The New Trade Order: Executive Overreach, Congressional Pushback and What Comes Next

The U.S. trade landscape is entering a new phase. Following the Supreme Court’s rejection of the administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs, the White House has shifted toward narrower authorities, while Congress is pushing to reclaim a larger role in trade policy. The result is a trade regime increasingly shaped by the intersection of executive action, Congressional oversight, and bilateral negotiations.

The recent deterioration in U.S.-Canada trade relations offers a clear example of this shift. As the administration moves away from broad tariff authorities and toward more targeted measures, businesses will need to watch more than tariff rates. The legal authority behind those measures, Congressional action, and the status of negotiations with individual trading partners could all have significant implications for companies operating in international markets.

A New Tariff Toolkit

The Supreme Court’s February 2026 decision did not end the administration’s ability to pursue its trade agenda. Instead, it has pushed the White House toward a more targeted set of tools, including Sections 301, 232, and 338. The result is a more fragmented trade environment in which measures may vary by country, product, sector, and statutory authority.

The administration’s use of Section 122, which imposed a temporary 10 percent surcharge on a broad range of U.S. imports, expired on July 24 after reaching the statute’s 150-day limit. With that authority no longer available, the administration has increasingly relied on tools that can be directed at particular countries, products, or trade practices.

For example, Section 301 allows the U.S. Trade Representative (USTR) to investigate and respond to foreign practices considered unfair, unreasonable, or discriminatory and that burden U.S. commerce. The administration has used the authority to pursue issues ranging from labor practices and industrial policy to digital regulations, with investigations affecting both U.S. allies and other major trading partners.

Section 232 provides another pathway for restricting imports deemed to threaten U.S. national security. The administration has already used the authority for products including steel, aluminum, copper, and automobiles, while pursuing additional investigations into sectors such as semiconductors, pharmaceuticals, critical minerals, aircraft, and medical equipment.

Section 338 provides an additional mechanism for responding to foreign discrimination against U.S. commerce. Although it has historically been used far less frequently than Sections 301 and 232, the administration has demonstrated a willingness to explore alternative sources of tariff authority.

The Shift to Bilateral Trade Deals

The administration’s increasing reliance on bilateral negotiations represents another important change in the trade landscape. The emerging Agreement on Reciprocal Trade (ART) framework illustrates this approach. Rather than relying exclusively on multilateral or broad-based trade negotiations, the administration has pursued individual agreements with trading partners covering tariffs, market access, investment, supply chains, and other economic issues.

As of May 2026, the administration had signed ART agreements with Taiwan, Bangladesh, Indonesia, Malaysia, Argentina, Ecuador, Cambodia, Jordan, El Salvador, and Guatemala. The willingness of diverse trading partners to negotiate individually with the U.S. could encourage additional countries to pursue bilateral arrangements to preserve or improve access to the U.S. market.

For companies, these agreements could create opportunities to expand investment and market access while also producing a more complicated patchwork of country-specific trade commitments. Businesses operating across multiple markets may therefore need to monitor not only tariff rates, but also the investment, sourcing, and market-access commitments contained in individual agreements.

A Larger Role for Congress

At the same time, Congress is seeking to reassert its role in trade policy. The Constitution gives Congress primary authority over foreign trade, but lawmakers have delegated substantial authority to the executive branch over time, allowing presidents to play a dominant role in shaping trade policy. The administration’s aggressive use of tariffs has now prompted bipartisan interest in reconsidering that balance.

On July 22, Sen. Ron Wyden (D-OR) introduced S. 5081, the Congressional Trade Powers Reform Act, which would repeal Section 122 and require Congressional approval for future Section 301, 201, and 232 tariffs. The bill would also repeal Section 338 and suspend the 50 percent import tariff on countries deemed to be treating the U.S. unfairly. The legislation is unlikely to become law during the 119th Congress, but its introduction underscores the broader debate over who should have the authority to impose tariffs and under what conditions.

