--- title: "CITIC Securities: Are the U.S. equivalent tariffs illegal? Can \"alternatives\" be realized?" type: "News" locale: "zh-HK" url: "https://longbridge.com/zh-HK/news/276572918.md" description: "CITIC Securities released a research report stating that the U.S. Supreme Court ruled that Trump's tariffs based on the IEEPA are illegal, which may lead to global tariff expectation chaos. It is expected that the tariff levels imposed by the U.S. on China will decrease, especially during the low tariff window period, benefiting China's labor-intensive product exports. In the coming months, tariff negotiations between the U.S. and various economies will bring uncertainty, particularly in the game before Trump's possible visit to China" datetime: "2026-02-23T07:26:05.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/276572918.md) - [en](https://longbridge.com/en/news/276572918.md) - [zh-HK](https://longbridge.com/zh-HK/news/276572918.md) --- > 支持的語言: [简体中文](https://longbridge.com/zh-CN/news/276572918.md) | [English](https://longbridge.com/en/news/276572918.md) # CITIC Securities: Are the U.S. equivalent tariffs illegal? Can "alternatives" be realized? According to the Zhitong Finance APP, CITIC Securities released a research report stating that the U.S. Supreme Court ruled that Trump's tariffs based on the International Emergency Economic Powers Act (IEEPA) are illegal. The Trump administration's attempts to find alternatives may lead to a phase of confusion in global tariff expectations. For China, influenced by the stability of the "truce period" and Trump's appeal for a visit to China, it is expected that the overall U.S. tariffs on China may decrease, and at least during the low tariff window period, China's labor-intensive product exports may benefit relatively. Looking ahead to the coming months, tariff negotiations between the U.S. and various economies may bring many expected disturbances, particularly the game before Trump's potential visit to China. **The U.S. Supreme Court ruled that Trump's tariffs based on IEEPA are illegal, and the Trump administration's attempts to find alternatives may lead to a phase of confusion in global tariff expectations.** According to Reuters, on February 21, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose large-scale tariffs. The ruling stated that Congress typically makes clear and strict provisions when authorizing the executive branch to exercise tariff powers, and such authorization does not exist in the IEEPA; Chief Justice Roberts of the U.S. Supreme Court stated that the government's interpretation of the IEEPA as granting the president unilateral power to impose unlimited tariffs and adjust them at will exceeds the authorization of the law itself; in an opinion co-written with Justices Gorsuch and Barrett, Roberts explicitly pointed out that Trump's imposition of tariffs based on the IEEPA violated the "major questions doctrine." The "major questions doctrine" is a principle that the U.S. Supreme Court has increasingly emphasized in recent years. The core of this principle is that if the executive branch attempts to implement a policy with significant economic and political impact that is unprecedented in history, it must point to clear and unambiguous authorization from Congress, rather than relying on vague and broad interpretations of legal texts. Given that Trump has many alternative mechanisms to promote his tariff policy, the global financial markets reacted positively overall, but the excitement was limited. Since last year, as many trade agreements have gradually stabilized tariff expectations, there may be a return to phase confusion in the future. On the day the ruling was announced, the S&P 500 index in the U.S. rose by 0.69%, the dollar index fell by 0.09% under more complex interest rate cut expectations, and the 10Y U.S. Treasury yield rose by 0.33% under fiscal pressure; European stocks also reacted relatively positively. **For the global context, it is expected that the Trump administration will attempt various alternative tariff mechanisms and maintain stable execution of trade agreements. After the implementation of the 122 tariffs, the 301 investigation may be key. However, under regulatory constraints, congressional restrictions, and midterm election pressures, CITIC Securities believes that fully replicating the previous reciprocal tariff structure is somewhat difficult.