The crypto market's relief rally lasted about an hour. Bitcoin spiked above $68,000 within minutes of the Supreme Court's 6-3 ruling striking down President Trump's IEEPA tariffs on February 20, 2026, then quietly retreated to the $67,000 level as traders digested what Goldman Sachs was telling institutional clients: the ruling will not end the trade war. Goldman's analysts warned that the administration can replace the invalidated duties with tariffs of up to 15% under Section 122 of the Trade Act of 1974, potentially "within days." Trump himself confirmed a "backup plan" minutes after calling the decision a "disgrace," and markets are now pricing in a second wave of trade barriers rather than the clean break that the initial pop suggested.
Goldman's Four-Statute Playbook for Tariff Round Two
Goldman Sachs outlined a menu of alternative legal authorities the Trump administration can deploy now that IEEPA is off the table. The options range from fast and blunt to slow and unlimited.
Section 122 of the Trade Act of 1974 is the quickest path. It allows the president to impose tariffs of up to 15% on imports to address balance-of-payments deficits, with no congressional approval required. The catch: these duties expire after 150 days. Goldman flagged this as the most likely first move because it requires no investigation, no waiting period, and no legislative negotiation. The 15% ceiling is lower than many of the IEEPA rates (which reached 25% on some categories), but it covers a broad base of goods and can be enacted almost immediately.
Section 301 of the Trade Act of 1974 is the heavier weapon. It allows tariffs at any rate for any duration, but only after the U.S. Trade Representative conducts a formal investigation into unfair trade practices by a specific country. The existing Section 301 tariffs on China, originally imposed in 2018-2019 and maintained through multiple administrations, survived the Supreme Court ruling because they rest on different legal authority. New Section 301 investigations against additional countries could take months but would face no rate ceiling.
Section 232 of the Trade Expansion Act of 1962, which covers national security tariffs, also survived the ruling intact. Steel and aluminum duties remain in place. The administration could expand Section 232 to additional product categories, though each expansion requires a Commerce Department investigation.
Section 338 of the Tariff Act of 1930 is the nuclear option, allowing the president to impose tariffs of up to 50% on countries that discriminate against U.S. commerce. It has never been invoked in its modern form, and Goldman did not flag it as a likely near-term path.
The bottom line from Goldman's note: the Supreme Court closed one door but left four others wide open.
Trump's "Disgrace" and the 90-Minute Market Reversal
President Trump responded to the ruling within minutes. "The Supreme Court's ruling on tariffs is a disgrace," he posted, adding that he has a "backup plan for tariffs." The statement, amplified by Cointelegraph and other outlets, drew nearly 100,000 views on the initial WatcherGuru post alone and generated over 5,000 combined likes across related coverage.
The market reaction told the story in two acts. Act one: Bitcoin surged roughly 2% to above $68,200 as the ruling hit the tape, with Ethereum jumping to $1,960, Solana rallying 4% to $84, and total crypto market capitalization rising to $2.3 trillion. Act two: within 90 minutes, Bitcoin had given back nearly all of those gains, settling around $67,000 as Goldman's analysis circulated and Trump's backup plan language registered.
The pattern mirrors what happened in January, when the Court delayed a procedural decision and Bitcoin surged $2,000 before retreating. The initial move trades on the headline; the reversion trades on the implications.
Why Section 122 Matters More Than Section 301 for Crypto
The distinction between these legal authorities is not academic for digital asset markets. Section 122's speed is the critical variable.
If the administration announces new 15% tariffs under Section 122 within the coming days, the macro narrative flips back to where it was before the ruling: inflationary pressure from import duties, a stronger case for the Federal Reserve to hold rates higher for longer, and a firmer U.S. dollar. All three of those conditions have historically been headwinds for risk assets including crypto. The DXY dollar index ticked up 0.1% on the day even as equities rallied, suggesting currency markets were already skeptical of the relief narrative.
A 15% blanket tariff under Section 122 would cover less ground than the IEEPA rates, which targeted specific countries at rates up to 25%. But it would reset the psychological baseline. Markets that had just priced in "tariffs are over" would need to reprice to "tariffs are back, just smaller." That whipsaw is where volatility lives.
The 150-day expiration on Section 122 tariffs adds another layer of uncertainty. If the administration uses those five months to launch Section 301 investigations against multiple trading partners, the temporary duties become a bridge to permanent ones at potentially higher rates. Goldman's note specifically flagged this sequence as the most likely scenario: Section 122 for immediate action, Section 301 for the long game.
