U.S. Supreme Court Ruling on Trump Tariffs a Welcome Development for Canadian Businesses
•February 20, 2026
0
Why It Matters
By removing the IEEPA legal basis for many tariffs, the decision eases cost pressures for Canadian businesses, yet lingering duties and trade‑war tactics keep cross‑border uncertainty high.
Key Takeaways
- •Supreme Court invalidated IEEPA‑based Trump tariffs.
- •Canadian small businesses see potential cost relief.
- •Section 232 steel, aluminum tariffs remain unchanged.
- •US importers may receive retroactive duty rebates.
- •Trade uncertainty continues despite ruling.
Pulse Analysis
The Supreme Court’s decision marks a rare judicial check on executive trade actions, declaring that the International Emergency Economic Powers Act does not grant the president sweeping authority to impose tariffs without clear statutory backing. By overturning dozens of Trump‑era duties, the court not only reshapes the legal landscape but also signals to policymakers that overreach will face scrutiny. This development is especially salient for North‑American supply chains that have navigated a patchwork of tariffs since 2018, creating compliance complexities and higher costs for cross‑border trade.
For Canadian firms, particularly the 103,000 members of the Canadian Federation of Independent Business, the ruling offers a potential reprieve on non‑CUSMA compliant goods that have been disproportionately affected. While the decision does not automatically translate into lower retail prices, analysts suggest U.S. importers could receive retroactive rebates, providing a one‑time cash infusion that may improve balance sheets and enable modest price adjustments. Nonetheless, the persistence of Section 232 national‑security tariffs on steel, aluminum and other key inputs means Canadian manufacturers and retailers must still contend with elevated input costs and supply‑chain disruptions.
Looking ahead, the trade environment remains volatile. Unifor warns that the administration may pivot to alternative legal mechanisms, keeping the threat of new duties alive. Companies are therefore advised to diversify sourcing, strengthen compliance frameworks, and engage in proactive policy dialogue. Monitoring developments in the CUSMA review and anti‑dumping disputes, such as the soft‑wood lumber case, will be critical for businesses seeking to mitigate risk and capitalize on any future trade‑policy shifts.
U.S. Supreme Court ruling on Trump tariffs a welcome development for Canadian businesses
A U.S. Supreme Court ruling on Friday striking down many of U.S. President Donald Trump’s tariffs, including some of those levied against Canada, is drawing much attention and reaction throughout the country as organizations and businesses try to determine what this all means.
“Today’s Supreme Court ruling against much of the recent use of U.S. tariffs is a welcome development for small businesses on both sides of the Canada/U.S. border. But while this decision weakens the administration’s justification for tariffs, it is likely that other tariff and trade tools may be used to accomplish the same end,” said Dan Kelly, President, Canadian Federation of Independent Business (CFIB), Canada’s largest association of small and medium‑sized businesses with 103,000 members across every industry and region.
“Unfortunately, this ruling will not help address the uncertainty related to Canada/U.S. trade, nor the crippling tariffs on steel and aluminum that have been imposed by both countries.
Dan Kelly
“Still, there is the potential for relief for non‑CUSMA compliant goods. In a recent survey, 27 % of small businesses said they were harmed by tariffs on non‑CUSMA compliant goods, especially as many small firms struggle to comply with the confusing regime.
“While we should not expect the administration to end its efforts to impose tariffs, this decision may help sway other US political leaders against this harmful approach as both countries review the CUSMA agreement. While uncertainty continues, this is a good day for Canadian businesses.”
Bruce Winder, a retail analyst and author, said: “Today’s Supreme Court decision could result in US importers receiving rebates from the government on duties paid since the tariffs were put in play. This could result in a one‑time benefit to shareholders in the form of dividends or share buybacks.
“I don’t think that US retail prices will drop though as new higher prices have been normalized overall. Some US retailers may lower prices but that may be the exception.
Bruce Winder
“For Canadian retailers we may see some decrease of cost of goods if they buy from US distributors importing from tariffed countries. There may also be less pressure from direct‑to‑factory suppliers from subject countries who import into the U.S. as it relates to first costs retailers pay to import into Canada.
“This all assumes that the administration does not find an alternative way of keeping duties in play.”
The U.S. Supreme Court ruling to strike down tariffs imposed under the International Emergency Economic Powers Act (IEEPA) represents a legal rebuke of presidential overreach but does nothing to resolve the ongoing trade crisis threatening Canadian jobs and key industrial sectors, said Unifor.
Lana Payne
“This ruling exposes how abusive and legally flawed the IEEPA tariffs were, but Canadian workers should not mistake this for a victory,” said Unifor National President Lana Payne. “The risk to Canadian jobs remains severe, with the potential to even increase if Trump looks for new ways to impose tariffs or target Canadian jobs and investment.”
While the Court confirmed that IEEPA does not grant President Trump authority to impose sweeping ‘economic emergency’ tariffs, the ruling does not end the U.S. trade war against Canada with industry‑targeted Section 232 tariffs and other punishing measures still in place, explained Unifor, which is Canada’s largest union in the private sector, representing 320,000 workers in every major area of the economy.
Although the Supreme Court decision removes specific IEEPA tariffs, U.S. officials have already signalled their intent to reinstate or replace them using alternative legal authorities.
“The most damaging tariffs Canada faces were never IEEPA tariffs in the first place, because the Trump Administration chose to exempt goods that comply with our trade agreement,” said Payne. “However, so‑called ‘national security’ tariffs under Section 232, targeting auto, steel, aluminum, and wood products remain fully in force and could be expanded at any time.”
The decision also has no impact on long‑running anti‑dumping duties, including the softwood lumber dispute, which continues to punish Canadian workers and communities, it added.
Mario Toneguzzi
Based in Calgary, Mario has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Co‑Editor‑in‑Chief with Retail Insider in addition to working as a freelance writer and consultant in communications and media relations/training. Mario was named a RETHINK Retail Top Retail Expert in 2024.
0
Comments
Want to join the conversation?
Loading comments...