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State of U.S. Tariffs: SCOTUS Ruling Update [1]

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Date: 2026-02 

Table 1 presents two different measures of the effective tariff rate: pre-substitution (before consumers and businesses shift purchases in response to the tariffs) and post-substitution (after they shift).

Measured pre-substitution—assuming there are no shifts in the import shares of different countries and products—post-SCOTUS tariff policy represents the equivalent of a 6.7 percentage point increase in the US average effective tariff rate. That calculation assumes that, for example, the share of imports from China remains at 13%, where it was in 2024. A pre-substitution approach is a good measure of welfare, since it reflects the full cost faced by consumers before they start making difficult spending choices. This increase would bring the overall US average effective tariff rate to 9.1 percent, which is about one third of the peak rate experienced in 2025.

Post-substitution—after imports shift in response to the tariffs—the current suite of tariffs generates a 5.6 percentage point increase in the US average effective tariff rate, which brings the overall US effective tariff rate to about 8.0%. The timing of the transition from “pre” to “post” substitution is highly uncertain. Some shifts are likely to happen quickly—within days or weeks—while others may take longer.3

Had the President’s authority to enact tariffs via IEEPA been upheld, the pre-substitution effective tax rate would have been 16.9%, and the post-substitution rate would have been 14.3 percent.

Table 2 breaks down the changes in effective tariff rates through February 2026 by country and region. Panel A shows the changes without IEEPA, and Panel B shows the changes had SCOTUS held that IEEPA authorized the current set of tariff policies. IEEPA invalidation cut the effective rate on Chinese imports by almost two thirds while reducing the rate for Canada and Mexico by much less.

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[1] Url: https://budgetlab.yale.edu/research/state-us-tariffs-scotus-ruling-update

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