Tariffs don’t just change numbers on a customs entry—they influence sourcing decisions, lead times, inventory strategy, and the total landed cost of every board, cable, and enclosure moving through your program.
On February 20, 2026, the U.S. Supreme Court reshaped the tariff landscape by ruling that the International Emergency Economic Powers Act (IEEPA) does not give the President authority to impose broad tariffs. That decision ended a major set of duties and triggered a new, time-limited tariff regime.
Below is a clear, electronics-focused summary of what changed, what didn’t, and what it means for outsourced assembly services, electronic contract manufacturing, and long-term OEM partnerships.
What happened: The Supreme Court limits tariff authority under IEEPA
On February 20, 2026, the Supreme Court ruled in Learning Resources, Inc. v. Trump that IEEPA does not authorize tariffs, striking down the sweeping tariffs that had been imposed under that statute. This decision invalidated both the so-called “reciprocal” tariffs and “fentanyl” tariffs that impacted multiple trading partners, including China, Canada, and Mexico.
You can review the core summary of the decision and its immediate trade-policy impact in: Supreme Court strikes down tariffs, and The Supreme Court Clipped Trump’s Tariff Powers—and Opened New Trade Battle Fronts. The case itself is outlined here: Learning Resources, Inc. v. Trump.
Why the ruling is a big deal for manufacturers
Beyond the near-term duty impact, the decision reinforces that Congress holds constitutional taxing power, limiting the executive branch’s ability to use emergency authorities as an all-purpose tariff tool. For manufacturers, this can affect the likelihood, speed, and legal durability of future tariff actions. See
additional context in: Brookings Experts on the Supreme Court’s Tariff Decision and The Supreme Court Clipped Trump’s Tariff Powers—and Opened New Trade Battle Fronts.
What changed immediately: IEEPA tariffs stop, but refunds remain uncertain
After the ruling, IEEPA-based tariffs—estimated to have generated over $200 billion in 2025—are no longer collected. The administration moved to revoke the IEEPA tariff actions and to modify tariff schedules accordingly, but refunds are not automatic and remain an open issue for importers.
For importer-focused details on what ends and what remains unresolved, see: Supreme Court Strikes Down IEEPA Tariffs: What Importers Need to Know and Supreme Court Strikes Down IEEPA Tariffs: What Importers Need to Know. A high-level overview of the $200B estimate is included in: Supreme Court strikes down
tariffs.
What this means for electronics programs right now
Even before any refund question is settled, the cessation of IEEPA duties can change:
- Landed cost assumptions for components and finished goods that were previously hit by IEEPA tariffs
- Pricing conversations between OEMs and their electronics manufacturing partners
- Budget accuracy for new product introductions and sustaining builds
If you’re using electronic contract manufacturing, this is a timely moment to re-validate cost models—but do it carefully, because a new tariff mechanism is already in play.
What replaces them (for now): Section 122 global tariff and the 150-day window
Following the end of the IEEPA tariffs, a new tariff action was implemented under Section 122 for a defined period. As described in: Trade Policy Shifts: IEEPA Tariffs End, Section 122 Begins and Supreme Court Strikes Down IEEPA Tariffs—What Now?, this approach:
- Imposes a global tariff starting February 24, 2026
- Runs for 150 days, through July 24, 2026, unless extended
- Includes exemptions that may cover certain electronics and other categories
Multiple sources describe the Section 122 tariff as 10%, and also note that the maximum rate was raised to 15% shortly after implementation. See: The Supreme Court Clipped Trump’s Tariff Powers—and Opened New Trade Battle Fronts, Trade Policy Shifts: IEEPA Tariffs End, Section 122 Begins, and Supreme Court Strikes Down IEEPA Tariffs: What Importers Need to Know.
Exemptions that could matter for electronics supply chains
Section 122 exemptions are especially important for electronics because a single finished product often includes many imported inputs. Reported exemption categories include certain electronics, USMCA-qualifying goods, and exclusions for goods already subject to other tariff regimes (like Sections 301 or 232), among others.
For exemption-level discussion relevant to electronics, see: Supreme Court Strikes Down IEEPA Tariffs—What Now? and The Supreme Court Clipped Trump’s Tariff Powers—and Opened New Trade Battle Fronts.
Important: Public reporting and client alerts note that “certain electronics” are excluded, but the precise product coverage often depends on tariff schedule details and HTS classification. Confirm applicability at the part-number and HTS level.
Specific component/product impact: How to apply “certain electronics” to real BOMs
Electronics teams typically don’t buy “electronics” as a single category—they buy a bill of materials (BOM). The practical question is whether the specific HTS classifications used for your imported items fall inside or outside Section 122 coverage, and whether Section 301 or Section 232 applies instead.
