Standard Chartered economists say the initial fiscal hit from the Supreme Court decision limiting use of the International Emergency Economic Powers Act - IEEPA - has been noticeable but not as large as some anticipated. In a note, economist Dan Pan projected tariff collections of roughly $25 billion for each of the first two months after the court ruling, covering March and April.
That monthly level represents a significant step down from the peak seen when the IEEPA-based tariffs were in full effect, yet it is still about 3.4 times the level recorded before what the note describes as Liberation Day. Revenue at the end of 2025, when tariffs were operating at peak intensity, exceeded four times 2024 levels; the current pace is below that end-2025 run-rate.
Using the current run-rate, Pan calculated an annualized revenue impact from the IEEPA decision near $60 billion. She framed that reduction as "meaningful but much smaller than widely expected," noting that IEEPA-derived tariffs made up more than half of U.S. tariff revenue. In aggregate terms, the decline corresponds to roughly 0.2% of U.S. GDP.
The administration has acted swiftly to blunt the fiscal impact. After the ruling, it implemented a 10% across-the-board tariff using Section 122 of trade law. Pan cautioned, however, that this is an interim measure: the Section 122 authority carries a 150-day limit that expires on 24 July 2026. She warned that there is no perfect substitute after that deadline, and that tariff receipts could decline further once the temporary authority lapses.
Another factor that could increase the fiscal drag is the pace of reimbursements for tariffs already collected. If reimbursements accelerate, they would further reduce net revenue in the near term.
Efforts to rebuild tariff authority through other legal channels face constraints. The administration has been broadening the remit of Section 232 tariffs, which historically cover steel, aluminum and copper, but those moves are encountering pushback from Canada and Mexico amid intensifying USMCA negotiations. Parallel Section 301 probes are under way as the administration seeks to widen their scope beyond traditional boundaries.
Pan flagged a deeper structural issue with shifting authorities. IEEPA and Section 122 tariffs were broadly applied and administratively straightforward. By contrast, Sections 232 and 301 are sector-specific and require detailed investigations and hearings. That complexity will likely make replacement tariffs more targeted by sector and country, a shift she says "will likely carry significant deadweight efficiency costs, but that looks to be the direction in which tariff policy is headed."
Summary
Standard Chartered's Dan Pan estimates tariff revenue fell to about $25 billion in March and April following the Supreme Court decision restricting IEEPA use. While collections remain several times above pre-ruling levels, temporary measures like a 10% Section 122 tariff and legal limits create uncertainty. The bank projects an annualized revenue shortfall around $60 billion, equal to roughly 0.2% of GDP, and warns that revenues could decline further after Section 122 authority expires on 24 July 2026.
Key points
- Tariff receipts were estimated at about $25 billion in both March and April, down from peak but ~3.4 times pre-Liberation Day levels.
- Standard Chartered annualizes the IEEPA-related revenue loss at approximately $60 billion, about 0.2% of U.S. GDP; Section 122 temporary tariffs mitigate but do not fully replace IEEPA authority.
- Policy shifts toward sector- and country-specific tariffs under Sections 232 and 301 may raise administrative complexity and efficiency costs; this affects manufacturing inputs like steel, aluminum and copper and broader trade relations with Canada and Mexico.
Risks and uncertainties
- Expiration of the 150-day Section 122 authority on 24 July 2026 could trigger further falls in tariff revenue, with implications for federal receipts and related fiscal planning - impacting fiscal and market forecasts.
- Acceleration of reimbursements for tariffs already collected would deepen near-term fiscal drag by returning previously recorded revenue to payers.
- Transitioning from broad uniform tariffs to sector- and country-specific measures may introduce deadweight efficiency costs and complicate administration, potentially affecting industries reliant on tariff-protected inputs.