In a landmark ruling on Friday, February 20, 2026, the United States Supreme Court declared that President Donald Trump exceeded his authority in imposing sweeping global tariffs, striking down one of the most controversial elements of his economic policy. The 6-3 decision rejected Trump’s use of the International Emergency Economic Powers Act, or IEEPA, to unilaterally impose import duties, setting a precedent with significant implications for both domestic and international trade.
Chief Justice John Roberts delivered the Court’s principal opinion, saying that under the U.S. Constitution, Congress alone holds the power to levy taxes and tariffs. “Tariffs are very clearly a branch of the taxing power,” Roberts said, noting that the President must have explicit congressional authorization before imposing such duties. The Court concluded that IEEPA’s provision allowing the President to “regulate … importation” does not constitute such authorization. Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh dissented.
Background: Trump’s Use of Tariffs
Trump’s administration invoked IEEPA to address what he described as national emergencies, including trade deficits and the influx of illegal drugs into the U.S. Using this law, he imposed a 25 percent duty on imports from Canada and Mexico, a 10 percent duty on many Chinese goods, and later expanded tariffs to cover nearly all trading partners. Some Chinese imports ultimately faced effective tariffs of 145 percent.
Trump argued that the tariffs were essential for U.S. economic security. In November, he told reporters, “Without these tariffs, the rest of the world would laugh at us because they’ve used tariffs against us for years and took advantage of us.” The administration estimated that IEEPA-based tariffs had generated more than $175 billion in revenue by late 2025. Experts warned that the Supreme Court ruling would likely require refunds of these duties.
Legal Challenge and Court Ruling
The legal challenge was brought by small businesses affected by the tariffs and twelve U.S. states, mostly Democratic-governed. The cases were first heard in the United States Court of International Trade and the Federal Circuit, both of which largely sided with the plaintiffs. The Supreme Court consolidated these cases and affirmed that the President’s unilateral action overstepped constitutional limits.
The Court applied the “major questions” doctrine, noting that when the executive asserts powers of vast economic and political significance, it must identify clear congressional authorization. The majority found no evidence that Congress intended to delegate such sweeping tariff powers to the President.
Dissents Emphasize Executive Flexibility
Justice Brett Kavanaugh, joined by Justices Thomas and Alito, dissented. He argued that IEEPA’s text should allow the President broad authority to regulate imports, including imposing tariffs, during emergencies. “Limiting that authority risks undermining the Executive’s ability to respond swiftly to national crises,” Kavanaugh wrote. Justice Thomas also criticized the major questions doctrine, suggesting Congress may delegate substantial powers to the President without the strict clarity the majority demanded.
Global Reactions and Implications
The ruling has immediate international repercussions. Canadian Trade Minister Dominic LeBlanc called the tariffs “unjustified” but noted that sector-specific duties affecting steel, aluminum, and autos remain in force. LeBlanc said Canada would work with the U.S. to “create growth and opportunities on both sides of the border.”
The European Union said it is “analysing the ruling carefully” and is in close contact with U.S. authorities to ensure clarity on next steps. Economists warn that global markets, already unsettled by years of U.S.-China trade tensions, could see further volatility.
Domestically, Trump reacted angrily, calling the Supreme Court’s decision a “disgrace” during a private meeting with governors. Meanwhile, critics praised the ruling as a reaffirmation of the U.S. system of checks and balances. Indian Congress leader Jairam Ramesh commented, “Hats off to the US Supreme Court for striking down President Trump’s entire tariff strategy. The American system of checks and balances still seems to be working.”
Economic and Trade Consequences
Trump’s tariffs were central to his foreign policy, giving the U.S. leverage over countries including China, Canada, Mexico, India, and Brazil. Economists estimate that if all tariffs had remained in place, including IEEPA-based duties, they could have generated up to $300 billion annually. Now, businesses that faced higher import costs may see relief, while governments worldwide must reconsider ongoing trade negotiations and retaliatory measures.
The Supreme Court’s ruling limits the President’s ability to use emergency powers for broad economic measures and reinforces Congress’s constitutional role in trade. As Treasury Secretary Scott Bessent indicated, the administration may explore other statutory provisions to maintain some tariffs, but none provide the broad, rapid authority that IEEPA had granted.
