Trump’s New Tariffs: What Businesses Demand to Grasp Now
U.S. Importers are bracing for a new round of tariffs, despite a recent Supreme Court ruling against President Trump’s previous use of the International Emergency Economic Powers Act (IEEPA). The administration has swiftly responded by implementing a 10% tariff, effective February 24, 2026, under the authority of Section 122 of the Trade Act of 1974. This development throws into question recently signed trade agreements and creates uncertainty for businesses relying on predictable trade conditions.
Supreme Court Ruling and the Shift to Section 122
The Supreme Court struck down Trump’s tariffs imposed via IEEPA, finding that the president lacked the authority to impose broad-based global tariffs under the guise of a national emergency. However, the administration circumvented this ruling by invoking Section 122, a different legal framework. Although initially suggested to be 15%, the current tariff is set at 10% and is scheduled to remain in effect until July 24, 2026, unless Congress intervenes.
Impact on Importers: Still Paying Duties
Despite the Supreme Court’s decision, U.S. Customs and Border Protection (CBP) had not yet updated its systems as of February 22, 2026, meaning importers continued to pay duties on goods entering the country. An estimated 211,000 containers, valued at $8.2 billion, arriving between February 20 and February 22 were still subject to IEEPA tariffs. The CBP has stated it is working to implement the changes, but a clear timeline for system updates remains unclear.
Which Goods Are Affected?
The 10% “temporary tariff” isn’t universally applied. Exemptions include critical minerals, metals used in currency, energy products, and certain resources and fertilizers not readily available domestically. Specific agricultural products, pharmaceuticals, and electronics are also excluded, though a detailed list hasn’t been released.
CAFTA-DR Countries: A Notable Exception
A significant exception applies to textiles and apparel originating from Costa Rica, the Dominican Republic, El Salvador, Guatemala, and Honduras, and Nicaragua under the CAFTA-DR agreement. These goods remain tariff-free. This is particularly relevant as El Salvador recently signed a reciprocal trade agreement with the U.S. Aimed at eliminating the previous 10% tariff, but that agreement is now potentially invalidated by the new tariffs imposed under Section 122.
The El Salvador Agreement: In Limbo?
Silvia Cuéllar, president of the Salvadoran Corporation of Exporters (COEXPORT), believes the recent trade agreement between El Salvador and the U.S. Is now in question. The original agreement was based on eliminating tariffs established under IEEPA, and the new tariffs under Section 122 represent a new legal framework, effectively rendering the previous agreement obsolete. Despite this, both President Bukele and the U.S. Trade Representative continue to promote the agreements on social media.
Declining Exports to the U.S.
Data from El Salvador’s Central Reserve Bank shows a continuous decline in exports to the U.S. Since 2022, reaching $2.086 billion in 2025, a 2.3% decrease from 2024. Key exports include textiles, electrical capacitors, sugar, and coffee.
What’s Next? Potential Future Trends
The situation remains fluid. The Trump administration is likely to pursue further investigations under other authorities to potentially replicate the effects of the IEEPA tariffs before the current 10% tariff expires. Businesses should prepare for ongoing trade policy volatility and the possibility of additional tariff actions. The reliance on Section 122 raises questions about the long-term stability of trade relations and the balance of power between the executive and legislative branches regarding trade policy.
FAQ
Q: When do the new tariffs go into effect?
A: February 24, 2026.
Q: Are all goods subject to the 10% tariff?
A: No, certain products are exempt, including critical minerals, energy products, and goods from CAFTA-DR countries.
Q: What is Section 122?
A: Section 122 of the Trade Act of 1974 provides the President with authority to impose tariffs in response to unfair trade practices.
Q: Will the trade agreement between El Salvador and the U.S. Still be valid?
A: It is currently unclear, as the agreement was based on the now-invalidated IEEPA tariffs.
Pro Tip: Stay informed about updates from U.S. Customs and Border Protection (CBP) and consult with trade legal counsel to ensure compliance.
Did you know? The Supreme Court’s decision highlights the ongoing debate over the limits of presidential power in economic matters.
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