While the sources above reference “certain electronics,” they do not provide a definitive, universal list inside this article. In practice, electronics programs often evaluate exposure by grouping high-spend line items into component families and confirming the classification and tariff treatment for each.
Common BOM groups to review first include:
- Semiconductors (ICs, microcontrollers, memory)
- Passive components (resistors, capacitors, inductors)
- Printed circuit boards (PCBs) and bare board fabrication inputs
- Cable assemblies and wire harnesses
- Power products (AC/DC supplies, DC/DC converters, battery chargers)
- Electromechanical parts (connectors, switches, relays)
- Enclosures and metalwork (including imported subassemblies)
Two practical notes for OEMs and EMS teams:
1. Classification and exclusions are often item-specific. Two similar parts can classify differently based on construction, function, or end use, which changes tariff treatment.
2. Your duty outcome may be driven by “overlap.” If a good is already subject to Section 301 or 232, Section 122 may not apply (as noted in reporting and client alerts). See: Supreme Court Strikes Down IEEPA Tariffs—What Now? and Trade Policy Shifts: IEEPA Tariffs End, Section 122 Begins.
If you’re building an internal playbook for navigating US tariffs for OEMs, start with your top-spend imported items and validate HTS codes and tariff applicability before renegotiating pricing or changing suppliers.
What didn’t change: Section 301 and 232 tariffs remain
The Supreme Court ruling focused on IEEPA authority. It did not remove tariffs imposed under other legal authorities.
In particular, Section 301 and Section 232 tariffs remain in effect, which is critical for electronics programs that source specific commodities, components, or subassemblies that fall under those lists. See: Trade Policy Shifts: IEEPA Tariffs End, Section 122 Begins.
Why this matters for electronics supply chains, EMS, and OEM partnerships
Electronics supply chains are sensitive to tariff changes because they are:
- Multi-tiered: cost impact can appear at the component, subassembly, and finished goods levels
- Schedule-driven: any customs hold, classification change, or supplier switch can disrupt builds
- Quality-dependent: changing sources quickly can introduce process variation and risk
1. Cost volatility can shift sourcing decisions
Analysis indicates that effective tariff rates dropped significantly after the IEEPA duties were vacated, including a notable reduction for Chinese imports. See: State of U.S. Tariffs: SCOTUS Ruling Update.
For OEMs and procurement teams, this can reopen questions like:
- Should we keep sourcing certain inputs abroad, or shift them?
- Should we adjust purchase timing during the 150-day Section 122 window?
- Are our supplier quotes built on outdated assumptions?
2. Outsourced assembly services need clearer “who pays which duties” terms
In outsourced assembly services, tariff impact depends on the commercial structure:
- Is the OEM importing and consigning components?
- Is the contract manufacturer importing on the customer’s behalf?
- Is the assembly partner buying materials and selling finished goods delivered domestically?
Each model changes duty exposure, documentation, and audit risk. With the move from IEEPA tariffs to Section 122 (and the continued presence of 301/232), confirm that your statements of work and purchasing terms clearly define:
- Importer of record
- HTS classification ownership/approval process
- Documentation responsibilities
- How duty changes flow into pricing
Long-term strategic implications: Planning beyond the 150-day window
The Section 122 timeframe is short. The more durable change is the shift in how tariffs may be introduced and defended going forward.
For 3–5 year planning, electronics manufacturers and OEMs typically benefit from treating tariffs as one part of broader supply chain risk mitigation strategies, alongside quality, lead time, and geopolitical exposure.
Key implications to consider:
- Tariff actions may become less “instant,” but not less disruptive. If future tariffs rely more heavily on congressional action or other statutory authorities, timing and predictability may change—but volatility can remain.
- Reshoring vs. offshoring decisions should be modeled with scenarios, not a single assumption. Programs that rely on one duty rate (or one country) are more exposed when the rules shift.
- Geopolitical risk assessment becomes a sourcing input, not a quarterly check. Supplier location, upstream material origins, and cross-border logistics routes can change a program’s risk profile even when unit prices look competitive.
For electronics teams building a roadmap, the goal is not to “guess the next tariff.” It’s to build a supply chain that can absorb change without compromising product reliability or delivery performance.
How to respond: Practical steps for electronic contract manufacturing programs
We recommend the following practical actions for electronics programs.
1. Re-check HTS classifications for high-spend items
The difference between “exempt” and “not exempt” often comes down to classification accuracy. Align procurement, compliance, and your manufacturing partner on:
- Your top 20–50 imported SKUs by value
- Whether any items are already covered under Section 301 or 232
- Whether Section 122 exclusions apply
2. Update landed-cost models for the next two horizons
If your team is asking how to calculate landed cost for electronics, make sure the model includes more than the base duty rate—include broker fees, freight, insurance, inventory carrying cost, and the impact of lead-time variability on buffer stock.
