TOXIC BYTE

If you weren’t living inside customs forms or supply-chain spreadsheets, it probably looked like another loud political moment: a court ruling, a quick announcement, a bigger number the next day. But for the people who actually move goods—importers, brokers, warehouse teams, finance managers, small business owners waiting on a container—this wasn’t theater. It was a late-night recalculation of reality.

It started with a loss in court. On February 20, 2026, the Supreme Court said the administration’s emergency-law path didn’t authorize tariffs. Not “we don’t like your policy.” Not “try again with better paperwork.” Just a clean legal boundary: tariffs are duties, duties live in a lane that Congress controls, and the statute being used wasn’t built to carry what the administration had put on it. (supremecourt.gov)

That kind of ruling doesn’t stay in Washington. It reaches into ports and inboxes. It hits the small companies that don’t have a legal department—only a tired owner and a freight forwarder who stops returning calls once the numbers get messy. It hits the bigger companies too, except the chaos is more polite: a calendar invite titled something like “Tariff Update — Urgent,” and a meeting where nobody says they’re scared, but everyone’s posture says they already know they’re going to work late.

Because when tariffs get invalidated, the first question isn’t ideological. It’s practical and slightly panicked: what’s happening to the shipments that are already moving?

A container that left last week doesn’t care about your legal timeline. It still arrives. It still gets entered. Someone still has to declare value and classification. Someone still has to pay whatever Customs says is due. And those “someone”s tend to be ordinary people with ordinary jobs who suddenly have to interpret government actions like they’re decoding weather radar.

The White House didn’t let the vacuum sit. Within hours, it pivoted to a different legal tool: Section 122 of the Trade Act of 1974. In its own words, it was a temporary import duty meant to address a “fundamental international payments problem.” The plan: a 10% across-the-board surcharge for 150 days, scheduled to start February 24 at 12:01 a.m. Eastern. (whitehouse.gov)

That sentence sounds clean until you imagine what it does to a real invoice.

A business that buys $200,000 in product a month hears “10%” and immediately sees $20,000 that wasn’t in the plan. Maybe it can pass that on. Maybe it can’t. Maybe it can for some items, but not for the boring, price-sensitive stuff that customers already complain about. Maybe the company can absorb the cost for a few months, but not 150 days. Or it can absorb it and then lay off the newest hire. Or it can’t absorb it at all and it starts calling suppliers to renegotiate, which is a polite way of saying: “We need you to take some of this pain.”

And then, before most people even had time to brief their teams, the rate went up again.

On February 21, the administration said it would raise the new global tariff from 10% to 15%—the maximum Section 122 allows without Congress extending it. That maximum matters. It tells you this wasn’t meant to be a gentle nudge. It was meant to be loud. It also tells you there’s a timer attached: under Section 122, the surcharge is time-limited unless Congress steps in. (reuters.com)

Fifteen percent sounds like one number, but it behaves like a thousand numbers. Because tariffs don’t land evenly. They land on specific products, under specific classification codes, with specific exceptions. In the real world, “15% on imports” turns into a checklist.

Is your product exempt?

The White House fact sheet includes a long list of carve-outs—categories the administration didn’t want to hit in the early wave, likely because they’re sensitive, strategic, or simply too disruptive to touch all at once. Energy products, some critical minerals and materials, certain agriculture-related items, pharmaceuticals and ingredients, and other specific categories are named in the exemption language. For some businesses, that’s a lifeline. For others, it’s a new fight: because if you can plausibly classify your product inside an exempt category, you will try, and if Customs disagrees, you pay first and argue later. (whitehouse.gov)

Also: does the surcharge stack?

In most cases, yes. This isn’t a clean replacement for every other duty. It’s a new layer on top of whatever duty already exists. That’s why two importers can both say “we got hit with the 15%,” and one of them is fine while the other is suddenly underwater—because one sells higher-margin goods with room to move, and the other sells the kind of item people buy only when it’s cheap.

And then there’s the ghost in the room: refunds.

When the Supreme Court struck down the old tariff authority, it didn’t only turn off a future stream. It called into question money already collected. That’s where corporate tax teams and trade lawyers wake up. Reuters reported that a large amount of tariff revenue could be exposed to refunds and that the administration signaled the fight would likely play out in litigation rather than in quick, automatic payments. For importers, that means uncertainty that lingers: you might be owed money, but you may not get it soon, and you may have to spend money to chase money. (reuters.com)

In the middle of all this, the public argument tends to circle the same claim: “Foreign countries will pay.”

That line has always been more marketing than mechanics. At the border, the importer pays. Then the cost moves through the system like pressure through a pipe: a supplier might discount a bit, an importer might absorb a bit, a retailer might raise prices a bit, and the customer might pay more—or buy less. The split depends on how replaceable the product is and who has leverage. But the underlying structure is straightforward: tariffs behave like a tax wedge that ends up being shared domestically. That’s why the Federal Reserve Bank of New York has emphasized in recent tariff analysis that the burden falls largely on U.S. firms and consumers rather than being neatly exported abroad. (libertystreeteconomics.newyorkfed.org)

To make it more human: a tariff doesn’t feel like a policy. It feels like a phone call.

It’s the buyer calling the supplier to ask for a price cut.
It’s the supplier saying no, because their own costs are up.
It’s the importer calling the warehouse to slow releases because cash is tight.
It’s a retailer quietly shrinking promotions.
It’s an accountant trying to explain to leadership why the numbers broke even though “nothing changed” in sales.

And because this specific surcharge is time-limited, it creates a particular kind of stress: not just higher cost, but a sense of living on a cliff edge.

Section 122, by design, comes with a timer—150 days unless Congress extends it. That makes planning weird. Do you reroute suppliers for a policy that might end by late summer 2026? Do you eat costs hoping it expires? Do you raise prices and risk losing customers, only to look greedy if the surcharge disappears later? Do you stockpile inventory before the start date and tie up cash? Every option has a cost. Most companies pick the least bad one, and then pretend it was strategic.

So when people ask, “What’s next?” the honest answer is: two fights, at the same time.

One fight is in law and politics: whether Congress extends the surcharge, whether courts accept the Section 122 justification, and whether the administration shifts to other trade tools that take longer but last longer. The other fight is inside businesses: reclassifying products, renegotiating contracts, recalculating landed costs, and trying to keep customers calm while you change pricing that nobody wants to see change.

This is what “new tariffs” really means in daily life. It’s not just a policy posture. It’s a sudden, collective moment where thousands of ordinary people have to absorb a new percentage and decide who will carry it—quietly, quickly, and without the luxury of certainty.
#TrumpNewTariffs