VCI Legal – March 3, 2026

The U.S. Supreme Court’s February 20 decision striking down tariffs imposed under emergency economic powers marks a significant constitutional check on executive trade authority. The Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose broad, economy-wide tariffs, reaffirming that tariff authority belongs to Congress unless explicitly delegated. 

Why the Court found the tariffs unlawful 

The majority emphasized three core principles. First, tariffs are fundamentally revenue-raising and trade-regulating measures – powers historically reserved to Congress. Second, while IEEPA permits economic restrictions during national emergencies, the statute does not clearly authorize across-the-board tariffs affecting the entire economy. Third, applying the major questions doctrine, the Court ruled that actions with vast economic and political significance require unmistakably clear congressional authorization, which was absent here. 

The decision does not prevent targeted trade measures tied to national security or unfair trade practices. Instead, it narrows the executive branch’s ability to impose sweeping tariffs using emergency powers. 

Likeliest next steps: alternative statutory pathways 

Within days of the ruling, the administration signaled it may rely on other trade statutes that were not challenged in the case. Potential authorities include: 

• Section 122 of the Trade Act of 1974, allowing temporary tariffs (up to 150 days) to address balance-of-payments concerns; 

• Section 301 of the Trade Act of 1974, permitting tariffs to counter unfair foreign trade practices; 

• Section 232 of the Trade Expansion Act of 1962, authorizing tariffs on national security grounds; 

• Section 338 of the Tariff Act of 1930, rarely used but allowing tariffs against discriminatory trade practices. 

These statutes involve procedural requirements – investigations, findings, and consultations – that could make future tariffs more legally defensible than those invalidated by the Court. 

How opponents are likely to challenge new tariffs 

If new tariffs are imposed under alternative statutes, litigation is expected to shift from constitutional arguments to statutory compliance and procedural adequacy. Likely challenges include: 

• failure to meet statutory prerequisites (e.g., inadequate investigations or findings), 

• misuse of national security or unfair trade justifications, 

• arbitrary or disproportionate tariff levels under administrative law standards, and 

• violations of due process or Administrative Procedure Act (APA) requirements. 

Courts historically give substantial deference to executive findings in national security and trade matters. As a result, tariffs grounded in Section 232 or Section 301 procedures may face a higher bar for successful challenges compared with the invalidated emergency tariffs. 

How long the legal conflict may last 

The internal legal battle over tariff authority is unlikely to resolve quickly. 

• Refund litigation over previously collected duties could take 1–3 years to resolve. 

• Challenges to new tariff measures may take 12–24 months to reach appellate decisions. 

• If the Supreme Court is asked to clarify the limits of alternative statutory authorities, the broader constitutional questions could remain unsettled for several years. 

Meanwhile, tariffs imposed under alternative authorities may remain in effect during litigation, prolonging commercial uncertainty. 

What this means for exporters and investors 

The Court’s decision limits one pathway for sweeping tariffs but does not eliminate U.S. protectionist tools. Instead, it shifts the battlefield from constitutional authority to statutory procedure and administrative justification. 

For Vietnam and ASEAN exporters, tariff risk is therefore evolving rather than disappearing. Businesses should anticipate continued policy volatility, review contract pricing mechanisms, and monitor new tariff actions and refund opportunities. 

Contact us 

If you would like assistance assessing how evolving U.S. tariff measures may affect your exports, contracts, or investment planning, please contact VCI Legal for tailored guidance. 

About VCI Legal:

VCI Legal is an award-winning business law firm in Vietnam with a wide range of legal and corporate services, among other things, corporate, banking & finance, tax, labor & HR, real estate and dispute resolution with special focus on international investment disputes, We also offer our specialized type of service called “In-House Counsel Service” with the aim of assisting our clients in dealing with all types of internal and external issues arising from their day-to-day operations and business activities. With our offices in both Hanoi and Ho Chi Minh City, we have a tremendous depth of experience in providing well-reasoned and comprehensive legal advice to not only multinationals and Fortune 500 companies, but also small and medium enterprises.

Our professional team comprises one of the leading law firms in Vietnam with service quality highly recommended and acknowledged by international legal service reviewers such as: The Legal 500, AsiaLaw Profiles, IFLR, KPMG’s Tax Directors’ Handbook, Acquisition International, ACQ Global, Global Law Experts, Finance Monthly, and Chambers & Partners.

For many years, VCI Legal has been ranked among the top law firms in Vietnam for corporate, finance, insurance, taxation, employment, intellectual property and investment. With a “Can Do Attitude” combined with a “Know How” capacity, our firm is big enough to provide comprehensive legal support for any in-house legal matters, yet small enough to care about each of our clients. We undertake each engagement with the mindset of a long-term relationship, with the will to give whatever it takes to understand and fulfill your needs.

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