Presumably both your iPad and iPhone have been updated to iPadOS/iOS 26.x.
There appears to be a bug in iPadOS/iOS 26 tethering over USB. While the iPad seeming detects the iPhone's USB hotspot (ethernet) connection, the iPad is not receiving a DHCP assigned IP Address:
Manual assignment of an IP Address, appropriate for the iPhone's hotspot (e.g. 19.0.0.2), corresponding subnet mask (255.255.255.0) and Router Address (192.0.0.1), also fails to establish a network connection over the USB link.
You would be best advised to submit a Bug Report, linking to this thread via Apple's Product Feedback portal. For iPad and iPadOS:
Feedback - iPad - Apple
Link to this thread: https://discussions.apple.com/thread/256165825
When submitting your Bug Report, please ensure that you include details of your iPad model and installed version of iPadOS within the body-text of your report along with details of the problem. Do not rely upon the pick-list - as this rarely includes the current version of iPadOS.
The link to this thread is - https://discussions.apple.com/thread/255213669
Every Bug Report counts. Unless reports are submitted (with adequate detail), Apple may not assign resources to investigate and correct the issue.
In addition [i.e., not as a substitute] to submitting a Bug Report, you might also consider seeking assistance directly from Apple Support. You can contact the Support Team using the Support link at top-right or bottom-left of this page; you can initiate and manage your support cases from Apple devices using the excellent Apple Support App. If not already installed, the App can be downloaded from the App Store:
https://apps.apple.com/app/apple-support/id1130498044
As a workaround, while wired tethering currently appears to be broken, tethering to the iPhone hotspot via WiFi works as expected.
[Edited by Moderator]
