The Business Dependent on Cross-Border Trade

By Bryant Andrus

Profile: The Business Dependent on Cross-Border Trade

TL;DR

• The US Supreme Court struck down the IEEPA-based tariffs on February 20 and collection stopped February 24, but a replacement 10% Section 122 tariff arrived the same week.
• Refunds of tariffs paid since March 2025 are not automatic; businesses should compile payment records now to preserve their claims.
• The July 1 CUSMA review is the bigger event, and every cross-border business should be modelling renewal, tighter rules of origin and services-chapter scenarios.

If your business depends on cross-border trade — whether you’re a Canadian manufacturer selling to US customers, a US company sourcing from Canadian suppliers, or an operation that runs production on both sides — February 20, 2026 was a date worth watching. The US Supreme Court ruled 6–3 that IEEPA does not authorize the President to impose tariffs. By the end of the month, a replacement 10% global tariff under Section 122 of the Trade Act of 1974 was already in place, limited by statute to 150 days and exempting USMCA-qualifying goods.

The ruling struck down the tariffs imposed under the International Emergency Economic Powers Act — the legal framework President Trump used to justify the 25% and later 35% tariffs on non-USMCA Canadian goods since March 2025. The Court found that IEEPA’s power to regulate importation does not include the power to impose tariffs. US Customs stopped collecting all IEEPA tariffs effective February 24; Section 232 tariffs on steel, aluminum, autos and other sectors remain in place.

The Refund Question

For businesses that paid IEEPA tariffs since March 2025, the court ruling opens a potential path to refunds. The refund process requires formal claims through US Customs and Border Protection — it is not automatic. Businesses should immediately begin compiling records of all tariff payments made on non-USMCA goods since March 4, 2025. The total, for some companies, will be significant. The Supreme Court’s ruling is final, but the refund mechanics may take months to resolve through CBP and the Court of International Trade, so preserving the refund claim now is essential.

The CUSMA Review Is the Real Stakes

The court ruling is significant, but the July 1 CUSMA review deadline is the event that will define your business’s cross-border trade environment for years to come. Both governments have completed their domestic consultations and signalled their priorities. The US has flagged rules of origin, dairy, critical minerals, and digital policy among its priorities. Canada is defending tariff-free access for CUSMA-compliant goods and protecting services and professional mobility provisions. The outcome will determine whether the past year of tariff disruption was a temporary shock or the beginning of a permanently higher-friction trade environment.

Every business with cross-border operations should now have a scenario model: what does the business look like if CUSMA is renewed substantially as-is? What does it look like if rules of origin tighten? What if the services or professional-mobility provisions are modified? The companies that will navigate the next phase best are those doing this analysis now, not after the July 1 deadline.

Ready to Talk?

Cross-border planning is time-sensitive and highly fact-specific. If any of the topics in this issue apply to your situation, we would welcome the conversation. State Bird Corp specializes in US–Canada cross-border tax, estate, and immigration planning for families and businesses on both sides of the border. Our team works with clients across the US and Canada — wherever your cross-border life takes you.

Sources

1. https://www.hklaw.com/en/insights/publications/2026/02/supreme-court-strikes-down-ieepa-tariffs
2. https://www.whitecase.com/insight-alert/trump-administration-imposes-10-section-122-tariff-plan-replace-ieepa-tariffs
3. https://www.blg.com/en/insights/2026/02/us-supreme-court-decision-on-emergency-tariffs-legal-and-commercial-implications
4. https://www.mccarthy.ca/en/insights/blogs/terms-trade/navigating-the-cusma-review-process-a-guide-for-canadian-stakeholders
5. https://www.mltaikins.com/insights/cusmas-joint-review-what-employers-need-to-know/
6. https://www.pwc.com/ca/en/services/tax/publications/tax-insights/preparing-cusma-2026-review.html
7. https://www.klgates.com/Summary-Supreme-Court-Decision-on-IEEPA-Tariffs-2-20-2026

Sincerely,

The State Bird Corp Team

State Bird Corp

P: (602) 641-5996  ·  E: Info@statebirdcorp.com  ·  W: statebirdcorp.com

To schedule your initial consultation, please contact us at info@statebirdcorp.com  so that we can help you create a plan as unique as your fingerprint.

---

State Bird Corp is a management and financial consulting firm.  State Bird Corp is not an accounting, legal or investment advisory firm. Cross-border planning is highly fact-specific. The strategies and topics described are general in nature, and readers should consult qualified specialists before taking any action. Any recommendation, inferences, or other guidance contained herein is meant for educational or general purposes and should not be relayed upon as specific advice for any person or business. Consult your legal, tax, and investment advisor for specific recommendation to your situation.