The Supreme Court told President Trump he couldn’t use emergency powers to impose tariffs. His response, roughly paraphrased: “Fine, I’ll use a different law.”

On February 20, 2026, the Court ruled 6-3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not authorize the president to slap tariffs on imports. Chief Justice John Roberts authored the opinion, which vacated previous tariff actions and effectively told the executive branch that tariffs belong to Congress under Article I of the Constitution.

Trump’s team needed roughly the time it takes to brew a pot of coffee before announcing Plan B. The president invoked Section 122 of the Trade Act of 1974 to impose an initial 10% global tariff, then raised it to 15% within a day. Those tariffs can last up to 150 days without Congressional approval.

Bitcoin’s whiplash moment

Bitcoin surged roughly 1.7% immediately after the Supreme Court ruling, climbing to between $67,769 and $68,000. The logic was straightforward. A Supreme Court ruling limiting executive tariff authority looked like it might reduce trade war uncertainty, which has been a persistent headwind for risk assets including digital currencies.

When Trump announced the new tariffs under Section 122, Bitcoin reversed course and gave back its gains. The entire episode played out in a matter of hours.

The legal chess match

Roberts’ opinion drew a clear line: IEEPA, which gives the president broad emergency economic powers, was never intended to be a tariff tool. Tariffs are taxes on imports, and the power to tax belongs to Congress.

Trump’s pivot to Section 122 of the Trade Act of 1974 is strategically limited. That statute allows the president to impose temporary tariffs to address large and serious balance-of-payments deficits. The 150-day clock starts ticking immediately, and unless Congress passes legislation to extend the tariffs, they expire automatically.

This creates a very different dynamic than the IEEPA tariffs, which had no built-in expiration. The administration now has roughly five months to either convince Congress to codify its trade agenda or find yet another legal mechanism.

What this means for investors

The 150-day window creates a defined period of uncertainty. Knowing that these tariffs have an expiration date, absent Congressional action, gives traders a timeline to work with. That’s marginally better than the open-ended IEEPA framework.

Traders should watch two things closely. The first is Congressional appetite for extending or modifying the Section 122 tariffs. Any movement toward permanent tariff legislation would likely weigh on risk assets across the board. The second is whether international trading partners retaliate.