U.S. Tariff Developments Post Supreme Court Ruling
Background
The U.S. Supreme Court’s decision in Learning Resources, Inc. v. Trump (February 20, 2026) represents a pivotal development in international trade law. The Court held that the use of the International Emergency Economic Powers Act (IEEPA) to impose broad-based import tariffs exceeded the scope of authority delegated to the President of the United States.
Although the ruling establishes clear constitutional limits on executive tariff authority, it does not diminish the central role of tariffs in U.S. trade policy. The administration’s swift recourse to alternative statutory mechanisms underscores continued reliance on tariff measures and heightens uncertainty for Thai exporters and other affected parties.
1. Constitutional Limits on Tariff Authority
In a 6–3 decision, the Supreme Court reaffirmed that the constitutional authority to set tariffs is vested in Congress. The Court concluded that IEEPA does not provide sufficiently clear authorization for the imposition of broad-based import duties; accordingly, it cannot serve as a valid legal basis for such measures.
Notably, the Court declined to order immediate remedies. Instead, it remanded the question of refunds to the United States Court of International Trade, leaving implementation to be resolved through established customs law procedures.
2. Refunds: A Legal Entitlement Subject to Procedure
Although the tariffs have been declared unlawful, recovery of duties paid is not automatic. Importers must act within the U.S. customs law framework, including by filing timely protests and, where necessary, pursuing claims before the United States Court of International Trade.
Recent developments indicate that the Court of International Trade is moving toward a more structured refund mechanism, potentially inclusive of interest. However, the process remains procedurally complex and administratively burdensome, requiring proactive engagement from affected importers.
3. Policy Realignment: Section 122 Tariffs
In response to the ruling, the U.S. President promptly invoked Section 122 of the Trade Act of 1974 to impose a temporary tariff on imports from all countries. This measure reflects a strategic adjustment, demonstrating that the executive branch retains meaningful statutory tools to sustain its tariff policy objectives.
Key features of the Section 122 measure include:
- A uniform global tariff rate of 10–15%;
- A statutory ceiling of 15%;
- A duration of up to 150 days, unless extended by Congress; and
- Application in addition to existing duty obligations.
4. Section 301 Investigation: Implications for 16 Jurisdictions
On March 11, 2026, the Office of the United States Trade Representative (USTR) initiated a Section 301 investigation covering 16 jurisdictions, including Thailand. The investigation examines whether certain trade practices constitute unreasonable or discriminatory conduct, with particular attention to structural overcapacity in the manufacturing sector.
The scope of the investigation remains broad and may extend to digital trade, pharmaceutical pricing, market access, and environmental policies. Under Section 301, the USTR is empowered to impose remedial measures, including additional tariffs and investment restrictions.
Thailand has been identified as a jurisdiction of concern, primarily owing to relatively low capacity utilization in the automotive, machinery, and rubber sectors, as well as concerns regarding potential tariff circumvention linked to increased foreign direct investment. These factors may result in heightened scrutiny of Thailand’s role in global supply chains.
The procedural timeline is as follows:
- Government consultations;
- Written submissions: March 17 – April 15, 2026;
- Public hearings: commencing May 5, 2026; and
- Expected completion within 150 days of initiation.
5. Implications for Thai Exporters
The evolving U.S. tariff framework presents several material risks for Thai exporters:
- Loss of competitive advantage: A uniform global tariff eliminates country-specific preferential treatment, reducing pricing differentiation.
- Policy uncertainty: Temporary measures may be extended, modified, or replaced with more burdensome instruments.
- Cost impact: Additional duties directly affect product pricing, margins, and overall competitiveness in the U.S. market.
- Regulatory volatility: Rapid legal and policy shifts are increasingly a defining feature of U.S. trade policy, necessitating ongoing monitoring and agile response strategies.
6. Practical Considerations
Thai exporters are advised to adopt a proactive and structured approach to managing tariff exposure. Recommended actions include:
- Reviewing customs classification to ensure accuracy and minimize the risk of misclassification disputes;
- Adjusting pricing and cost structures to reflect prevailing tariff obligations;
- Monitoring import timing in accordance with U.S. customs entry requirements;
- Coordinating with U.S. importers to preserve and exercise available refund rights; and
- Conducting scenario planning to anticipate and respond to potential policy changes.
Conclusion
The Supreme Court’s ruling in Learning Resources, Inc. v. Trump establishes meaningful constitutional constraints on executive tariff authority; however, it does not diminish the central role of tariffs in U.S. trade policy. The administration’s swift transition to alternative instruments — notably Section 122 and Section 301 — confirms continued reliance on tariff-based measures as tools of commercial and geopolitical leverage.
While refund opportunities may arise for duties previously paid under IEEPA authority, recovery remains procedurally complex and requires active legal engagement. For Thai exporters, the combination of heightened policy uncertainty, increased cost pressures, and intensified regulatory scrutiny underscores the imperative for proactive compliance, rigorous strategic planning, and the full integration of legal considerations into business decision-making.
Author: Panisa Suwanmatajarn, Managing Partner.
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