Finance
US Supreme Court Strikes Down Trump's Global Tariffs
Published by Global Banking & Finance Review®
Posted on February 20, 2026
10 min readLast updated: April 3, 2026
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Published by Global Banking & Finance Review®
Posted on February 20, 2026
10 min readLast updated: April 3, 2026
Add as preferred source on GoogleThe Supreme Court invalidated Trump’s IEEPA-based global tariffs, limiting presidential power on trade. Officials plan alternatives like Section 232, while potential refunds and market ripples loom.
By Andrew Chung and John Kruzel
WASHINGTON, Feb 20 (Reuters) - The U.S. Supreme Court struck down Donald Trump's sweeping tariffs that he pursued under a law meant for use in national emergencies, handing the Republican president a stinging defeat in a landmark ruling on Friday with major implications for the global economy.
The 6-3 decision, authored by conservative Chief Justice John Roberts, provoked a furious reaction from Trump, who denounced the justices who ruled against him. Trump said "other alternatives" are available to him to pursue tariffs, and announced a 10% global tariff under a legal authority different from the one at issue in the case "over and above our normal tariffs already being charged."
The justices upheld a lower court's decision that Trump's use of this 1977 law exceeded his authority. The justices ruled that the law at issue - the International Emergency Economic Powers Act, or IEEPA - did not grant Trump the power he claimed to impose tariffs.
Trump, in comments at the White House after the ruling, condemned it as "terrible" and "totally defective."
"I'm ashamed of certain members of the court - absolutely ashamed - for not having the courage to do what's right for our country," Trump said.
Trump has leveraged tariffs - taxes on imported goods - as a key economic and foreign policy tool.
"Our task today is to decide only whether the power to "regulate ... importation," as granted to the president in IEEPA, embraces the power to impose tariffs. It does not," Roberts wrote in the ruling, quoting the statute's text that Trump claimed had justified his sweeping tariffs.
The U.S. Constitution grants Congress, not the president, the authority to issue taxes and tariffs.
Tariffs have been central to a global trade war that Trump initiated after he began his second term as president, one that has alienated trading partners, affected financial markets and caused global economic uncertainty.
Trump has called his tariffs vital for U.S. economic security, predicting that the country would be defenseless and ruined without them.
"Foreign countries that have been ripping us off for years are ecstatic," Trump said on Friday. "They're so happy, and they're dancing in the streets, but they won't be dancing for long that, I can assure you."
The Supreme Court, which has a 6-3 conservative majority, had allowed Trump's expansive exertion of presidential powers in other areas in a series of rulings issued on an emergency basis, and Friday's ruling represented the biggest setback it has dealt him since he returned to office in January 2025.
"It's my opinion that the court has been swayed by foreign interests and a political movement that is far smaller than people would ever think," Trump said.
Joining Roberts in the ruling were conservative Justices Neil Gorsuch and Amy Coney Barrett, both of whom Trump appointed during his first term in office, and the three liberal justices, Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson.
Roberts, citing a prior Supreme Court ruling, wrote that "the president must 'point to clear congressional authorization' to justify his extraordinary assertion of the power to impose tariffs," adding: "He cannot."
Democrats and various industry groups hailed the ruling. Many business groups expressed concern that the decision will lead to months of additional uncertainty as the administration pursues new tariffs through other legal authorities. The ruling did not address the issue of the government refunding tariffs that were struck down. Trump said the issue of refunds could take years to litigate.
Trading on Wall Street was volatile after the ruling as investors assessed hopes for easing inflation against uncertainty about Trump's next moves on tariffs.
THREE CONSERVATIVES DISSENT
Justice Brett Kavanaugh, in a dissent joined by fellow conservatives Clarence Thomas and Samuel Alito, wrote that the ruling did not necessarily foreclose Trump "from imposing most if not all of these same sorts of tariffs under other statutory authorities," adding that "the court's decision is not likely to greatly restrict presidential tariff authority going forward."
"In essence, the court today concludes that the president checked the wrong statutory box by relying on IEEPA rather than another statute to impose these tariffs," Kavanaugh wrote.
Kavanaugh was appointed by Trump during his first term as president. Trump said of Kavanaugh: "I'm so proud of him," while also praising Thomas and Alito.
Trump has imposed some additional tariffs under other laws that were not at issue in this ruling. Based on government data from October to mid-December, those represent about a third of the revenue from Trump-imposed tariffs.
Despite Trump declaring a national emergency over the $1.2 trillion U.S. goods trade deficit with the rest of the world to impose tariffs under IEEPA, that deficit grew again in 2025 to a record $1.24 trillion.
Trump turned to a statutory authority by invoking IEEPA to impose the tariffs on nearly every U.S. trading partner without the approval of Congress.
Part of the Supreme Court's majority declared that Trump's interpretation of the law would intrude on the powers of Congress and violate a legal principle called the "major questions" doctrine.
The conservative doctrine requires actions by the government's executive branch of "vast economic and political significance" to be clearly authorized by Congress. The court used the doctrine to stymie some of Democratic former President Joe Biden's key executive actions.
Roberts said that endorsing the administration's views would impermissibly expand presidential authority over tariff policy.
"It would replace the longstanding executive-legislative collaboration over trade policy with unchecked presidential policymaking," Roberts wrote.
