Monthly customs collections in the United States dipped by 4% in February 2026, settling at $27 billion. The decline marks a significant shift in the Trump administration’s trade revenue trajectory, primarily driven by a high-stakes legal battle that invalidated billions of dollars in emergency “reciprocal” duties.
The SCOTUS Effect: A $166 Billion Liability
The primary catalyst for the revenue drop was the February 20, 2026, decision by the U.S. Supreme Court in Learning Resources, Inc. v. Trump. The court ruled 6–3 that the administration’s use of the International Emergency Economic Powers Act (IEEPA) to levy broad import tariffs was unconstitutional.
- Revenue Impact: Prior to the ruling, IEEPA-based duties accounted for the lion’s share of new revenue. Their sudden suspension mid-month created an immediate vacuum in Treasury collections.
- The Refund Crisis: U.S. Customs and Border Protection (CBP) is now tasked with establishing a system to refund an estimated $166 billion collected from over 330,000 businesses since 2025.
- Rate Fluctuations: The weighted average applied tariff rate on all imports plummeted from 13.8% to 6.7% immediately following the ruling, before recovering slightly.
The Pivot to Section 122
To offset the losses from the IEEPA ruling, President Trump invoked Section 122 of the Trade Act of 1974 on February 24, 2026. This “temporary import surcharge” imposed a 10% global tariff aimed at addressing balance-of-payments concerns.
| Period | Revenue | Effective Tariff Rate | Authority |
| January 2026 | ~$28.2 Billion | 10.3% | IEEPA + Sec 232 |
| February 2026 | $27.0 Billion | ~9.1% (Variable) | Mixed / Transition |
| March 2026 (Est.) | TBD | 10.2% – 13.7% | Sec 122 + Sec 232 |
Behavioral Shifts and War Risks
Economists from The Budget Lab at Yale and J.P. Morgan suggest that the 4% revenue decline isn’t just a legal byproduct but also a result of importer fatigue.
- Substitution: Businesses are increasingly shifting sourcing to USMCA partners (Canada and Mexico), where roughly 85% of goods are now successfully claiming exemptions to avoid high duties.
- The 2026 War: The ongoing US-Iran conflict has disrupted maritime trade in the Middle East, leading to lower overall import volumes for certain energy-intensive commodities, which in turn reduces the total taxable base for tariffs.
Looking Ahead
While February saw a cooling in revenue, the administration’s pivot to Section 122—and threats to increase that rate to 15%—could see March collections rebound. However, the shadow of the $166 billion refund looms large over the federal budget, with dynamic modeling suggesting that the net fiscal gains from the 2025-2026 tariff waves may be significantly lower than initially projected.
