariffs Is an Abuse of Power – WITA — March 24, 2025).
The Section 122 Stopgap: In the immediate aftermath of the ruling, the Administration invoked Section 122 of the Trade Act of 1974 (Balance of Payments Authority). This statute authorizes the President to impose a temporary import surcharge (up to 15%) to address large and serious balance-of-payments deficits. However, this authority is strictly limited to 150 days unless extended by Congress (MarketMinute, Supreme Court Strikes Down IEEPA Tariffs, Mandating Billions in Immediate Rebates – The Chronicle-Journal — February 24, 2026).
Consequently, the Administration must now operate within the narrower, distinct procedural lanes of specific trade statutes, moving from a strategy of universal application to one of targeted enforcement.
Targeted Authority: National Security and Unfair Trade Remedies
With broad emergency powers curtailed, the Executive Branch retains two powerful but procedurally burdened tools: Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974.
Section 232: National Security Adjustments
Section 232 allows the President to restrict imports if the Secretary of Commerce determines that such imports “threaten to impair the national security.” Unlike IEEPA, this authority survived the recent judicial review because it contains a specific congressional delegation regarding security.
Conditions and Procedure: The process requires a Department of Commerce investigation, which must be completed within 270 days. The President then has 90 days to concur and determine the nature of the remedy. The statute requires an assessment of domestic production needed for national defense and the impact of foreign competition on the economic welfare of essential domestic industries.
Current Application: The Administration has actively deployed this tool, evidenced by Executive Order 14220, Addressing the Threat to National Security From Imports of Copper. This order initiated an investigation into copper imports, citing vulnerabilities in smelting capacity and reliance on foreign adversaries (Presidential Document — Addressing the Threat to National Security From Imports of Copper). This signals a strategy of piecemeal protectionism for critical mineral and industrial supply chains.
Section 301: Unfair Trade Practices
Section 301 grants the President authority to take all appropriate action, including retaliation, to obtain the removal of any act, policy, or practice of a foreign government that violates an international trade agreement or is “unjustifiable, unreasonable, or discriminatory.”
Conditions and Procedure: Action under Section 301 generally follows an investigation by the United States Trade Representative (USTR). It allows for the imposition of duties on goods from specific countries found to be burdening U.S. commerce.
Current Application: This remains the primary vehicle for addressing trade with China. Executive Order 14257 and subsequent modifications (EO 14298) utilized this authority to address persistent trade deficits and lack of reciprocity. The Administration argues that “reciprocal tariffs” are necessary to counter non-market practices (Presidential Document — Regulating Imports With a Reciprocal Tariff To Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits). Unlike Section 232, Section 301 focuses on the behavior of the trading partner rather than the security impact of the product.
Economic Safeguards: Import Surges and Balance of Payments
Beyond retaliation and security, the President retains authorities designed to stabilize the domestic economy against market shocks.
Section 201: Global Safeguards
Section 201 of the Trade Act of 1974 allows the President to grant temporary import relief (tariffs or quotas) if increased imports are a “substantial cause of serious injury” to a domestic industry.
Procedural Constraints: This is the most procedurally rigorous authority. It requires a petition to the International Trade Commission (ITC), an independent bipartisan body. The ITC must make an affirmative finding of injury before the President can act. Furthermore, remedies must be nondiscriminatory (applied globally) and temporary (typically four years, extendable to eight), with a requirement that the domestic industry implement a plan to adjust to competition.
Strategic Utility: While less flexible than 232 or 301, Section 201 is insulated from the “Major Questions” challenge because it involves a specific quasi-judicial process delegated by Congress.
Section 122: Balance of Payments Authority
As noted, this is the current “Plan B” active authority. Section 122 allows the President to deal with “large and serious United States balance-of-payments deficits” by imposing a temporary import surcharge not to exceed 15% ad valorem.
Conditions and Constraints: The critical constraint is the timeline. The surcharge applies for only 150 days. Extending it requires new congressional legislation. This puts the President on a collision course with Congress, as the current 15% global surcharge will expire in mid-2026 without legislative intervention (MarketMinute, Constitutional Cliffhanger: Supreme Court Set to Rule on Executive Tariff Power as Market Braces for Margin Volatility – The Chronicle-Journal — January 28, 2026).
Customs Jurisdiction and Enforcement Authorities
Recognizing the limits of tariff rates, the Administration is increasingly utilizing non-rate trade restrictions through customs authorities. These levers increase the cost of imports through compliance friction and the removal of administrative exemptions.
Section 321: De Minimis Exemptions
Section 321 of the Tariff Act of 1930 allows for the duty-free entry of shipments valued under $800. This has been a major loophole for e-commerce, particularly from China.
Executive and Legislative Action: The Administration and Congress are moving to close this loophole. Executive Orders (e.g., EO 14231) have explicitly denied de minimis treatment for certain goods, such as those related to illicit supply chains or specific countries (The White House, Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border — February 2, 2025).
Proposed Legislation: The “End China’s De Minimis Abuse Act” (H.R. 805) seeks to statutory prohibit the use of the $800 exemption for goods from high-tariff countries or those subject to Section 301/232 actions, effectively acting as a tariff increase on direct-to-consumer goods (H. R. 805).
Customs Waters Expansion
Enforcement jurisdiction is also expanding. The “Extending Limits of U.S. Customs Waters Act” (S. 221 / H.R. 1268) proposes extending U.S. customs waters from 12 to 24 nautical miles.
Strategic Impact: While not a tariff, this expansion allows U.S. Customs and Border Protection (CBP) to interdict, board, and inspect vessels further from the coast. This enhances the enforcement of existing trade laws, including those against transshipment and labor violations, thereby acting as a non-tariff trade barrier by increasing risk and logistical costs for importers (S. 221).
Conclusion: The Return of Procedural Constraints
The Supreme Court’s decision in Learning Resources, Inc. v. Trump marks the end of the “emergency decree” era of trade policy. While the President retains substantial power to restrict trade, the methodology must shift from unilateral IEEPA declarations to the specific, procedurally burdened authorities of Sections 232, 301, and 201.
The immediate future will be defined by the countdown on the 150-day Section 122 surcharge. As that clock expires, the Administration will likely accelerate Section 232 investigations (like that on copper) and Section 301 actions to maintain protectionist pressure. Simultaneously, Congress is reasserting its Article I authority through bills like the No Taxation Without Representation Act of 2024 (S. 5066) and the Prevent Tariff Abuse Act (H.R. 407), signaling a sustained institutional conflict over the final say on U.S. trade barriers (H. R. 407; S. 5066).