President Trump’s State of Union Defies U.S. Supreme Courts Tariffs Rule
25 February 2026 President Trump’s State of Union address communicated his plans to continue with tariffs even though the Supreme Court has ruled 6 to 3 against the President’s use of the IEEPA law to impose tariffs on our trading partners. The majority opinion is silent on the issue of refunds. The minority opinion does note that refunds would be difficult to implement. This ruling does not impact tariffs imposed on China under 301 authority, nor does it impact tariffs imposed under 232 authority.
While it looks like the Administration will litigate, it is anticipated that refunds will be required. While there are already hundreds of individual lawsuits in the CIT (Court of International Trade) as well as a class action lawsuit, seeking refunds, this process could take quite a while to weave its way through the court system especially if the Administration chooses to appeal the inevitable decision from the CIT to require that the “illegally” collected funds be returned.
This also presents a group of challenges. Specifically, the mechanics of refunds are complicated, especially as imported materials found their way through the distribution chain. The entity that paid the tariff will receive the refund and then decide if the funds should be held as a “windfall profit” or passed down to their customers. This decision, as well as how to do it would be totally at their discretion. Careful record keeping is essential as the amount of money involved is enormous.
There is also a significant future pricing issue going forward under. Many of the international suppliers have internalized some of these costs. U.S. purchasers will likely want to continue paying based on the existing pricing while the exporters will be looking to take back their margins.
What’s Next
Clearly, the Administration is expecting countries that have signed “Reciprocity Agreements,” will abide by what they signed. In many cases, this includes agreements to invest significant sums of money in the U.S. and some of the agreements carry tariff rates that are above 15%. It will be interesting to watch how countries react to this new reality.
The Administration has announced that they will immediately begin accelerated efforts to finalize section 301 tariffs on a yet to defined number of countries. They also triggered section 122 authority that allows for tariffs of up to 15% for a period of 150 days to compensate for balance of payments issues. The goal is to have these evaluations completed before the expiration of the 150-day section 122 clock. While this may be possible, it will be an enormous challenge to task the Department of Commerce and USTR to perform this function on multiple countries at the same time. 301 authority gives the President enormous leverage over tariffs.
The President achieved 301 authorities over China in his first administration. The “tranches” that are important to agrochemicals, includes tranche 3, currently tariffed at a rate of 25%, tranche 4a, currently tariffed at a rate of 7.5% and tranche 4b that has not yet been implemented. If he chooses, it would be very simple to increase the tariffs in tranche 3 to 30%, tranche 4a to 15% and implement tranche 4b at a rate up to 15%. Tranche 4b includes products such as glyphosate, glufosinate, chlorothalonil, and oxyfluorfen, as well as several others.
As you will recall, the issue that allowed the president to hold off on the higher rates was the agreement by China to the “Phase one” trade agreement. China did not nearly meet the requirements of this agreement.
The loose of IEEPA tariff powers will likely enhance the chance that the Administration will be pushing China for a “phase 2 agreement” to cover the various issues that were prioritized under IEEPA.
India presents a special challenge. While it would be expected that they will complete a 301 study on India, at the same time it is clear that India and the U.S. are working towards a formal trade agreement. Such an agreement would head off instituting significant levies against India.
The imposition of tariffs under section 122 that was signed on Friday night at a rate of 10%, appears to include the same exceptions list that was part of the reciprocity regime. The President has announced the intent to raise this rate to 15%. Using this section of the law is causing some challenges since the rate needs to be in addition to the normal base rate of tariff. The issue is that in many instances, the U.S. made agreements that cap the rate (EU, Japan, Korea and several others) at 15%. Now, since many chemicals have a tariff rate of 6.5%, the rate for these countries will be 16.5% which obviously exceeds the previous agreement of 15%. Raising the rate to15% compounds the problem since the new rate would then be 21.5%. While the Administration clearly is intent on raising the rate to 15%, they need to find a “work around” so that the U.S. does not in effect break these previously signed agreements. There is a lot riding on those agreements, especially for countries that also made commitments to invest billions of dollars in the U.S. as part of the deal.
That being the case, below please find a revision of the tariff chart we have used in the past comparing tariff rates on individual products between China and India. Please consult your own tariff and trade experts before relying on any information in this table.
