 |
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Supreme Court Tariff Ruling Developments: On February 20, the U.S. Supreme Court ruled against the Trump administration’s International Emergency Economic Powers Act (IEEPA) tariffs, determining them to be unlawful. The ruling does not impact Section 301 or Section 232 tariffs. |
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Following the ruling, President Trump issued an executive order that terminated all IEEPA tariffs: reciprocal tariffs, “fentanyl” tariffs, the additional 40% tariff on Brazil, and the previously eliminated 25% "oil" tariff on India. Orders that laid the groundwork for potential future IEEPA duties, including those targeting nations "doing business" with Iran and nations providing oil to Cuba, were also terminated. |
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On February 24 at 12:00 a.m. ET, U.S. Customs and Border Protection (CBP) officially stopped applying and collecting IEEPA tariffs. On February 24 at 12:01 a.m. ET, CBP began applying and collecting a 10% global tariff, which President Trump announced shortly after the Supreme Court ruling and implemented using Section 122. |
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Beyond announcing the new global tariff, President Trump indicated that he would initiate new Section 301 and Section 232 investigations that could lay the groundwork for new long-term duties. |
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Potential IEEPA Refunds: The Supreme Court ruling did not address refunds, and a decision on the matter may be tied up in litigation for months. |
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In the meantime, Flexport’s Tariff Refund Calculator is the simplest and fastest way to prepare for potential refunds. Instantly calculate total duties that are potentially eligible for refunds, break them down by duty category, and stay on top of important deadlines to quickly understand your potential return if CBP issues refunds. |
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Businesses can also prepare for potential refunds with Audit Your Customs Broker which Flexport launched today as part of our Winter Tech Release. This autonomous AI compliance agent primarily targets filing inaccuracies arising from executive orders, including tariff stacking, and the complex interdependencies between those measures. |
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President Trump Implements 10% Global Tariff: President Trump has leveraged Section 122 to implement a new 10% global tariff, effective February 24 at 12:01 a.m. ET. The tariff will expire on July 24, 2026. |
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While President Trump announced on Truth Social last weekend that he would raise the 10% global tariff rate to 15%, CBP has yet to issue formal notice confirming that change. However, on February 25, U.S. Trade Representative Jamieson Greer indicated that the Trump administration would issue a proclamation in “the coming days” to increase the global tariff to 15% “where appropriate.” |
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Additionally, in a February 23 Truth Social post, President Trump indicated that any country that “plays games with the Supreme Court decision … will be met with a much higher tariff than that they just recently agreed to,” referring to recent trade agreements containing IEEPA duty rates that have been invalidated by the Supreme Court ruling. |
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Product exclusions: A number of goods are exempt from the 10% global tariff, including certain critical minerals, energy and energy products, certain agricultural goods, USMCA-compliant Canadian and Mexican goods, goods that fall under CAFTA-DR, and more. |
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In-transit exclusion: The global tariff does not apply to goods loaded onto a vessel and in transit on their final mode of transit before 12:01 a.m. ET on February 24, 2026, and entered or withdrawn for consumption before 12:01 a.m. ET on February 28, 2026. |
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Section 232 exclusions: Goods currently or later subject to Section 232 tariffs are exempt from the global tariff. However, the global tariff does apply to the non-metal content of steel, aluminum, iron, and semi-finished and intensive copper products, as well as the non-metal content of their derivative products. |
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Foreign trade zones (FTZs): Goods admitted into U.S. FTZs on or after February 24 must be admitted under “privileged foreign status.” |
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The global tariff is eligible for duty drawback. |
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De Minimis Remains Suspended: Following Friday’s Supreme Court ruling, President Trump also issued an executive order that maintains the suspension of the de minimis exemption. |
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Effective February 24, postal entries are subject to the 10% global tariff until it expires, or until CBP establishes a new entry process for postal shipments—whichever comes first. This is a significant reduction from the IEEPA reciprocal duty rate or the $80-200/item rate that previously applied to postal entries. |
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Per a February 23 CSMS, CBP will maintain the same processes currently in place to file entry and collect duties on shipments that previously qualified for de minimis treatment, including those entering through international mail. |
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EU Freezes U.S. Trade Deal: Following last Friday’s U.S. Supreme Court ruling, the EU Parliament has again frozen approval of its U.S. trade deal. |
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Under the trade deal that the EU and the U.S. initially struck last summer, EU goods faced a minimum tariff of 15%: the higher of either the U.S. most-favored-nation (MFN) tariff rate or a 15% tariff composed of the MFN tariff and a reciprocal tariff. |
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With IEEPA tariffs now terminated and the new global tariff in effect, the total tariff rate is now higher in some instances: for many EU goods, the MFN combined with the 10% global tariff exceeds 15%. |