** Specifically, Trump's potential alternative tariffs can be divided into three categories. First, the 122 tariffs are applicable to address international balance of payments imbalances, have a wide coverage, and can be implemented quickly, but the maximum tariff rate is 15%, the duration is only 150 days, and they cannot target specific economies. On February 20, Trump signed an executive order to impose a 10% 122 tariff on imported goods starting February 24 for a period of 150 days, but exempting industries already covered by the 232 tariffs and certain goods under the USMCA. On February 21, Trump announced that this tariff would be raised to 15%. According to the process, if the 150-day 122 tariff needs to be extended after it expires on July 24, it must be re-legislated by Congress (or require 60 votes in the Senate) CITIC Securities believes that a new alternative mechanism may need to be sought after the expiration. Secondly, the 301 tariffs apply to so-called unfair trade practices and can target specific economies or specific industries within those economies. CITIC Securities believes this may become a focus of attention moving forward. According to a report by Reuters, on February 20, the Office of the United States Trade Representative (USTR) announced the initiation of a new round of 301 investigations covering most major trading partners. CITIC Securities believes that if economies that have previously undergone 301 investigations (such as China, Brazil, Vietnam, India, the UK, and the EU) are targeted, implementation may take months, theoretically allowing for a connection with the expiration of the 122 tariffs; however, before the results of the 301 investigation are implemented, economies such as China, Canada, Mexico, and ASEAN, which previously faced higher IEEPA tariffs, may experience a low tariff window for several months. For other economies that have not undergone 301 investigations, the implementation of tariffs may take a year or longer. Thirdly, the 232 tariffs apply to trade practices that allegedly threaten national security, primarily targeting specific industries rather than countries, with a longer investigation period. Many of the 232 tariffs announced by the U.S. have been postponed, indicating significant resistance to implementation. Therefore, CITIC Securities expects that in this round of alternative tariff mechanisms, the 232 tariffs may not be a primary tool. Additionally, the 201 tariffs and 338 tariffs require investigations by the International Trade Commission (ITC), which also takes a long time, and CITIC Securities judges them to be non-priority options. In summary, it is expected that the Trump administration will attempt various alternative tariff mechanisms while maintaining stable execution of trade agreements. After the implementation of the 122 tariffs, the 301 investigation may be key. However, the aforementioned tariff tools are all constrained by Congress, and implementation will still take time. As the midterm elections approach and domestic pressure in the U.S. rises, CITIC Securities expects that Trump may find it somewhat difficult to fully replicate the previous reciprocal tariff pattern. Moving forward, it is recommended to closely monitor changes in the attitudes of the U.S. Congress and voter expectations. According to a YouGov poll as of January 21, 69% of American voters believe tariffs have raised prices, and 74% oppose further tariff increases. Previously, the House of Representatives passed a resolution opposing Trump's tariffs on Canada. **For China, influenced by the stability of the "truce period" and Trump's visit to China, CITIC Securities expects that the overall level of U.S. tariffs on China may decrease, and at least during the low tariff window, China's labor-intensive product exports may benefit relatively.** On one hand, China and the U.S. are still in a "truce period" of the tariff war. In light of the legal foundations of U.S. policies appearing to waver, if there is a significant increase through other alternative mechanisms in the short term, it may be seen as an escalation of the tariff war. On the other hand, according to a report by Reuters on February 20 citing White House sources, Trump plans to visit China from March 31 to April 2, and an escalation of the tariff war may not be beneficial to achieving the objectives of Trump's visit. Therefore, for China, CITIC Securities expects that the aforementioned alternative tariff mechanisms may emerge to some extent, but the overall tariff level may decrease, potentially falling below the level before the Supreme Court ruling takes effect. Assuming a 15% implementation of the 122 tariffs, the U.S. tariff rate on China would also decrease by about 5%, benefiting China's overall exports this year. Moreover, given the timeline of mechanisms such as the 301 investigation, CITIC Securities judges that the probability of the U.S. imposing a significant