Trump Turns to Trade Act Section 122 Tariffs After Supreme Court Curbs Emergency Authority

President Trump moved quickly to a new legal basis for tariffs after the U.S. Supreme Court ruled he cannot rely on emergency powers to tax imports. On Feb. 20, 2026, the Court ruled 6-3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. Chief Justice John Roberts wrote the majority opinion, which vacated prior tariff actions and underscored that tariff-setting is a congressional power under Article I of the Constitution. Within hours, the administration announced a replacement approach. Trump invoked Section 122 of the Trade Act of 1974 to introduce a 10% across-the-board tariff, then increased it to 15% within a day. Under Section 122, such tariffs can remain in effect for up to 150 days without congressional approval. Bitcoin swings on shifting tariff headlines Bitcoin rose about 1.7% immediately after the decision, trading around $67,769 to $68,000, as markets interpreted the ruling as a potential reduction in trade-war uncertainty that has weighed on risk assets, including digital currencies. After Trump announced the Section 122 tariffs, Bitcoin erased those gains. The round trip unfolded over a matter of hours. A narrower legal lane Roberts' opinion drew a bright line: IEEPA may grant broad emergency economic powers, but it was not designed as a tariff statute. Because tariffs function as taxes on imports, the power to impose them rests with Congress. Trump's shift to Section 122 comes with tighter constraints. The statute is intended for temporary measures to address "large and serious" balance-of-payments deficits. The 150-day countdown begins immediately, and the tariffs expire automatically unless Congress passes legislation to extend them. That creates a very different setup from the IEEPA-based tariffs, which lacked a built-in end date. The administration now has roughly five months to persuade lawmakers to codify its trade agenda or to identify another legal pathway. Implications for investors For markets, the 150-day limit sets a defined window of uncertainty and provides a clearer timeline than the open-ended IEEPA framework. Investors are likely to focus on two main catalysts. First, whether Congress shows willingness to extend or alter the Section 122 tariffs; any momentum toward permanent tariff legislation could pressure risk assets broadly. Second, the risk of retaliation from major trading partners, which could amplify market volatility.