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Prior to last week’s Supreme Court ruling, the EU Parliament had been planning for a potential vote on its U.S. trade deal on February 24. |
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China Reacts to U.S. Supreme Court Ruling: China’s Ministry of Commerce stated that it would conduct a “full assessment” of the U.S. Supreme Court’s ruling against IEEPA tariffs. |
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Chinese trade officials also urged the U.S. to “cancel unilateral tariffs,” referring to President Trump’s recently implemented 10% global tariff. China is also in the process of deciding on potential adjustments to countermeasures against the U.S. |
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Prior to last Friday’s Supreme Court ruling, Chinese goods were subject to a 20% IEEPA duty rate. Under President Trump’s new global tariff, however, Chinese goods currently face lower duties. |
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Following the ruling, President Trump announced plans to open new Section 301 and 232 investigations that could lead to new long-term duties on China and other nations. China has been the primary target of Section 301 tariffs since President Trump’s first term, with most Chinese goods currently subject to 7-25% in Section 301 tariffs. |
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What’s Ahead for the Trump Administration’s Tariff Agenda: Following the end of IEEPA tariffs, businesses should expect increasingly complex tariff rules based on industry sector and product specifics. Flexport’s Tariff Simulator will only grow more valuable as the Trump administration’s trade policies evolve. Other legal mechanisms for imposing tariffs include: |
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Section 122: In implementing a 10% global tariff this week, President Trump became the first president to leverage Section 122 to impose tariffs. Section 122 permits the president to impose duties in response to a balance-of-payments emergency, with some restrictions: duties are capped at 15% and are only valid for 150 days, after which the president will need congressional approval to extend the duties. |
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Section 301: The president may impose tariffs in response to unreasonable or discriminatory foreign trade practices. Because the U.S. Trade Representative (USTR) must first conduct an investigation, it typically takes several months to introduce new Section 301 duties. |
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Section 232: The president may impose tariffs in response to national security threats. Current Section 232 duties include those on autos and auto parts, steel and aluminum, cabinets and vanities, and more. Because the Department of Commerce must first conduct an investigation, it typically takes several months to impose new Section 232 duties. |
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Section 338: The president may impose tariffs of up to 50% on imports from countries that discriminate against U.S. commerce. No president has ever used Section 338 to levy tariffs. |
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Check out our blog for a detailed guide to these legal mechanisms. |
TRANS-PACIFIC EASTBOUND (TPEB)
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Capacity is expected to exceed 80% starting in Week 11, quickly returning to pre-Lunar-New-Year levels. |
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While factories are reopening, demand is slowly recovering and has not returned to pre-Lunar-New-Year levels. This has resulted in oversupply and more open space in March, especially for the U.S. East Coast. |
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Carriers have announced a March 1 General Rate Increase (GRI) to bring spot rates closer to long-term fixed levels. |
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Carriers have pushed Peak Season Surcharges (PSSs) to the second half of March, and may even push them into April. |
FAR EAST WESTBOUND (FEWB)
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The market is currently navigating the traditional post-Lunar-New-Year slump. With Chinese factories closed or operating at minimal capacity, export demand has softened considerably. |
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Heavy blank sailings, currently in effect, are intended to prevent severe oversupply. |
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Carrier routing strategies remain varied. While some lines are testing limited Suez transits, major players like CMA CGM have recently shifted more Asia-Europe services back to the Cape of Good Hope. The longer transit times are balancing out excess vessel capacity. |
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Operations in Northern Europe: Despite the lull, network fluidity remains poor. Main yard utilization is as follows: |
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Rotterdam: ECT, 80%; Rotterdam World Gateway (RWG), 85%; Delta II, 45%; Maasvlakte II (APMT MVII), 95%. |
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Hamburg: HHLA Container Terminal Altenwerder (CTA), 85%; Eurogate Container Terminal (CTH), 90%. |
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Seasonal volume drops have pushed rates downward, with recent indices showing a decline of roughly 8–9% in Shanghai-to-Rotterdam spot rates. Extended Cape of Good Hope transits, combined with strict blank sailings, are successfully maintaining a rate floor that significantly exceeds historical averages. |
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Major carriers are aggressively pushing General Rate Increases (GRIs) for early March in an attempt to artificially lift the baseline rate, seeking to gain leverage in upcoming Q2 long-term contract negotiations. The lingering effects of this month’s blank sailings will also drive the short-term rate spike. |
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However, European consumer demand remains soft. Meanwhile, a wave of new ultra-large mega-ships entering the Asia-Europe lane is driving structural oversupply. |
TRANS-ATLANTIC WESTBOUND (TAWB)
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Capacity is nominally stable, with carriers rolling back some blank sailings. However, effective capacity is currently constrained by congestion and weather‑driven port stays in Northern Europe and parts of the Mediterranean. |