number of new tariffs on China before Trump's visit is low At least during the low tax rate window period, CITIC Securities believes that China's labor-intensive product exports may benefit relatively. China's labor-intensive products (toys, shoes, furniture, luggage, clothing, etc.) have a high proportion of overseas revenue and a significant exposure to exports to the U.S. The export of related goods will be greatly affected by Sino-U.S. trade frictions in 2025, and the recent reduction of tariffs on China will also lead to a short-term benefit for China's labor-intensive product exports. Regarding tariff refunds, we still need to wait for the lower court to make a ruling, and the entire process is expected to last several years. The Supreme Court has sent the Trump tariff case back to the U.S. Court of International Trade to handle the refund arrangements. The lower court may take several weeks to months to clarify the scope, procedures, and timeline for refunds. As for the refund recipients, the taxpayer subject to IEEPA tariffs is the importer, so refunds will be directly paid to the importers rather than consumers. In terms of the refund timeline, it can only be officially initiated after the lower court's ruling. Referring to the 1998 case "US v. US Shoe Corp," it took about five months from the court's ruling to initiate refunds, and the entire refund process lasted about three years. Given that the scale of this IEEPA tariff far exceeds historical cases, it is expected that the refund initiation time may be in mid-2026 to after 2027, and the overall execution cycle may last several years. Regarding the scale of refunds, according to data from U.S. Customs and Border Protection, as of December 14, 2025, the U.S. has collected a total of $133.5 billion in IEEPA tariffs. The Tax Foundation estimates that by February 20, 2026, related revenue may reach $160 billion. Historical experience shows that such refunds do not necessarily cover the entire amount collected. For example, in the US v. US Shoe Corp case, the Supreme Court ruled that the harbor maintenance tax does not apply to exports, ultimately refunding about $600 million, which accounted for about 60% of the total collected; in the 2006 U.S.-Canada softwood lumber tariff dispute, the U.S. negotiated to refund about $4 billion, accounting for about 80% of the total of $5 billion. Looking ahead to the coming months, tariff negotiations between the U.S. and various economies may bring many expected disturbances, particularly focusing on the potential game before Trump's visit to China. For China, if Trump's visit to China takes place, CITIC Securities judges that U.S. manufacturing investment may become a focal topic, but it is expected to require the U.S. to reduce investment barriers and improve policy stability as a driving premise; in addition, issues such as commodity procurement and trade balance, technology sanctions, and geopolitical hotspots may also become focal topics. However, the recent ruling by the U.S. Supreme Court will severely impact Trump's negotiating leverage, and attention should be paid to the ongoing game in February and March, as whether Trump chooses to adopt a strategy of "actively creating leverage" will be key to influencing market expectations. For the global economy, current statements from various economies generally indicate that the tariff pattern may continue. On one hand, the U.S. may consolidate existing agreements and strengthen institutional arrangements to lock in results; on the other hand, for economies that have not reached consensus or have political disagreements, the U.S. may still exert pressure through tariff substitution mechanisms, expanding investment reviews, export controls, or delaying market access through trade or non-trade means ![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/7f56c37cde0972ba662a96383588f0f7.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/2541aefc01fad57c56aad9bd032269fc.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) ## 相關資訊與研究 - [16:46 ET/C O R R E C T I O N -- National Association of Secondary School Principals/](https://longbridge.com/zh-HK/news/279991586.md) - [Belrise Industries Raises Rs. 100 Crore via Unlisted A1+ Rated Commercial Paper](https://longbridge.com/zh-HK/news/279989547.md) - [Oncolytics Biotech Shifts Corporate Domicile to British Columbia](https://longbridge.com/zh-HK/news/279992818.md) - [Armanino Foods of Distinction (OTCMKTS:AMNF) Releases Earnings Results, Beats Expectations By $0.04 EPS](https://longbridge.com/zh-HK/news/279988922.md) - [CICC Sticks to Their Buy Rating for Weimob (WEMXF)](https://longbridge.com/zh-HK/news/280010687.md)