Legal Loophole? Why Trump’s New 15% Tariff Face a Fresh Court Battle

In the world of global trade, 24 hours can change everything. On Friday, February 20, 2026, the U.S. Supreme Court (SCOTUS) delivered a stinging blow to the White House by declaring the "Reciprocal Tariffs" under the IEEPA law illegal. Yet, by Saturday morning, President Donald Trump had already pivoted, announcing a new 15% global import surcharge.

While the administration claims this new move is "legally bulletproof," legal experts and constitutional scholars are already pointing to three major reasons why the 15% tariff might land right back in the courtroom.

1. The "Power of the Purse" Conflict

The core of the Supreme Court's recent 6-3 decision in Learning Resources, Inc. v. Trump was simple: Tariffs are taxes. Under Article I of the U.S. Constitution, the power to tax belongs exclusively to Congress, not the President.

By using Section 122 of the Trade Act of 1974 to impose a blanket 15% tax, Trump is again testing the "Major Questions Doctrine." Critics argue that a president cannot unilaterally impose a massive economic burden on the nation without an explicit, clear mandate from Congress—a mandate that Section 122 may not provide for such a broad, global scale.

2. The "Balance-of-Payments" Debate

Section 122 is a rarely used "emergency" tool designed to address "large and serious United States balance-of-payments deficits." * The Government’s Argument: The administration argues that the $900 billion trade deficit and risks to the U.S. Dollar constitute a payments emergency.

• The Legal Challenge: Opponents argue that a "trade deficit" (buying more goods than you sell) is conceptually different from a "balance-of-payments crisis" (not having enough foreign currency to pay debts). If a court agrees that there is no actual "emergency," the legal basis for the 15% surcharge evaporates.

3. The 150-Day "Cliff"

Unlike the previous IEEPA tariffs, Section 122 has a built-in expiration date. It is a temporary measure that lasts for only 150 days unless Congress votes to extend it.

• Any attempt by the White House to extend these tariffs indefinitely without a Congressional vote will trigger an immediate injunction.

• With mid-term elections approaching in November 2026, the political appetite in Congress to support these taxes is at an all-time low.

What This Means for Indian Exporters

For businesses in India, the situation is a double-edged sword.

The Good News: Since February 24, 2026, U.S. Customs has stopped collecting the old "illegal" duties. This effectively lowered the tariff on many Indian goods from 18% down to 10% (and now 15% as the new surcharge kicks in).

The Bad News: The uncertainty is "economic poison." Importers are hesitant to sign long-term contracts when the legal status of the tariff could change with a single judge’s signature.