Trump turns to 1974 Trade Act to salvage tariff agenda after Supreme Court defeat
The administration's legal chess match over import tariffs is rattling crypto markets, with Bitcoin sliding toward $65K amid trade uncertainty
The Trump administration lost its preferred tariff weapon in February 2026 when the Supreme Court ruled 6-3 that the International Emergency Economic Powers Act doesn’t actually authorize import tariffs. Rather than accept the setback, the White House pivoted to a dusty provision from the 1974 Trade Act, slapping a global tariff on most imports and daring the courts to stop that one too.
The legal play-by-play
After the Supreme Court shut down the IEEPA route, the administration quickly turned to Section 122 of the Trade Act of 1974. That provision allows the president to impose temporary tariffs to address balance-of-payments deficits. The initial rate was set at 10%, then bumped to 15% on a global basis, with a 150-day clock that puts the expiration somewhere around late July 2026.
On May 7, 2026, the US Court of International Trade ruled 2-1 that the Section 122 tariffs were unlawful. The court’s reasoning was straightforward: the tariffs exceeded the authority Congress granted for addressing balance-of-payments issues.
Despite that ruling, the administration continues to litigate. The tariffs remain a live issue as the July deadline approaches.
Why crypto cares about trade law
Bitcoin dropped below $68,000 in February 2026 when tariff escalation fears peaked. The broader slide pushed prices toward the $65,000 to $68,000 range, a meaningful pullback that coincided directly with the tariff announcement and surrounding legal chaos.
The July deadline and what comes next
The 150-day window for Section 122 tariffs is set to expire around July 20-24, 2026. That creates a hard deadline the administration can’t easily wish away, and several possible scenarios that markets need to price in.
The first option is congressional action. If the White House can convince enough lawmakers, Congress could pass legislation authorizing the tariffs on firmer legal ground. The second option is another legal pivot. The third option is simply letting the tariffs expire.
No specific cryptocurrencies were linked directly to the tariff legal maneuvers, although Bitcoin’s price reacted to related news. The impact flows entirely through sentiment and macro positioning.