Trump Pivots to Section 122 for 10% Global Tariff After SCOTUS Rebuke

The signing of the 10% global tariff marks a critical escalation in the administration's trade policy, but more importantly, it represents a sophisticated legal pivot in response to judicial oversight. By invoking Section 122 of the Trade Act of 1974, the administration is attempting to bypass the limitations set by the Supreme Court's recent 6-3 decision. That ruling specifically targeted the use of the International Emergency Economic Powers Act (IEEPA), which the court found did not grant the executive branch the broad, indefinite authority to levy tariffs without specific Congressional authorization. The shift to Section 122 is a calculated move to maintain the 'America First' trade agenda while operating within a different statutory framework that, while temporary, offers a window of immediate implementation.

For the RegTech and legal compliance sectors, this development introduces a period of intense volatility. Section 122 is designed for balance-of-payments emergencies and allows for a 150-day period of broad tariffs. Crucially, this statute requires the tariffs to be nondiscriminatory. Unlike previous targeted tariffs that could be negotiated or exempted for specific allies or industries, this 10% levy applies globally. This blanket approach simplifies enforcement in some respects but creates a massive compliance burden for global supply chains that must now account for a flat 10% increase on all imported goods almost overnight. Legal departments will need to scrutinize the nondiscriminatory clause, as any attempt by the administration to offer side deals or exemptions could trigger a new wave of litigation based on the very statute they are now utilizing.

“

The signing of the 10% global tariff marks a critical escalation in the administration's trade policy, but more importantly, it represents a sophisticated legal pivot in response to judicial oversight.

The Supreme Court's rebuke of the IEEPA-based tariffs was a significant blow to executive overreach in trade, but the President’s response suggests a strategy where the administration moves from one statute to another to achieve its ends. The adjustment process mentioned by the President indicates that the administration is prepared to test the limits of every available trade law. However, the 150-day sunset provision in Section 122 means that the administration must either secure Congressional approval for an extension or find yet another legal avenue before the five-month window closes. This creates a cliff for importers and logistics providers, who must plan for a high-tariff environment that could either become permanent or vanish by mid-year.

Furthermore, the impact on international relations cannot be overstated. By applying a nondiscriminatory tariff, the U.S. is effectively treating allies and adversaries with the same protectionist brush. This may lead to retaliatory measures from major trading partners, potentially violating existing trade agreements like the WTO or the US-Mexico-Canada Agreement. From a regulatory perspective, companies must prepare for a dual-track challenge: managing the immediate 10% cost increase and preparing for the inevitable retaliatory tariffs from foreign jurisdictions. The speed of implementation—described as 'almost immediately'—leaves little room for the traditional notice-and-comment periods usually associated with major regulatory shifts, placing a premium on real-time trade intelligence and automated compliance systems.