24 States Challenge Trump's Section 122 Tariffs Following SCOTUS Defeat

The legal battle over U.S. trade policy has entered a volatile new chapter as 24 states move to block the Trump administration’s latest attempt to impose global import duties. This litigation is not merely a policy disagreement but a fundamental constitutional challenge regarding the limits of executive authority over international commerce. The conflict intensified after the Supreme Court delivered a 6-3 ruling in February 2026, which stripped the administration of its ability to use the International Emergency Economic Powers Act (IEEPA) for broad tariff implementation. In a swift pivot, the administration invoked Section 122 of the Trade Act of 1974—a dormant provision never before utilized by a U.S. president—to enact a 10% surcharge on all global imports, with stated plans to escalate that figure to 15%.

For the e-commerce and retail sectors, the stakes of this legal showdown are existential. The administration’s aggressive trade stance has already fundamentally altered the cost structure of American retail. In 2025, the U.S. collected a staggering $287 billion in customs duties, taxes, and fees, representing a 192% increase from the previous year. While the administration maintains that foreign exporters absorb these costs, the retail industry and several economic studies suggest that these levies are largely passed down to U.S. consumers and businesses. A 15% blanket tariff would effectively act as a national sales tax on imported goods, squeezing margins for e-commerce platforms that rely on global supply chains and potentially dampening consumer spending during a period of economic transition.

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collected a staggering $287 billion in customs duties, taxes, and fees, representing a 192% increase from the previous year.

The core of the states' argument rests on the separation of powers. By invoking Section 122, the President is claiming the authority to address 'large and serious United States balance-of-payments deficits' through temporary import surcharges. However, the coalition of attorneys general argues that the administration is using this specific, narrow economic tool as a loophole to bypass the Supreme Court’s recent restrictions on executive-led trade barriers. Because Section 122 has no historical precedent of use, the judiciary is now tasked with defining its boundaries for the first time. This creates a period of intense uncertainty for logistics planners and procurement officers who must decide whether to price in these tariffs or bet on their eventual judicial repeal.