What the $175 Billion Refund Question Means Now
The Supreme Court's decision puts more than $175 billion in collected IEEPA tariff revenue at risk of refunds to importers. The Penn Wharton Budget Model estimates that Customs and Border Protection collected roughly $133.5 billion through mid-December 2025 under IEEPA authority alone.
But Goldman's framework recontextualizes that number. If the administration replaces IEEPA tariffs with Section 122 duties within days, the net fiscal impact narrows. Old tariff revenue gets refunded over time (likely years, given the administrative backlog), while new tariff revenue starts flowing almost immediately. The federal budget hole that the ruling appeared to create may end up being smaller than the headline number suggests.
For stablecoin reserves and Treasury markets, this matters because the deficit trajectory affects bond issuance, which affects yields, which affects the entire rate environment that crypto trades against. A smaller-than-expected revenue gap means less Treasury supply pressure, which marginally supports bond prices and keeps long-term yields in check.
Broader Positioning for a Two-Phase Trade War
The crypto market is entering what looks like a two-phase trade war environment. Phase one, playing out now, is the uncertainty gap between the Supreme Court ruling and whatever the administration announces next. Phase two begins when new tariffs take effect under alternative legal authority.
For holders and active traders, the practical implications break down by time horizon. Short-term, volatility is the trade. The whipsaw from $68,200 down to $67,000 in 90 minutes demonstrates how sensitive crypto is to macro repricing events. Futures open interest and ETF flows have been declining for weeks, meaning thinner liquidity amplifies each move.
Medium-term, the Section 122 clock matters. A 150-day tariff window starting in late February would expire in late July, coinciding with what is traditionally a low-liquidity summer period for crypto. If the administration uses the expiration to pivot to permanent Section 301 tariffs, late Q3 could see another macro repricing event.
For crypto card users spending internationally, tariff policy affects the goods they buy, not directly their card transaction fees. But the second-order effects, through dollar strength, inflation expectations, and Fed rate decisions, ripple through every asset class that crypto correlates with.
FAQ
Did the Supreme Court ruling end all U.S. tariffs? No. The 6-3 ruling only struck down tariffs imposed under IEEPA authority. Duties on steel, aluminum, and automobiles under Section 232, as well as existing Section 301 tariffs on China, remain in effect. The ruling removes the broadest and highest-impact IEEPA levies but leaves several other trade barriers intact.
How quickly can Trump reimpose tariffs under Section 122? Goldman Sachs flagged Section 122 as deployable "within days" because it requires no investigation and no congressional approval. The ceiling is 15% and the maximum duration is 150 days, but it covers a broad range of imports.
Why did Bitcoin give back its gains after the ruling? The initial spike to $68,200 reflected relief trading on the headline that tariffs were struck down. The retreat to $67,000 followed as Goldman's analysis circulated and Trump confirmed a backup plan, signaling that trade barriers would be reimposed through alternative legal channels rather than eliminated.
What does this mean for the $175 billion in potential refunds? Importers who filed protests with Customs are best positioned to recover duties, but the administrative process will likely take years. If new tariffs are imposed quickly under Section 122, the net fiscal impact may be smaller than the headline suggests because fresh revenue begins replacing refunded amounts.
Overview
The Supreme Court's 6-3 ruling striking down IEEPA tariffs on February 20, 2026, initially appeared to be a clean win for risk assets, including crypto. Bitcoin spiked above $68,000 and the total crypto market cap rose to $2.3 trillion. But the rally evaporated within 90 minutes as Goldman Sachs told clients the administration can reimpose tariffs under Section 122 within days, Trump called the ruling a "disgrace" and confirmed a backup plan, and markets recalibrated from "tariffs are dead" to "tariffs are changing legal venue." The four alternative legal authorities, Section 122, Section 301, Section 232, and Section 338, give the administration multiple paths to maintain trade barriers without IEEPA. Bitcoin settled near $67,000, and the macro environment for crypto remains driven by tariff policy, dollar strength, and Fed rate expectations rather than a single court decision.
Recommended Reading
- The Supreme Court Just Killed Trump's Emergency Tariffs in a 6-3 Ruling
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Sources
- NBC News: Supreme Court strikes down Trump's tariffs
- Fortune: Supreme Court slaps down $175 billion worth of Trump tariffs
- The Block: Crypto prices rally as Supreme Court strikes down tariffs
- CoinDesk: Bitcoin pops then drops as Supreme Court strikes down tariffs
- NPR: 7 key things to know about Trump's tariffs after the Supreme Court decision
