LINDSAY WHITEHURST
Fri, February 20, 2026
WASHINGTON (AP) — The Supreme Court struck down President Donald Trump's far-reaching global tariffs on Friday, handing him a significant loss on an issue crucial to his economic agenda.
The 6-3 decision centers on tariffs imposed under an emergency powers law, including the sweeping “reciprocal” tariffs he levied on nearly every other country.
It's the first major piece of Trump's broad agenda to come squarely before the nation's highest court, which he helped shape with the appointments of three conservative jurists in his first term.
The majority found that the Constitution “very clearly” gives Congress the power to impose taxes, which include tariffs. “The Framers did not vest any part of the taxing power in the Executive Branch,” Chief Justice John Roberts wrote.
Justices Samuel Alito, Clarence Thomas and Brett Kavanaugh dissented.
“The tariffs at issue here may or may not be wise policy. But as a matter of text, history, and precedent, they are clearly lawful,” Kavanaugh wrote in the dissent.
The majority did not address whether companies could get refunded for the billions they have collectively paid in tariffs. Many companies, including the big-box warehouse chain Costco, have already lined up for refunds in court, and Kavanaugh noted the process could be complicated.
“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. But that process is likely to be a ‘mess,’ as was acknowledged at oral argument,” he wrote.
The tariffs decision doesn’t stop Trump from imposing duties under other laws. While those have more limitations on the speed and severity of Trump’s actions, top administration officials have said they expect to keep the tariff framework in place under other authorities.
The Supreme Court ruling comes despite a series of short-term wins on the court’s emergency docket that have allowed Trump to push ahead with extraordinary flexes of executive power on issues ranging from high-profile firings to major federal funding cuts.
The Republican president has been vocal about the case, calling it one of the most important in U.S. history and saying a ruling against him would be an economic body blow to the country. But legal opposition crossed the political spectrum, including libertarian and pro-business groups that are typically aligned with the GOP. Polling has found tariffs aren't broadly popular with the public, amid wider voter concern about affordability.
The Constitution gives Congress the power to levy tariffs. But the Trump administration argued that a 1977 law allowing the president to regulate importation during emergencies also allows him to set tariffs. Other presidents have used the law dozens of times, often to impose sanctions, but Trump was the first president to invoke it for import taxes.
Karoline Leavitt says Truth Social posts are straight from Trump – week after staffer blamed for ‘Obama ape’ video
Trump set what he called "reciprocal" tariffs on most countries in April 2025 to address trade deficits that he declared a national emergency. Those came after he imposed duties on Canada, China and Mexico, ostensibly to address a drug trafficking emergency.
A series of lawsuits followed, including a case from a dozen largely Democratic-leaning states and others from small businesses selling everything from plumbing supplies to educational toys to women’s cycling apparel.
The challengers argued the emergency powers law doesn’t even mention tariffs and Trump's use of it fails several legal tests, including one that doomed then-President Joe Biden's $500 billion student loan forgiveness program.
The economic impact of Trump's tariffs has been estimated at some $3 trillion over the next decade, according to the Congressional Budget Office. The Treasury has collected more than $133 billion from the import taxes the president has imposed under the emergency powers law, federal data from December shows.
Fri, February 20, 2026
WASHINGTON (AP) — The Supreme Court struck down President Donald Trump's far-reaching global tariffs on Friday, handing him a significant loss on an issue crucial to his economic agenda.
The 6-3 decision centers on tariffs imposed under an emergency powers law, including the sweeping “reciprocal” tariffs he levied on nearly every other country.
It's the first major piece of Trump's broad agenda to come squarely before the nation's highest court, which he helped shape with the appointments of three conservative jurists in his first term.
The majority found that the Constitution “very clearly” gives Congress the power to impose taxes, which include tariffs. “The Framers did not vest any part of the taxing power in the Executive Branch,” Chief Justice John Roberts wrote.
Justices Samuel Alito, Clarence Thomas and Brett Kavanaugh dissented.
“The tariffs at issue here may or may not be wise policy. But as a matter of text, history, and precedent, they are clearly lawful,” Kavanaugh wrote in the dissent.
The majority did not address whether companies could get refunded for the billions they have collectively paid in tariffs. Many companies, including the big-box warehouse chain Costco, have already lined up for refunds in court, and Kavanaugh noted the process could be complicated.
“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. But that process is likely to be a ‘mess,’ as was acknowledged at oral argument,” he wrote.
The tariffs decision doesn’t stop Trump from imposing duties under other laws. While those have more limitations on the speed and severity of Trump’s actions, top administration officials have said they expect to keep the tariff framework in place under other authorities.
The Supreme Court ruling comes despite a series of short-term wins on the court’s emergency docket that have allowed Trump to push ahead with extraordinary flexes of executive power on issues ranging from high-profile firings to major federal funding cuts.
The Republican president has been vocal about the case, calling it one of the most important in U.S. history and saying a ruling against him would be an economic body blow to the country. But legal opposition crossed the political spectrum, including libertarian and pro-business groups that are typically aligned with the GOP. Polling has found tariffs aren't broadly popular with the public, amid wider voter concern about affordability.
The Constitution gives Congress the power to levy tariffs. But the Trump administration argued that a 1977 law allowing the president to regulate importation during emergencies also allows him to set tariffs. Other presidents have used the law dozens of times, often to impose sanctions, but Trump was the first president to invoke it for import taxes.
