Supreme Court Strikes Down Majority of Trump’s Tariffs

Why It Matters

The decision curtails unilateral tariff actions, reshaping U.S. trade strategy and reinforcing congressional authority over trade measures. It also creates immediate financial uncertainty for businesses that paid the now‑invalid duties.

Key Takeaways

• Court rules Trump exceeded authority under IEEPA
• 34% China tariffs and 10% baseline tariffs struck down
• Steel, aluminum duties under Section 232 remain intact
• Refunds for $200B duties still undecided
• Decision reshapes U.S. trade policy and executive limits

Pulse Analysis

The Supreme Court’s 6‑3 decision represents a watershed moment for U.S. trade law, clarifying the limits of presidential power under the International Emergency Economic Powers Act. Historically, IEEPA has been used to address national security threats, not to impose sweeping commercial tariffs. By emphasizing the Constitution’s delegation of tariff authority to Congress, the Court set a legal precedent that future presidents must seek explicit legislative backing before levying large‑scale duties. This ruling not only overturns the high‑profile 34% tariff on Chinese goods but also eliminates the 10% baseline tariffs that affected a broad swath of global suppliers, signaling a retreat from the aggressive trade stance that defined the Trump era.

Economically, the decision reverberates across supply chains that have adjusted to the higher cost structure imposed by the invalidated duties. Importers who paid the now‑void tariffs face uncertainty over potential refunds, with the Treasury estimating over $200 billion in collected fees. While the Court left the refund question unresolved, the prospect of large reimbursements could strain federal finances and disrupt cash flow for businesses that incorporated the tariffs into pricing strategies. At the same time, the retention of steel and aluminum duties under Section 232 preserves a protective layer for domestic manufacturers, maintaining a selective approach to trade barriers.

Looking ahead, the ruling is likely to prompt Congress to revisit the statutory framework governing trade remedies. Lawmakers may craft clearer delegations of authority or impose stricter oversight mechanisms to prevent future executive overreach. For multinational corporations, the decision underscores the importance of monitoring legal developments and diversifying sourcing strategies to mitigate policy volatility. Ultimately, the Court’s stance reinforces the balance of powers in trade policy, setting a benchmark for how future administrations will navigate the intersection of commerce, national security, and constitutional limits.

Supreme Court Strikes Down Majority of Trump’s Tariffs

By Kate Nishimura · February 20, 2026 10:40 am

The United States Supreme Court has upheld lower‑court rulings that President Donald Trump overstepped his authority in imposing “reciprocal” tariffs on dozens of America’s trading partners, invalidating a significant portion of the administration’s trade agenda.

On Friday morning, the nation’s highest court released its highly anticipated decision that the president’s use of the International Emergency Economic Powers Act (IEEPA) to levy double‑digit tariffs was unprecedented and unsupportable by law, with Chief Justice John Roberts delivering the court’s 6‑3 ruling. Conservative Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh dissented.

“The Framers did not vest any part of the taxing power in the Executive Branch,” Roberts wrote. “The Government thus concedes that the President enjoys no inherent authority to impose tariffs during peacetime.”

Joined by Justice Neil Gorsuch and Justice Amy Coney Barrett, Roberts concluded that,

“When Congress has delegated its tariff powers, it has done so in explicit terms and subject to strict limits. Against that backdrop of clear and limited delegations, the Government reads IEEPA to give the President power to unilaterally impose unbounded tariffs and change them at will. That view would represent a transformative expansion of the President’s authority over tariff policy.”

The justices wrote that “in IEEPA’s half‑century of existence, no President has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope.” The lack of historical precedent coupled with the breadth of authority now being claimed by Trump suggests that the tariffs extend beyond his legitimate reach.

The court’s ruling does not invalidate all of the administration’s tariffs. Targeted duties on steel and aluminum imports, imposed under Section 232 of the Trade Expansion Act of 1962, remain in place. However, the hefty tariffs on countries such as China—where a 34 percent tariff was applied—and the 10 percent baseline tariffs on the rest of the globe have been struck down. So too have the 25 percent tariffs imposed on non‑US‑Mexico‑Canada Agreement‑covered goods from Canada, China and Mexico for alleged smuggling of fentanyl precursors into the U.S. market.

The Supreme Court has not and will not issue a decision or guidance on the refunding of duties already paid by American importers. Members of the Trump administration have previously warned that repaying the money taken in through tariffs—more than $200 billion as of mid‑December—would be a catastrophic expense for the federal government and a strain on the U.S. Treasury.