The US Supreme Court has struck down President Donald Trump’s sweeping global tariff regime, ruling that he exceeded his statutory authority by using a 1977 emergency-powers law to impose “reciprocal” tariffs on most foreign trading partners and additional targeted duties justified by the administration as a response to fentanyl trafficking.
In a 6–3 decision delivered on Friday, 20 February 2026, the court held that the International Emergency Economic Powers Act (IEEPA) does not grant a president the power to levy tariffs. The majority opinion was written by Chief Justice John Roberts, who said the Constitution assigns taxing powers to Congress and that a general grant of emergency economic authority cannot be read as permission for the executive to set tariff rates at will.
The judgment deals a significant legal setback to a central element of Trump’s economic agenda since his return to the White House. The tariffs had been presented by the administration as both a tool to address persistent US trade deficits and a lever against countries said to be linked to flows of fentanyl and other illegal drugs into the United States.
Emergency powers and the limits of “regulation”
The case turned on the scope of IEEPA, enacted in 1977 to give presidents tools to respond to declared national emergencies by restricting or regulating certain economic transactions. Trump’s lawyers argued that language allowing the president to “regulate” importation during an emergency permitted the imposition of tariff schedules across a broad range of goods and countries.
The court rejected that interpretation. In the Roberts opinion, the majority concluded that reading IEEPA to authorise tariffs would effectively allow the president to impose taxes without clear congressional approval. Several justices across ideological lines expressed scepticism during argument about the administration’s reliance on IEEPA for measures of such scale and economic significance.
US media reports indicated that the court’s reasoning also engaged with the “major questions” principle, under which courts require explicit congressional authorisation for executive actions with vast economic and political consequences. Accounts of the ruling suggested that not all members of the majority joined the same parts of the reasoning, reflecting differing judicial approaches even among justices who agreed on the outcome.
Three challenges, merged into one
The Supreme Court considered three separate challenges that were consolidated for oral argument.
One was brought by Learning Resources, a family-owned toy manufacturer employing roughly 500 people, which argued that the tariffs raised costs and disrupted supply chains, and that the president lacked legal authority to impose them under IEEPA.
A second challenge was filed by the Liberty Justice Center on behalf of a group of small businesses, including the wine distributor V.O.S. Selections. The group argued that IEEPA does not mention tariffs and cannot be construed as a delegation of Congress’s tariff-setting power.
The third challenge was brought by a coalition of 12 states — Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon and Vermont — which said the policy was unlawful and had introduced instability into the US economy and state-level procurement. Oregon officials had previously described their case as a test of the constitutional division of powers between Congress and the presidency.
What happens to tariff revenues
A central practical question now is what happens to the money already collected under the now-invalidated duties. Reporting on the decision indicated the court did not itself determine the mechanism for refunds, leaving further litigation likely in lower courts as importers seek repayment.
Estimates reported by major outlets differ, but they converge on the prospect of a large sum in dispute, measured in the hundreds of billions of dollars over the relevant period. The uncertainty is compounded by the fact that many importers have been paying duties while simultaneously contesting them in court, a common feature of trade litigation that can accelerate refund claims if a measure is ultimately struck down.
Political and trade implications
The ruling does not prevent the US from imposing tariffs through other statutory channels, including trade laws that require investigations, administrative findings, or congressionally defined criteria. But it narrows the executive’s ability to use emergency declarations as a fast route to broad tariff policy, particularly where the asserted emergency is defined in expansive terms such as a trade deficit.
Internationally, the decision may reduce near-term uncertainty for US trading partners that had faced rapidly changing tariff schedules. Domestically, it is expected to intensify debates in Congress over whether to provide clearer tariff authority to the executive, or to tighten existing delegations in response to the court’s reading of IEEPA.
For the White House, the immediate task will be to determine which tariffs can remain in place under other legal bases and how quickly replacement measures could be implemented without triggering further litigation. For US businesses, the focus shifts to the administrative and legal steps required to unwind a tariff programme that had become a defining feature of the administration’s approach to trade.
