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Macro EconomyMedium•23 February 2026•

1 min read

US Supreme Court Limits Tariff Powers; NBC Forecasts Sharp Drop in Effective Rates

Emmanuel Macron's face centered between cracked Visa and Mastercard cards, with Euro and Ethereum symbols, bank buildings, and digital payment cards.

Key Facts

1The U.S. Supreme Court struck down tariffs based on the International Emergency Economic Powers Act (IEEPA).

The U.S. Supreme Court has issued a landmark ruling striking down tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA). Analysts at the National Bank of Canada (NBC) anticipate that this decision could effectively halve the average effective tariff rate currently in place. The ruling marks a significant constraint on executive power regarding trade protectionism and the use of emergency economic measures. Despite the legal setback, the White House maintains access to various alternative legal frameworks to keep trade barriers elevated. This judicial shift introduces a layer of complexity for global trade partners, particularly affecting outlooks for USD/CNY and USD/MXN. Market participants remain cautious as they evaluate how the administration will pivot its trade strategy in response to the court's limitations.