Macro Flash Note – February 23, 2026: TRUMP ADMINISTRATION’S RECIPROCAL TARIFFS INVALIDATED, YET POLICY UNCERTAINTY REMAINS UNRESOLVED

On February 20, 2026, the US Supreme Court issued a ruling invalidating the executive branch’s legal basis for its global tariff regime, previously enacted under the International Emergency Economic Powers Act (IEEPA). Rather than signaling a structural retreat from protectionism, we believe this development merely shifts the risk profile, engendering a more complex and unpredictable macroeconomic environment.

Overview of the Court’s ruling:

• The utilization of IEEPA to enact global tariffs was deemed constitutionally unfounded, prompting the Court to void the tariff collections imposed by the Trump Administration on foreign goods.
• The US government must refund the collected duties from reciprocal tariffs applied to imports (estimated between US$132bn and US$175bn)—requiring enterprises to proactively file administrative claims within a 180-day window.

Trump Administration’s response:

• The White House announced the invocation of Section 122 of the Trade Act of 1974 (balance-of-payments deficits) to impose a 15% supplementary global tariff, up from the prior 10% baseline, while maintaining the effective tariff rate at 13.7%.
• However, Section 122 tariffs carry a 150-day time limit (unless extended via Congressional resolution). Consequently, the Trump Administration is accelerating investigations under Section 232 (national security) and Section 301 (unfair trade practices) to convert temporary tariffs into permanent fixtures.

• Alongside broad-based tariffs, the Trump Administration maintains pressure via specialized levies applied to strategic sectors such as AI chips, steel and aluminum, automobiles and components, home appliances, wood and furniture, and Chinese-origin products generally.

ACBS’s QUICK COMMENT:

• The fragmentation process in global trade among economic blocs is accelerating.
• Furthermore, the Court’s invalidation ruling cannot rapidly alter the US macroeconomic backdrop (decelerating GDP growth paired with sticky inflation), as the tariff refund process will likely face protracted delays due to administrative bottlenecks.
• On a separate note, the uncertainty surrounding US foreign policy will continue to catalyze the supply chain diversification trend toward a “local-for-local” model and agile manufacturing networks—a new paradigm built upon the “China Plus N” foundation.
• Notably, although Vietnam has yet to secure a trade agreement with the US under IEEPA, this development effectively reduces the reciprocal tariff exposure from 20% to the newly announced 15% rate.
• Sectors poised to benefit from these policy shifts include: export-oriented enterprises (textiles, seafood, wood, etc.), industrial park (IP) real estate developers, and freight transportation/logistics.