Karoline Leavitt says Truth Social posts are straight from Trump – week after staffer blamed for ‘Obama ape’ video
Trump set what he called "reciprocal" tariffs on most countries in April 2025 to address trade deficits that he declared a national emergency. Those came after he imposed duties on Canada, China and Mexico, ostensibly to address a drug trafficking emergency.
A series of lawsuits followed, including a case from a dozen largely Democratic-leaning states and others from small businesses selling everything from plumbing supplies to educational toys to women’s cycling apparel.
The challengers argued the emergency powers law doesn’t even mention tariffs and Trump's use of it fails several legal tests, including one that doomed then-President Joe Biden's $500 billion student loan forgiveness program.
The economic impact of Trump's tariffs has been estimated at some $3 trillion over the next decade, according to the Congressional Budget Office. The Treasury has collected more than $133 billion from the import taxes the president has imposed under the emergency powers law, federal data from December shows.
Supreme Court strikes down Trump’s blanket tariffs
Ben Werschkul, Washington Correspondent
Updated Fri, February 20, 2026
The Supreme Court struck down President Trump's tariffs, ruling that he did not have the authority to impose them under the International Emergency Economic Powers Act (IEEPA).
The US Supreme Court scrambled the trade landscape Friday with a decision striking down the centerpiece of President Trump’s second-term tariff program.
The 6-3 ruling in Learning Resources, Inc. v. Trump appears set to immediately halt a massive section of Trump’s tariffs announced last year on “Liberation Day” using a 1977 law called the International Emergency Economic Powers Act (IEEPA). The law gives the president the ability to declare an economic emergency and take action but doesn't specify tariffs as a remedy.
“IEEPA does not authorize the President to impose tariffs," read the decision by Chief Justice John Roberts.
It was a complex ruling with varied opinions and dissents stretching to 170 pages. Roberts captured the central legal issue, writing that Trump had asserted "the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope."
The text of the law, he added, “cannot bear such weight."
The Yale Budget Lab quickly offered an analysis that without these tariffs, the new overall average effective tariff rate will fall to 9.1% across the US economy, after a 16.9% rate before the ruling.
The majority decision does not appear to address the question of eligibility for tariff refunds, which is likely to lead to a complex legal or regulatory process for companies.
President Donald Trump gives a speech about the economy at the Coosa Steel Corporation factory in Rome, Georgia on Thursday. (SAUL LOEB / AFP via Getty Images)(SAUL LOEB via Getty Images)More
The ruling upholds two lower courts — including the US Court of International Trade — that previously found Trump did not have the authority to impose global tariffs under IEEPA.
Joining Roberts in the majority were Justices Neil Gorsuch and Amy Coney Barrett, who also wrote concurring opinions, alongside liberal justices Sonia Sotomayor, Ketanji Brown Jackson, and Elena Kagan.
Justices Samuel Alito, Clarence Thomas, and Brett Kavanaugh offered dissenting opinions after a conservative push to uphold Trump’s tariffs.
President Trump reacted by reportedly calling the decision a "disgrace" but the decision was immediately welcomed by an array of Trump's opponents and critics of his tariffs with Senate Democratic Leader Chuck Schumer saying that "this is a win for the wallets of every American consumer."
'An imposition of taxes on Americans'
The central question for the court was whether the law implicitly empowers the president to impose tariffs or whether Trump’s action was an illegal usurpation of “the power of the purse” that is the responsibility of Congress as laid out in the Constitution.
During oral arguments last November, key justices struck a skeptical tone on the administration's position, with Roberts asking perhaps the most pointed questions.
He posited that regardless of why a president makes his moves, "the vehicle is an imposition of taxes on Americans, and that has always been the core power of Congress."
Friday's ruling made similar points and was a striking blow for Trump and his team, who have long promised to replace the tariffs using other powers if they are struck down.
“Had Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly, as it consistently has in other tariff statutes,” Roberts wrote in the opinion.
President Donald Trump greets Chief Justice John Roberts before Trump delivered his address to a joint session of Congress in 2025. (Tom Williams/CQ-Roll Call, Inc via Getty Images)(Tom Williams via Getty Images)More
Trump and his team had seized on the law to declare a variety of economic emergencies over issues ranging from fentanyl to trade imbalances, and impose blanket tariffs in response.
Trump set the stage for the decision with weeks of comments playing up the consequences of the ruling. On Thursday, during a stop in Georgia, the president proclaimed that, "without tariffs, you know what, everybody would be bankrupt, the whole country would be bankrupt."
Open question on tariff refunds
Companies have been preparing for refunds since the arguments in November, even amid uncertainty about the result. At stake is more than $175 billion in revenue that has been collected under this law, according to the Penn-Wharton Budget Model in a new analysis for Reuters.
Costco (COST) made headlines when it became the biggest name to join the ranks of businesses pre-emptively suing the Trump administration to ensure future eligibility for refunds.
The lawsuit called Trump's IEEPA tariffs "unlawfully collected."
The US Chamber of Commerce on Friday immediately called for "swift refunds of the impermissible tariffs" in a statement, saying that getting money back "will be meaningful for the more than 200,000 small business importers in this country and will help support stronger economic growth this year."
Scott Lincicome of the CATO Institute likewise called for immediate refunds and said that a refund process could be done easily. However, "it appears more likely that more litigation and paperwork will be required," calling it "a particularly unfair burden for smaller importers."
The Supreme Court arguments featured a discussion of what possible refunds could entail.
"It seems to me like it could be a mess," Justice Amy Coney Barrett said.
Ben Werschkul is a Washington correspondent for Yahoo Finance.
No comments:
Post a Comment