Trump's tariffs: struck down by the US Supreme Court

Friday 20 February 2026

On 20 February 2026 the United States Supreme Court struck down the centrepiece of President Trump’s sweeping tariffs programme — not because tariffs are alien to American statecraft, but because this particular set of tariffs was imposed on a claim of emergency authority so broad that it would, in practice, let the President tax the world at will. 

For readers outside the United States the significance is immediate. Tariffs are not merely a line-item on an import form — they are a form of economic coercion, a diplomatic signal and a domestic political instrument all at once. When Washington can impose them quickly and universally, she can unilaterally redraw the commercial map. When Washington cannot, the world’s trading partners — allies and rivals alike — gain a measure of predictability. 

What the Court actually decided — and why

The case turned on the President’s reliance on the International Emergency Economic Powers Act of 1977 (IEEPA). In recent years the Trump administration had treated IEEPA as a master-key: declare an “emergency”, then impose “reciprocal” or global tariffs as an all-purpose remedy for trade deficits and supply-chain dependence. The Court rejected that approach.

Three strands of reasoning mattered.

First, constitutional structure. The majority emphasised that tariffs are, in substance, taxes — and the United States Constitution assigns the power to “lay and collect” duties to Congress, not the Executive. The President does not acquire that power simply by invoking foreign policy or national security language. 

Second, statutory interpretation. IEEPA allows a President, after declaring a national emergency, to regulate certain economic transactions. The Court concluded that this is not the same thing as authorising the Executive to create a sweeping new tariff schedule across the global economy. If Congress had intended to permit a President to levy tariffs of any magnitude, on any goods, from any country, it would have said so clearly. 

Third, the Court’s modern doctrine of limits on executive improvisation. Reporting on the judgment indicates that the majority treated the President’s programme as the sort of “major question” that requires explicit congressional authorisation — a signal that, even where statutory language is broad, it cannot be used as a blank cheque for decisions with vast economic and political consequences. 

The refunds problem — who sues, for how much, and what they must prove

The practical aftershock is money. Enormous sums were collected at the border under the struck-down tariffs — figures reported in the press range into the hundreds of billions of dollars. 

But “unlawful tariff” does not automatically equal “automatic refund”.

In the United States system importers typically pay duties to Customs and Border Protection and then seek administrative review, or litigate in the specialist Court of International Trade, depending on the posture of the case. That machinery is slow, technical and full of deadlines — and it distinguishes between duties already “liquidated” (finalised) and those still open to challenge. The Supreme Court, on the reporting available today, did not lay down a single, clean remedy for refunds — leaving room for years of secondary litigation about procedure, limitation periods, class actions and whether particular claimants preserved their rights. 

The dissent appears to have flagged precisely this — that courts can strike down a programme, yet still face a messy second act about the fiscal consequences and who ultimately bears them. 

For foreign firms the point is not merely whether American importers recover money — it is whether global supply chains must now price in prolonged legal uncertainty, with the possibility that some duties will be returned and others will not, depending on paperwork rather than principle.

What the President can try next — and why it is not the same

The decision does not end American tariffs. It ends one President’s attempt to impose them at global scale through emergency law.

If President Trump wants to reconstitute tariff leverage, he has other legal tools — but each comes with constraining features that cut against the idea of instant, universal pressure.

Section 232 of the Trade Expansion Act of 1962 allows tariffs on national security grounds. It is powerful — and historically has been used for metals — but it is usually sector-focused, anchored in an investigation and a narrative of security risk rather than a general dislike of trade deficits. It is also politically combustible — because “national security” tariffs against allies tend to be read abroad as a pretext, even when dressed in legal form. 

Section 301 of the Trade Act of 1974 is another pathway — aimed at unfair foreign trade practices and enforced through the US Trade Representative. It is slower and more evidential — it tends to be country-specific, and it requires investigative groundwork that makes it ill-suited to a rapid, globe-spanning tariff blitz. 

There are further instruments — safeguards (often described as Section 201), anti-dumping and countervailing duties, and even obscure authorities that have little modern precedent. Yet these mechanisms are generally narrower, more bureaucratic, and more exposed to court challenge if used as camouflage for a policy that is, in truth, universal and revenue-raising. The post-IEEPA landscape therefore pushes any President back towards targeted tariff warfare — rather than the attempted imposition of a single, sweeping tariff constitution. 

Geopolitical consequences — a shift from tariff shock to tariff process

Internationally the Court’s decision will be read less as an economic event than as a political one.

Allies will welcome the reduction in “tariff shock” risk. If global tariffs can no longer be conjured from an emergency declaration, Europe, Japan, South Korea, Canada and others can plan procurement, pricing and industrial policy with slightly more confidence. 

Rivals, particularly China, will interpret the decision in two ways at once. On the one hand it limits the President’s ability to impose instant, maximal pressure. On the other hand it may push Washington towards more legally durable, targeted measures — the kind that can be sustained across administrations because they look like process rather than impulse.

There is also a more subtle diplomatic effect. When tariffs are wielded as personal instruments of the President, they blur into the theatre of negotiation — threats, pauses, exemptions, retaliations. When tariffs must be routed through statute, investigation and administrative record, they become slower — but also, in a sense, more credible, because they are harder to reverse overnight. That change does not necessarily make the world calmer. It makes it more procedural — which is not the same thing.

What this says about rule of law in the United States

For the rule of law, the decision cuts in two directions.

The encouraging reading is straightforward: the Supreme Court has reaffirmed separation of powers at a moment when American politics often appears to dissolve constitutional boundaries into raw partisan will. A President, even one elected on a mandate to remake the economy, cannot simply discover a taxation power in an emergency statute and then use it to impose a global levy. 

The more anxious reading is that the United States required litigation to reassert what the Constitution’s architecture already implies — and that, even now, the aftermath will be a long dispute over refunds, compliance and alternative legal routes to reach a similar destination. A system can be governed by law and still be destabilised by constant tests of the outer perimeter of executive power.

For “John of Arkansas” — the distant observer who does not live inside American constitutional mythology — the takeaway is practical. The United States has shown that her courts can still check a President on an issue that touches money, jobs and national pride. Yet she has also shown how easily an administration can attempt to turn emergency legislation into a permanent instrument of economic governance — and how disruptive that experiment can be for the rest of the world, even when the courts eventually say no.