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Demand ex-Northern Europe and the West Mediterranean remains moderate, with no clear peak season patterns yet. Meanwhile, a lack of service reliability continues to drive elevated schedule risks and buffer stock needs. |
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Critical container and chassis shortages persist, particularly in Austria, Slovakia, Hungary, Southern and Eastern Germany, and Portugal. Expect inland delays of 2 to 4 days. |
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Spot rates range from stable to soft, currently within the ~$1,500–$2,000/FEU range from Northern Europe to the U.S. East Coast. |
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Overbookings related to weather, congestion, and blank sailings have tightened capacity. Peak Season Surcharges (PSSs) of $300-700 have been announced for early March. |
INDIAN SUBCONTINENT TO NORTH AMERICA
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To the U.S. East Coast: CMA CGM (INDAMEX) and Maersk (MECL) continue to proceed with Suez routings through the Red Sea. Base-port-to-base-port capacity remains available on routings through the Suez and via the Cape of Good Hope. |
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To the U.S. West Coast: Capacity is available on PS3, the sole direct service from India to the U.S. West Coast, and on broader services from the TPEB into the Pacific Southwest (PSW). |
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To the U.S. East Coast: The market does not anticipate a General Rate Increase (GRI) on March 1. Volumes are expected to increase in March, which may allow rates to recover. |
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To the U.S. West Coast: As with the East Coast, rate levels remain low. |
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Europe and North America Operations: |
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Currently, Trans-Atlantic capacity faces severe constraints due to extreme blizzard conditions in the Northeastern United States. |
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Extensive flight cancellations, which have exceeded 5,000 through the start of the week, have significantly reduced belly capacity. Major hubs—including New York (JFK and LGA), Newark (EWR), and Boston (BOS)—are experiencing terminal embargoes and near-total operational suspensions. |
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Non-emergency travel bans in New York and New Jersey have suspended Road Feeder Services (RFSs) and local trucking. Expect widespread delays and a backlog of cargo transiting these gateways until weather conditions permit a full resumption of services. |
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Market demand is currently undergoing a recovery phase as the workforce returns from the Lunar New Year holiday. While activity was soft in the first half of the week, volumes are expected to scale up as manufacturing operations normalize. |
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Pricing remains at post-holiday lows, but is projected to increase gradually in the coming days. |
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The region is experiencing a seasonal slowdown, with ample capacity available across most major lanes. Demand from both traditional and ecommerce sectors remains weak. |
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Carriers are currently maintaining competitive pricing to stimulate volume during this traditional discount period. |
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Demand and rates for Trans-Pacific lanes are stable. While typical month-end demand was not as robust as expected, the market remains balanced. |
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Market conditions are consistent with the previous week. Space remains relatively available, and rate levels for both Trans-Pacific and European lanes remain stable. |
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The market is undergoing a slow but steady recovery following the extended holiday period. Space is widely available, and rates remain negotiable as capacity conditions continue to stabilize. |
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Demand in Bangkok has remained stable. Capacity on both Trans-Pacific and European lanes is manageable. |
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To ensure space, shippers are encouraged to secure bookings 3 to 5 days in advance. |
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Rates to North American destinations are holding steady, with readily available capacity. |
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Far East Westbound conditions also remain stable; no significant shifts in capacity have been observed. |
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Following a period of soft demand due to recent holidays, capacity remains open on both U.S.- and Europe-bound routes. Rates are expected to remain stable through the end of the month. |
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The outlook remains steady, though capacity for Trans-Pacific routes continues to see occasional tightening. |
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Early pre-bookings are advised for shippers aiming to secure space on priority lanes. |
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Bangladesh and Pakistan: |
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Market demand is stable across both major sectors. While rates are not currently showing a decrease, we anticipate a rebound in cargo demand in early March. |
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Demand has seen a recent uptick as the market stabilizes post-holiday. Capacity is particularly open for European destinations, where overall rates have seen some recent reductions. |
(Source: Flexport)
Please reach out to your account representative for details on any impacts on your shipments.
Transit time increased from China to the U.S. West Coast, decreased from China to the U.S. East Coast, and remained flat from China to North Europe.
Week to February 23, 2026
Transit time increased slightly from 33.6 to 34 days from China to the U.S. West Coast; decreased from 55.7 to 53.6 days from China to the U.S. East Coast; and remained flat at 57.9 days from China to North Europe.
Stay in the loop—read past newsletters here. For more information, connect with one of our logistics experts here.
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