Last week, the tariff landscape shifted quickly and significantly — the Supreme Court struck down the broad tariffs imposed under the International Emergency Economic Powers Act, the administration responded within hours with a new legal authority and a new global rate, and the effective tariff rate ended the week lower than it started. That is a modest positive, but the situation remains fluid and the path forward is far from settled. Here is a clear-eyed breakdown of what happened, what it means, and how we are thinking about it in the context of your financial plan.
The Supreme Court Ruling
On February 20th, the Supreme Court ruled 6-3 that President Trump did not have the authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). That law had been used to justify the broad reciprocal tariffs and country-specific tariffs on Canada, China, Mexico, and others. Those tariffs are now struck down.
Important: the ruling does not affect tariffs already in place under other legal authorities, including existing tariffs on steel, aluminum, and autos.
The Administration’s Response — New 15% Global Tariff
Within hours of the ruling, the administration announced a new global tariff under Section 122 of the Trade Act of 1974. Here is what matters:
The rate is 15%, raised from an initial 10% over the weekend. Section 122 tariffs are capped at 15% and expire after 150 days. The current expiration is July 24th.
Unlike the prior tariffs, Section 122 must apply universally. No country-specific rates can be set. USMCA-compliant imports from Canada and Mexico remain largely exempt. The 15% does not stack on top of existing steel, aluminum, and auto tariffs.
Where does the effective tariff rate stand now? Before the ruling, approximately 16%. After the ruling struck down IEEPA, it dropped to 9.1%. With Section 122 in place, it is now estimated at roughly 13.7% (Yale Budget Lab).
What About Refunds?
The Court did not address refunds directly. Goldman Sachs estimates roughly $180 billion in tariffs were collected under IEEPA. Whether importers get repaid will be decided by lower courts. Treasury Secretary Bessent indicated the process could take years.
This matters beyond the legal question. Large-scale refunds could add meaningful pressure to the federal deficit, which could in turn push long-term interest rates higher. Worth watching.
What Happens After July 24th?
Congress is unlikely to extend Section 122. The administration has signaled it would turn to other tools:
Section 301 allows more permanent tariffs tied to unfair trade findings, but requires formal investigations that typically take months. That creates a window of uncertainty for importers trying to plan ahead.
Section 232 allows tariffs on industries deemed a national security concern, with no time limit and no 15% cap. In practice, this would likely be used for targeted sectors such as autos, semiconductors, and pharmaceuticals rather than a broad global tariff.
Who Is Actually Paying for the Tariffs?
The Federal Reserve Bank of New York found that companies and consumers have shouldered more than 90% of tariff costs. Goldman Sachsestimates tariff passthrough to consumer prices reached just over 60% after 10 months and expects that figure to peak around 70%. The cost is real and it is landing on households.
What This Means for Your Financial Plan
Tariffs are not going away. The administration will continue to use them as a policy and negotiating tool, and last week made clear it will move quickly to find new legal authorities when existing ones are challenged.
The Supreme Court decision is a modest positive — the effective tariff rate is lower today than it was last week — but the situation remains fluid and the uncertainty is real.
This is not the environment to make reactive portfolio decisions. A disciplined investment philosophy built around staying the course, using volatility opportunistically, maintaining diversification, and mitigating the drag of taxes and unnecessary costs is designed for periods like this one, not derailed by them.
A financial plan built around a complete Total Net Worthpicture is designed to hold up through exactly this kind of noise. We are watching closely and will continue to share our perspective as things develop.
DISCLOSURES
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
< COMMENTARY
Market Commentary | February 24, 2026
What Happened with Tariffs Last Week?
By Andrew Murphy, CFA
Co-Chief Investment Officer
Last week, the tariff landscape shifted quickly and significantly — the Supreme Court struck down the broad tariffs imposed under the International Emergency Economic Powers Act, the administration responded within hours with a new legal authority and a new global rate, and the effective tariff rate ended the week lower than it started. That is a modest positive, but the situation remains fluid and the path forward is far from settled. Here is a clear-eyed breakdown of what happened, what it means, and how we are thinking about it in the context of your financial plan.
The Supreme Court Ruling
On February 20th, the Supreme Court ruled 6-3 that President Trump did not have the authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). That law had been used to justify the broad reciprocal tariffs and country-specific tariffs on Canada, China, Mexico, and others. Those tariffs are now struck down.
The Administration’s Response — New 15% Global Tariff
Within hours of the ruling, the administration announced a new global tariff under Section 122 of the Trade Act of 1974. Here is what matters:
The rate is 15%, raised from an initial 10% over the weekend. Section 122 tariffs are capped at 15% and expire after 150 days. The current expiration is July 24th.
Unlike the prior tariffs, Section 122 must apply universally. No country-specific rates can be set. USMCA-compliant imports from Canada and Mexico remain largely exempt. The 15% does not stack on top of existing steel, aluminum, and auto tariffs.
Where does the effective tariff rate stand now? Before the ruling, approximately 16%. After the ruling struck down IEEPA, it dropped to 9.1%. With Section 122 in place, it is now estimated at roughly 13.7% (Yale Budget Lab).
What About Refunds?
The Court did not address refunds directly. Goldman Sachs estimates roughly $180 billion in tariffs were collected under IEEPA. Whether importers get repaid will be decided by lower courts. Treasury Secretary Bessent indicated the process could take years.
This matters beyond the legal question. Large-scale refunds could add meaningful pressure to the federal deficit, which could in turn push long-term interest rates higher. Worth watching.
What Happens After July 24th?
Congress is unlikely to extend Section 122. The administration has signaled it would turn to other tools:
Section 301 allows more permanent tariffs tied to unfair trade findings, but requires formal investigations that typically take months. That creates a window of uncertainty for importers trying to plan ahead.
Section 232 allows tariffs on industries deemed a national security concern, with no time limit and no 15% cap. In practice, this would likely be used for targeted sectors such as autos, semiconductors, and pharmaceuticals rather than a broad global tariff.
Who Is Actually Paying for the Tariffs?
The Federal Reserve Bank of New York found that companies and consumers have shouldered more than 90% of tariff costs. Goldman Sachs estimates tariff passthrough to consumer prices reached just over 60% after 10 months and expects that figure to peak around 70%. The cost is real and it is landing on households.
What This Means for Your Financial Plan
Tariffs are not going away. The administration will continue to use them as a policy and negotiating tool, and last week made clear it will move quickly to find new legal authorities when existing ones are challenged.
The Supreme Court decision is a modest positive — the effective tariff rate is lower today than it was last week — but the situation remains fluid and the uncertainty is real.
This is not the environment to make reactive portfolio decisions. A disciplined investment philosophy built around staying the course, using volatility opportunistically, maintaining diversification, and mitigating the drag of taxes and unnecessary costs is designed for periods like this one, not derailed by them.
A financial plan built around a complete Total Net Worth picture is designed to hold up through exactly this kind of noise. We are watching closely and will continue to share our perspective as things develop.
DISCLOSURES
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.