Sen. Wyden’s bill follows earlier bipartisan efforts to increase Congressional oversight. Sens. Maria Cantwell (D-WA) and Chuck Grassley (R-IA), for example, introduced the Trade Review Act of 2025, which would require the president to notify Congress within 48 hours of imposing or increasing a tariff and provide an explanation and analysis of its potential effects on U.S. businesses and consumers.

Congress is also driving an intersection of trade and national security. After several years of congressional deliberation, outbound investment restrictions were incorporated into the Fiscal Year 2026 (FY26) National Defense Authorization Act (NDAA) through the Comprehensive Outbound Investment National Security (COINS) Act. The measure expanded the list of countries of concern to include Cuba, Iran, North Korea, Russia, and Venezuela alongside China, Hong Kong, and Macau.

The broader significance is that Congress is increasingly debating not simply whether trade restrictions should be imposed, but who should impose them and what checks should apply.

Trade and National Security Are Becoming Increasingly Connected

The debate over tariffs is taking place within a broader shift in U.S. economic policy. Trade policy is increasingly intertwined with national security, supply-chain resilience, export controls, and outbound investment restrictions. For businesses, that means trade policy can no longer be viewed solely through the lens of tariff rates. Decisions about where companies source products, invest capital, establish supply chains, and conduct commercial activity may increasingly be affected by a broader set of economic security policies.

This trend is likely to continue regardless of which party controls Congress. While Republicans and Democrats may differ over the appropriate scope of presidential tariff authority, there is growing bipartisan interest in using trade and economic tools to address national security concerns and strategic vulnerabilities.

Impact of the 2026 Midterm Elections

The 2026 midterm elections could have significant implications for the future of U.S. trade policy. Control of Congress will influence whether efforts to constrain executive tariff authority gain legislative traction, while the composition of both chambers will shape the debate over how much discretion should remain with the President.

The more important question may not simply be which party controls Congress, but whether lawmakers can find bipartisan agreement on the appropriate balance between executive flexibility and Congressional oversight. Republican proposals have generally emphasized procedural checks and Congressional review, while Democratic proposals have more often sought to impose direct limitations on specific presidential authorities. Those differences could make comprehensive reform difficult, even if there is broader agreement that Congress should have a greater role.

For businesses, the outcome could affect the durability and predictability of the current tariff regime. Greater Congressional involvement could provide additional procedural safeguards and reduce the likelihood of abrupt executive action, while legislative restrictions could limit the administration’s ability to respond quickly to perceived trade or national security concerns.

What Businesses Should Watch in Washington

For companies operating across borders, the biggest challenge in the emerging trade environment will be navigating its increasing complexity. The key question is no longer simply what tariff rate applies to a particular product. Companies will increasingly need to understand why a measure was imposed, what authority supports it, whether Congress is seeking to change that authority, and how negotiations with the relevant trading partner could alter the outcome.

Businesses should closely monitor several developments, including the statutory basis for new trade actions, sector-specific investigations, and bilateral trade negotiations. They should also pay attention to congressional efforts to reclaim trade authority, the growing intersection of trade and national security, and how trade policy could change following the 2026 midterm elections.

Conclusion

The post-IEEPA trade environment is likely to be defined by three forces: greater reliance on narrower statutory authorities, increased Congressional scrutiny, and continued use of trade policy as a tool of economic and national security policy.

The Supreme Court’s rejection of IEEPA as a basis for broad tariffs did not eliminate executive trade action. Instead, it has encouraged the administration to rely on alternative authorities, each with its own requirements and limitations. At the same time, Congress is seeking to reassert its role, creating another potential source of policy change.

For companies operating across borders, the result will be a more complex trade environment. Tariff exposure will depend not only on where a product is made or where a company operates, but also on the authority underlying a particular measure, the status of negotiations with the relevant trading partner, and the evolving relationship between Congress and the executive branch.

The central question for the months ahead is therefore not whether the U.S. will continue to pursue an aggressive trade policy, but how that policy will be shaped and whether the next phase of U.S. trade policy will be driven primarily by the White House, Congress, the courts, or some combination of all three.