What did the Supreme Court rule about IEEPA tariffs?

The Court ruled 6-3 that using IEEPA to impose tariffs on imports is unconstitutional. IEEPA was designed for economic sanctions and emergencies, not broad trade policy. All existing IEEPA tariffs were immediately voided.

What is the Section 122 surcharge?

Section 122 of the Trade Act of 1974 allows the president to impose a temporary import surcharge of up to 15% for 150 days without Congressional approval. It took effect Feb 24, 2026 as a replacement for the voided IEEPA tariffs.

How does this affect China-sourced products?

China import tariffs dropped from 145% under IEEPA to 15% under Section 122. This is a massive cost reduction for sellers sourcing from China, though the rate is temporary and could change after July 24.

Is the de minimis exemption back?

No. The de minimis exemption for packages under $800 was eliminated when IEEPA tariffs took effect. The Section 122 surcharge does not restore it. All imports are subject to the 15% surcharge regardless of value.

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Breaking

Fees & Costs

SCOTUS Strikes Down IEEPA Tariffs

Max

February 25, 2026

5 min

Summarize with AI

COO at Nova Analytics

Max leads operations at Nova Analytics, helping Amazon sellers optimize their business performance through data-driven insights and strategic automation.

Quick Summary

•Supreme Court ruled 6-3 on Feb 20 that all IEEPA tariffs are unconstitutional
•15% flat global import surcharge under Section 122 took effect Feb 24, replacing rates as high as 145%
•Section 122 surcharge expires after 150 days (July 24) unless Congress acts
•De minimis exemption for sub-$800 packages remains eliminated

Nova surfaces every Amazon fee, refund, and margin shift in your live P&L, across 23 marketplaces. Check the SKU-level breakdown

What's Happening

The Supreme Court ruled 6-3 on February 20, 2026 that all tariffs imposed under the International Emergency Economic Powers Act (IEEPA) are unconstitutional. The decision immediately voided tariffs ranging from 10% to 145% on imports from China, the EU, and other trading partners. Within 48 hours, the White House activated a replacement: a flat 15% global import surcharge under Section 122 of the Trade Act of 1974. The pattern with these announcements: cockpit views show the impact before sellers get the email from Amazon.

Section 122 is legally limited. It caps surcharges at 15%, applies to all imports uniformly, and expires automatically after 150 days (July 24, 2026). The de minimis exemption for packages under $800 remains dead. That loophole closed when the original IEEPA tariffs went into effect, and the new surcharge doesn't restore it.

For Amazon sellers, this is a massive shift. Products sourced from China just saw effective tariff rates drop from 145% to 15%. But the 150-day clock means this rate is temporary. Congress needs to pass new trade legislation before July 24, or the surcharge disappears entirely, leaving no tariff framework in place.

New Surcharge Rate

15%

Flat rate on all imports globally

Previous China Rate

145%

Now reduced to 15% under Section 122

Surcharge Duration

150 Days

Expires July 24, 2026 without legislation

Key Dates & Deadlines

Feb 20, 2026

SCOTUS 6-3 Ruling

Supreme Court strikes down all IEEPA-based tariffs as unconstitutional

Feb 24, 2026

Section 122 Surcharge Active

15% global import surcharge takes effect under Section 122 of the Trade Act

Jul 24, 2026

150-Day Expiration

Section 122 surcharge expires unless Congress passes new trade legislation

What's Exempt and What's Not

Category	Subject to 15%?	Notes
China-sourced goods	Yes	Down from 145% under IEEPA
EU-sourced goods	Yes	Down from 20% under IEEPA
USMCA goods (Canada/Mexico)	Exempt	Trade agreement products excluded
Pharmaceuticals	Exempt	Carved out from the surcharge
De minimis (<$800 packages)	Yes	Exemption remains eliminated

Impact on Amazon Sellers

Immediate Cost Relief for China Sourcing

If you source from China, your import costs just dropped dramatically. A product with $10 landed cost was paying $14.50 in tariffs under IEEPA. Now it's $1.50. That's real margin you can reinvest in advertising or pass through as lower prices.

Pricing Strategy Window

You have 150 days of predictable 15% surcharges. That's enough time to renegotiate supplier contracts, adjust retail prices, or build inventory at lower costs. But don't overcommit. The rate could change dramatically after July 24.

Uncertainty After July 24

If Congress doesn't act, the surcharge expires completely. That sounds great until you realize it also means no tariff framework at all. Congress could pass something higher, lower, or entirely different. Don't plan long-term pricing around 15%.

What You Should Do Now

1.
Recalculate Your COGS Immediately
Update your cost of goods sold to reflect the 15% surcharge instead of previous IEEPA rates. This changes your true profit margins on every imported SKU.
2.
Model Two Scenarios for Post-July Pricing
Build pricing models for both "surcharge expires" and "Congress sets new rates." You need to be ready to adjust quickly no matter what happens after July 24.
3.
Consider Accelerating Inventory Orders
If you source from China, the current 15% rate is historically low. Placing larger orders now could lock in savings before the rate potentially increases after the 150-day window.
4.
Review Competitive Pricing
Your competitors' costs just changed too. Watch for price drops in your category as sellers pass through lower import costs. You may need to adjust to stay competitive.

How Nova Helps

Model Tariff Impact on Your Margins

Nova's P&L Dashboard lets you update COGS instantly across your entire catalog. See exactly how the shift from IEEPA rates to 15% affects your net profit per SKU.

Use Custom Analytics to build tariff scenario models and track margin changes over the 150-day window.

Sources

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Verified Sources

White House: Section 122 Import Surcharge Fact Sheet

All information verified from official Amazon sources and trusted industry analysts as of publication date.

Deep Dive: Related Guides

For more comprehensive analysis on these topics:

→ Amazon FBA profit margins 2026: benchmarks by category

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→ How to Reduce Amazon FBA Fees: 12 Proven Strategies for 2026

Cut your Amazon FBA costs by 15-30% with these 12 actionable strategies. Optimize inbound placement, reduce storage fees, and improve profit margins using proven tactics.

Quick Summary

What's Happening

New Surcharge Rate

Previous China Rate

Surcharge Duration

Key Dates & Deadlines

What's Exempt and What's Not

Impact on Amazon Sellers

Immediate Cost Relief for China Sourcing

Pricing Strategy Window

Uncertainty After July 24

What You Should Do Now

How Nova Helps

Model Tariff Impact on Your Margins

Sources

Ready to Transform Your Amazon Business?

Verified Sources

Deep Dive: Related Guides

Ask Claude about your Amazon data

Ask Claude about your Amazon data

What's Happening

New Surcharge Rate

Previous China Rate

Surcharge Duration

Key Dates & Deadlines

What's Exempt and What's Not

Impact on Amazon Sellers

Immediate Cost Relief for China Sourcing

Pricing Strategy Window

Uncertainty After July 24

What You Should Do Now

How Nova Helps

Model Tariff Impact on Your Margins

Sources

Ready to Transform Your Amazon Business?

Frequently Asked Questions

What did the Supreme Court rule about IEEPA tariffs?

What is the Section 122 surcharge?

How does this affect China-sourced products?

Is the de minimis exemption back?

Frequently Asked Questions

What did the Supreme Court rule about IEEPA tariffs?

What is the Section 122 surcharge?

How does this affect China-sourced products?

Is the de minimis exemption back?