The IEEPA Era Is Over

Three weeks ago, the US tariff landscape changed more dramatically than at any point in the past year. If you move goods across the US–Canada border and haven’t had time to work through the implications, this issue is for you.

Here’s what happened, what it means, and what’s coming next.

What Happened

On February 20, 2026, the US Supreme Court ruled 6–3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. Within hours, President Trump signed an executive order terminating all IEEPA-based tariffs, effective February 24 at 12:00am ET.

This ended the tariff regime that had been in place since March 2025 — including the 25% tariffs on Canadian goods and the so-called “Liberation Day” reciprocal tariffs on most other countries.

What Replaced It (Immediately)

One minute after IEEPA tariffs terminated, a new 10% global import surcharge took effect under Section 122 of the Trade Act of 1974. Key facts about Section 122:

• Rate: 10% on all countries (Trump has signalled intent to raise to 15%, not yet implemented as of this writing)
• Expiry: 150 days from February 24 — expires approximately July 23, 2026, unless extended by Congress
• Canada/Mexico exception: CUSMA/USMCA-qualifying goods are exempt. If your goods meet CUSMA origin rules, the 10% does not apply.
• Section 232 exception: Goods already subject to Section 232 tariffs (steel, aluminum, autos, copper, timber, lumber) are excluded from the 10% surcharge — but the Section 232 duties themselves remain fully in effect.
• Section 301 exception: Existing Section 301 tariffs on Chinese goods are unaffected and remain in force.

For most CUSMA-compliant Canadian exporters to the US: the effective tariff picture improved significantly on February 24. Goods that previously faced a 25% IEEPA tariff now face 0% (if CUSMA-qualifying) or 10% (if not).

What’s Coming Next
Section 122 is a temporary bridge. On March 11, the USTR launched new Section 301 investigations targeting over 15 countries — including China, Mexico, the EU, Vietnam, South Korea, and others — for “structural excess capacity and production in manufacturing sectors.” Canada was not named in the initial round.

Section 301 investigations take months — public comment periods, hearings, USTR findings — before any tariffs can be imposed. Treasury Secretary Bessent has predicted tariffs will return to pre-ruling levels by August 2026. The most likely sequence: Section 122 expires in July, Section 301 tariffs kick in around the same time for the named countries.

The CUSMA review — the scheduled renegotiation of the US–Canada–Mexico trade agreement — is ongoing in parallel. The outcome of that review will significantly shape Canada’s long-term tariff exposure.

The Refund Question
The Supreme Court ruling did not address refunds of IEEPA tariffs already paid. The court acknowledged it would be a “mess.” CBP has been ordered to re-liquidate unliquidated entries without IEEPA duties, but the refund process for liquidated entries is being litigated. If your business paid significant IEEPA duties on Canadian or other imports in 2025 and early 2026, this is worth reviewing with your customs broker. File a protest to preserve your refund rights while the process plays out.

What This Means for Compliance Teams
Three practical actions worth taking this week:

1. Verify your CUSMA origin documentation. The exemption from the 10% Section 122 surcharge hinges on CUSMA qualification. If your certificates of origin are outdated or your classification has changed, you may be paying 10% unnecessarily.
2. Audit any goods subject to Section 232. Steel, aluminum, auto parts, copper, timber, and lumber face their own duty stack that is entirely separate from the IEEPA-to-Section 122 transition. These have not changed and will not be refunded.
3. Plan for July. Section 122 expires in approximately 130 days. Section 301 tariffs on the named countries are likely to be in place by then. If you source from China, Mexico, the EU, or any of the 15+ named economies, build that scenario into your Q3 cost planning now.

The Data Picture
For those tracking HTS codes: as of this week, the TradeFacts.io nightly diff shows no structural changes to the US HTS schedule since the ruling. The MFN rates and special program rates in the schedule itself are unchanged — the Section 122 surcharge applies on top of existing rates via a separate proclamation, not as a change to the tariff schedule. This means your classification-based rate lookups remain valid; the additional 10% is an overlay.

On the Canadian side: one minor CBSA code removal was detected in early March (a legacy yarn classification). The 2026 CBSA schedule is otherwise stable. CUSMA preferential rates (the UST column in the Canadian tariff) are unaffected.

About Tariff Wire
Tariff Wire is a free weekly digest of US & Canadian tariff changes, published by TradeFacts.io — the only API combining live US HTS and Canadian Customs Tariff data with nightly change detection. If someone forwarded this to you, subscribe free here.