It was "telling" that "no President has invoked the statute to impose any tariffs - let alone tariffs of this magnitude and scope," Roberts added.
The ruling came in a legal challenge by businesses affected by the tariffs and 12 U.S. states, most of them Democratic-governed.
The liberal justices did not join the part of the opinion involving the major questions doctrine.
Trump's tariffs were forecast to generate over the next decade trillions of dollars in revenue for the United States, which possesses the world's largest economy.
Trump's administration has not provided tariffs collection data since December 14. But Penn-Wharton Budget Model economists estimated on Friday that the amount collected in Trump's tariffs based on IEEPA stood at more than $175 billion.
"The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers," Kavanaugh said in his dissent. "But that process is likely to be a 'mess,' as was acknowledged at oral argument."
It was not immediately clear when IEEPA tariffs assessments and collections at ports of entry would halt, or how any refund process might work.
BOUNDARIES OF EXECUTIVE AUTHORITY
IEEPA lets a president regulate commerce in a national emergency. Trump became the first president to use IEEPA to impose tariffs, one of the many ways he has aggressively pushed the boundaries of executive authority since he returned to office in areas as varied as his crackdown on immigration, the firing of federal agency officials, domestic military deployments and military operations overseas.
Candace Laing, president and CEO of the Canadian Chamber of Commerce, said the decision was a legal ruling, not a reset of U.S. trade policy.
"Canada should prepare for new, blunter mechanisms to be used to reassert trade pressure, potentially with broader and more disruptive effects," Laing said.
After the Supreme Court heard arguments in the case in November, Trump said he would consider alternatives if it ruled against him on tariffs.
Treasury Secretary Scott Bessent and other administration officials have said the United States would invoke other legal justifications to retain as many of Trump's tariffs as possible. Among others, these include a statutory provision that permits tariffs on imported goods that threaten U.S. national security and another that allows retaliatory actions including tariffs against trading partners that the Office of the U.S. Trade Representative determines have used unfair trade practices against American exporters.
None of these alternatives offered the flexibility and blunt-force dynamics that IEEPA provided Trump, and may not be able to replicate the full scope of his tariffs in a timely fashion.
'PAY THE PIPER'
Democratic California Governor Gavin Newsom called on the Trump administration to issue tariff refund checks to U.S. families and businesses.
"Time to pay the piper, Donald," Newsom said. "These tariffs were nothing more than an illegal cash grab that drove up prices and hurt working families, so you could wreck longstanding alliances and extort them."
Senate Democratic Leader Chuck Schumer called the decision a "victory for the wallets of every American consumer."
Trump's ability to impose tariffs instantaneously on any trading partner's goods under the aegis of some form of declared national emergency raised his leverage over other countries. It brought world leaders scrambling to Washington to secure trade deals that often included pledges of billions of dollars in investments or other offers of enhanced market access for U.S. companies.
IEEPA historically had been used for imposing sanctions on enemies or freezing their assets, not to impose tariffs. The law does not specifically mention the word tariffs. Trump's Justice Department had argued that IEEPA allows tariffs by authorizing the president to "regulate" imports to address emergencies.
The Congressional Budget Office has estimated that if all current tariffs stay in place, including the IEEPA-based duties, they would generate about $300 billion annually over the next decade.
On April 2 on a date Trump labeled "Liberation Day," the president announced what he called "reciprocal" tariffs on goods imported from most U.S. trading partners, invoking IEEPA to address what he called a national emergency related to U.S. trade deficits, though the United States already had run trade deficits for decades.
In February and March of 2025, Trump invoked IEEPA to impose tariffs on China, Canada and Mexico, citing the trafficking of the often-abused painkiller fentanyl and illicit drugs into the United States as a national emergency.
EXTRACTING CONCESSIONS
But Trump's use of tariffs as a cudgel in U.S. foreign policy has succeeded in antagonizing numerous countries, including those long considered among the closest U.S. allies.
Trump has wielded his tariffs to extract concessions and renegotiate trade deals, and as a weapon to punish countries that draw his ire on non-trade political matters. These have ranged from Brazil's prosecution of former president Jair Bolsonaro, India's purchases of Russian oil that help fund Russia's war in Ukraine, and an anti-tariffs ad by Canada's Ontario province.
The Washington-based U.S. Court of Appeals for the Federal Circuit sided with five small businesses that import goods in one challenge, and the states of Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon and Vermont in another.
(Reporting by Andrew Chung; Additional reporting by David Lawder, Jarrett Renshaw, Bo Erickson, Andrea Shalal, David Morgan, Nichola Groom and David Shepardson; Editing by Will Dunham)
The Supreme Court struck down President Trump’s IEEPA-based global tariffs, a landmark decision reshaping U.S. trade policy and executive authority over tariffs.
The Court found IEEPA cannot be used to impose broad import taxes absent a qualifying emergency, reaffirming Congress’s constitutional authority over tariffs.
Many importers may seek refunds on IEEPA-based duties, though timing and scope will depend on subsequent guidance, litigation, and how agencies implement the ruling.
Officials cite Section 232 national-security tariffs and retaliation statutes targeting unfair practices. These tools are narrower and may take longer to deploy.
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