Critical Period For US Trade Policy As Current Tariffs Set To Expire
The temporary US tariffs introduced following February’s Supreme Court ruling expire this week, creating arguably the most critical period for American trade policy since the judgement.
On 20 February, the Supreme Court ruled that the International Emergency Economic Powers Act did not authorise the President to impose tariffs. The Trump administration responded almost immediately by introducing a blanket 10% import surcharge under Section 122 of the Trade Act, effective from 24 February.
However, Section 122 can only be used for 150 days without Congressional approval. The tariffs are therefore scheduled to expire at 12:01am US Eastern Time on 24 July.
With Congressional backing considered unlikely, the administration has been working to transfer tariffs onto other legal authorities that do not require approval, including Sections 232, 301 and 338. The apparent strategy is to replace one legally vulnerable global tariff with multiple, potentially more defensible country- and sector-specific measures.
This week, the administration announced additional 50% tariffs on selected Canadian products under Section 338, which allows action against countries considered to discriminate against US commerce. The measures are due to take effect on 19 August. However, Section 338 has remained virtually dormant for decades and has not been extensively tested in modern courts, opening up the potential for further legal challenges.
China, the European Union and the UK could now face more targeted investigations and tariffs based on manufacturing practices, national security or alleged trade discrimination.
Trump Tariff Timeline
- 2 April 2025 – President Trump announces the “Liberation Day” reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA).
- 9 April 2025 – The US significantly increases tariffs on many Chinese imports as the trade dispute escalates.
- 12 May 2025 – The US and China agree a temporary reduction in tariffs for a 90-day negotiation period.
- 20 February 2026 – The Supreme Court rules that IEEPA does not authorise the President to impose the broad tariffs.
- 24 February 2026 – Temporary 10% blanket tariffs introduced under Section 122 of the Trade Act.
- 24 July 2026 – Section 122 tariffs expire at 12:01am US Eastern Time unless replaced.
- 19 August 2026 – Additional tariffs of up to 50% on selected Canadian goods are scheduled to take effect under Section 338.
The changing legal framework creates further uncertainty for international supply chains. Atlantic Pacific continues to monitor developments and their potential impact on global trade.