| HTS Number | China Base Tariff |
China 301 Surtax |
China 122 Tariff |
China Total | Product | India 122 Tariff |
India Total |
|---|---|---|---|---|---|---|---|
| Key Herbicides | |||||||
| 2918.99.20.10 | 6.5% | 7.5% | 10% | 24% | 2,4 D | 10% | 16.5% |
| 2924.29.47.00 | 6.5% | 25% | 10% | 41.5% | Acetochlor | 10% | 16.5% |
| 2933.69.60.21 | 3.5% | 7.5% | 0% | 11% | Atrazine | 0% | 3.5% |
| 2926.90.23.00 | 6.5% | 7.5% | 10% | 24% | Bromoxynil | 10% | 16.5% |
| 2926.90.25.00 | 6.5% | 25% | 10% | 41.5% | Bromoxynil Octan | 10% | 16.5% |
| 3808.93.15.00 | 6.5% | 25% | 10% | 41.5% | Bromoxynil Formulated | 10% | 16.5% |
| 2930.90.10.00 | 6.5% | 25% | 10% | 41.5% | Clethodim | 10% | 16.5% |
| 2934.99.15.00 | 6.5% | 0% | 0% | 6.5% | Clomazone | 0% | 6.5% |
| 2918.99.20.50 | 6.5% | 7.5% | 10% | 24% | Dicamba | 10% | 16.5% |
| 2931.59.00.80 | 3.7% | 0% | 0% | 3.7% | Ethephon | 0% | 3.7% |
| 2935.90.75.00 | 6.5% | 0% | 0% | 6.5% | Flucarbazone | 0% | 6.5% |
| 2933.39.25.00 | 6.5% | 0% | 0% | 6.5% | Fluroxypyr | 0% | 6.5% |
| 2931.49.00.10 | 3.7% | 0% | 0% | 3.7% | Glufosinate | 0% | 3.7% |
| 2931.49.00.20 | 3.7% | 0% | 0% | 3.7% | Glyphosate | 0% | 3.7% |
| 2918.99.20.15 | 6.5% | 7.5% | 10% | 24% | MCPA | 10% | 16.5% |
| 2930.90.10.00 | 6.5% | 25% | 10% | 41.5% | Mesotrione | 10% | 16.5% |
| 2933.69.60.21 | 3.5% | 7.5% | 0% | 11% | Metribuzin | 0% | 3.5% |
| 2933.39.23.00 | 6.5% | 0% | 0% | 6.5% | Paraquat | 0% | 6.5% |
| 2921.49.50.00 | 6.5% | 25% | 0% | 31.5% | Pendimethalin | 0% | 6.5% |
| 2924.29.47.00 | 6.5% | 25% | 10% | 41.5% | Propanil | 10% | 16.5% |
| 3808.93.15.00 | 6.5% | 25% | 10% | 41.5% | Propanil Formulated | 10% | 16.5% |
| 2934.99.90.01 | 6.5% | 0% | 0% | 6.5% | Pyroxasulfone | 0% | 6.5% |
| 2924.29.47.00 | 6.5% | 25% | 10% | 41.5% | S-Moc | 10% | 16.5% |
| 2935.90.75.00 | 6.5% | 0% | 0% | 6.5% | Sulfentrazone | 0% | 6.5% |
| 2921.43.15.00 | 6.5% | 25% | 10% | 41.5% | Trifluralin | 10% | 16.5% |
| most formulated | 6.5% | 25% | 10% | 41.5% | Aromatic | 10% | 16.5% |
| most formulated | 5% | 25% | 10% | 40% | Non-Aromatic | 10% | 15% |
| HTS Number | China Base Tariff |
China 301 Surtax |
China 122 Tariff |
China Total | Product | India 122 Tariff |
India Total |
|---|---|---|---|---|---|---|---|
| Key Insecticides | |||||||
| 2932.20.50.50 | Free – K list | 0% | 0% | 0% | Abamectin | 0% | 0% |
| 2930.90.43.95 | 6.5% | 25% | 10% | 41.5% | Acephate | 10% | 16.5% |
| 2933.39.27.00 | 6.5% | 0% | 0% | 6.5% | Acetamiprid | 0% | 6.5% |
| 2928.00.25.00 | 6.5% | 25% | 0% | 31.5% | Bifenazate | 0% | 6.5% |
| 2916.20.50.00 | 3.7% | 25% | 0% | 28.7% | Bifenthrin | 0% | 3.7% |
| 2924.29.28.00 | 0% | 25% | 0% | 25% | Diflubenzuron | 0% | 0% |
| 2933.39.27.00 | 6.5% | 0% | 0% | 6.5% | Imidacloprid | 0% | 6.5% |
| 2926.90.16.00 | free | 25% | 10% | 40% | Lambda Cyhalothrin | 10% | 15% |
| 3808.91.25.00 | 6.5% | 25% | 10% | 41.5% | Lambda Cy Formulated | 10% | 16.5% |
| 2924.21.45.00 | 6.5% | 25% | 10% | 41.5% | Novaluron | 10% | 16.5% |
| 2930.90.43.95 | 6.5% | 25% | 10% | 41.5% | Oxamyl | 10% | 16.5% |
| 2916.20.50.00 | Free – K list | 25% | 0% | 25% | Permethrin | 0% | 0% |
| 2920.90.10.00 | 6.5% | 25% | 10% | 41.5% | Propargite | 10% | 16.5% |
| most formulated | 6.5% | 25% | 10% | 41.5% | Aromatic | 10% | 16.5% |
| most formulated | 5% | 25% | 10% | 40% | Non-Aromatic | 10% | 15% |
| HTS Number | China Base Tariff |
China 301 Surtax |
China 122 Tariff |
China Total | Product | India 122 Tariff |
India Total |
|---|---|---|---|---|---|---|---|
| Key Fungicides | |||||||
| 2933.59.15.00 | 6.5% | 0% | 0% | 6.5% | Azoxystrobin * | 0% | 6.5% |
| 2930.90.43.95 | 6.5% | 25% | 10% | 41.5% | Captan | 10% | 16.5% |
| 2926.90.21.00 | 6.5% | 0% | 10% | 16.5% | Chlorothalonil | 10% | 16.5% |
| 2833.25.00.00 | 1.4% | 25% | 0% | 26.4% | Copper Sulfate | 0% | 1.4% |
| 2933.99.22.00 | 6.5% | 0% | 0% | 6.5% | Ipconazole | 0% | 6.5% |
| 3808.92.24.00 | 0% | 25% | 10% | 35% | Mancozeb | 10% | 15% |
| 3808.92.50.80 | 5% | 25% | 10% | 40% | Micronized Sulfur | 10% | 15% |
| 2934.99.12.00 | 6.5% | 0% | 0% | 6.5% | Propiconazole | 0% | 6.5% |
| 2933.99.22.00 | 6.5% | 0% | 0% | 6.5% | Tebuconazole | 0% | 6.5% |
| most formulated | 6.5% | 25% | 10% | 41.5% | Aromatic | 10% | 16.5% |
| most formulated | 5% | 25% | 10% | 40% | Non-Aromatic | 10% | 15% |
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