Build models for:
- Now through July 24, 2026 (the Section 122 window) as described in: Trade Policy Shifts: IEEPA Tariffs End, Section 122 Begins
- Post-July 2026, where extension or new actions remain uncertain, as discussed in: The Supreme Court Clipped Trump’s Tariff Powers—and Opened New Trade Battle Fronts
This helps prevent surprises in quoting, reorder prints, and customer pricing
3. Treat refunds as a separate track (and don’t budget them prematurely)
While IEEPA duties are no longer collected, sources note no automatic refunds and an unresolved path forward. See: Supreme Court Strikes Down IEEPA Tariffs: What Importers Need to Know and Supreme Court Strikes Down IEEPA Tariffs: What Importers Need to Know.
For electronics businesses, the operational guidance is straightforward:
- Preserve import records and entry documentation
- Track which SKUs and entries were affected
- Coordinate with your customs broker and legal counsel
- Avoid counting refunds as program savings until actually received
4. Protect manufacturing continuity while adjusting the supply chain
Tariffs can create pressure to change suppliers. In electronics, the highest-risk moves are rushed ones—substituting components, changing PCB fabs, or switching subassembly sources without adequate validation.
When changes are necessary, keep them controlled:
- qualify alternates with appropriate inspection and test coverage
- confirm material equivalency and revision compatibility
- maintain traceability and documentation discipline
This is where consistent execution matters most: cost decisions should not compromise the reliability your end customers expect.
How PTG Assembly Services supports OEMs through tariff-driven change
Tariff shifts are ultimately a planning and execution challenge. The strongest OEM partnerships are built on transparency, documentation, and stable processes—even when the external environment is unstable.
At PTG Assembly Services, we support customers by:
- Providing structured cost and sourcing reviews to compare scenarios under shifting duty conditions,
including the Section 122 window and ongoing Section 301/232 exposure - Helping align importer-of-record responsibilities, documentation workflows, and change control so
tariff and sourcing decisions do not create avoidable quality or audit risk - Supporting disciplined transitions when supplier changes are required—maintaining inspection plans,
traceability, and revision control to protect product performance
If your team is reassessing sourcing, imported inputs, or your manufacturing model (consigned vs. turnkey), the right partner can help you make changes in a controlled way—without introducing new risks.
Conclusion: Plan for volatility, prioritize reliable manufacturing
The Supreme Court’s February 2026 decision eliminated IEEPA-based tariffs, but it did not eliminate tariff
volatility. With Section 122 now in play for a limited window—and Sections 301 and 232 still active—electronics supply chains should assume continued change.
The practical path forward is to treat this as a structured planning exercise: validate classifications, model landed costs, keep quality controls tight, and rely on strong manufacturing relationships that can adapt without sacrificing execution.
The end of IEEPA authority is not an end to uncertainty—it is a test of operational readiness. Is your manufacturing partnership structured to turn this volatility into a competitive advantage?
FAQ
What did the Supreme Court actually decide?
The Court held that IEEPA does not authorize the President to impose tariffs, invalidating the IEEPAbased “reciprocal” and “fentanyl” tariffs. See: Supreme Court strikes down tariffs and the case page: Learning Resources, Inc. v. Trump.
Are importers automatically getting refunds for IEEPA tariffs already paid?
No. Multiple summaries note that refunds are not automatic and remain unresolved, meaning importers should plan carefully and maintain documentation. See: Supreme Court Strikes Down IEEPA Tariffs: What Importers Need to Know and Supreme Court Strikes Down IEEPA Tariffs: What Importers Need to Know.
What is the Section 122 tariff and how long does it last?
Section 122 is a tariff action described as a global tariff effective February 24, 2026 for 150 days through July 24, 2026, unless extended. See: Trade Policy Shifts: IEEPA Tariffs End, Section 122 Begins and The Supreme Court Clipped Trump’s Tariff Powers—and Opened New Trade Battle Fronts.
Are all electronics exempt from Section 122?
No. Reporting and client alerts indicate “certain electronics” may be excluded, but the scope depends on tariff schedule details and product classification. Confirm applicability by HTS code and part-level review. See: Supreme Court Strikes Down IEEPA Tariffs—What Now?.
Do Section 301 and 232 tariffs still apply?
Yes. Those tariffs were not affected by the IEEPA decision and remain an important part of trade compliance and pricing. See: Trade Policy Shifts: IEEPA Tariffs End, Section 122 Begins.