Question Period Note: U.S. Supreme Court Decision on IEEPA Tariffs

Canada is aware of the decision of the U.S. Supreme Court that the tariffs applied by the United States under the IEEPA are invalid, including those imposed against Canada on

» Canadian exports continue to be subject to other U.S. tariffs, namely section 232 tariffs imposed on key sectors like steel, aluminum, autos, copper, lumber and wood products.

» Canada stands ready to continue discussions with the United States on tariffs with a view to restoring predictability and stability for businesses on both sides of the border.

» Up until the U.S. Supreme Court decision last week, Canada had the best trade arrangement with the United States - and we expect that this will continue.

» Following the decision, President Trump imposed a new 10% global tariff - but importantly, the CUSMA carve-out remains in place.

» In addition, unlike the fentanyl tariffs, the new global tariff exempts other goods important to Canadian exporters, such as aircraft fuselage, coffee and cocoa products.

On February 20, 2026, the U.S. Supreme Court released its ruling invalidating tariffs imposed under the International Emergency and Economic Powers Act (IEEPA), including the fentanyl tariffs imposed on Canada and Mexico. The ruling does not impact tariffs levied under Section 232 of the Trade Expansion Act of 1962.
On February 20, in response to the Supreme Court's decision, President Trump rescinded all Executive Orders imposing tariffs under IEEPA and, via a Proclamation, replaced them with a global 10% tariff under Section 122 of the Trade Act of 1974.
Importantly for Canada, the Proclamation maintains the carve-out for CUSMA-compliant goods, while the tariff rate for CUSMA non-compliant goods has actually improved. CUSMA non-compliant goods will now be subject to the10% Section 122 tariff rather than the 35% IEEPA tariff. Additionally, some CUSMA non-compliant goods like coffee, Airbus' mid fuselage, certain autos and parts not covered by Section 232 tariffs, cocoa butter, and cocoa paste are exempted from the 10% tariff.
On Saturday, February 21, President Trump posted on Truth Social that he plans to increase the Section 122 tariffs from 10% to 15% - the maximum that can be imposed under this provision - effective “immediately”. To increase the duty rate, the White House will need to issue a new order.

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