The US Supreme Court struck down Donald Trump's sweeping global tariffs in a 6-3 ruling, finding he had exceeded his presidential authority — but within 24 hours, Trump had imposed a fresh 15% universal tariff under alternative legislation, leaving businesses, consumers, and trade lawyers facing months of uncertainty over billions of dollars in potential refunds.
The US Supreme Court ruled 6-3 on 20 February 2026 in Learning Resources v. Trump that President Donald Trump exceeded his authority by imposing sweeping global tariffs under the International Emergency Economic Powers Act of 1977 (IEEPA).
Chief Justice John Roberts, writing for the majority, determined that the International Emergency Economic Powers Act (IEEPA) of 1977 does not grant the president authority to impose tariffs. The Constitution assigns this power to Congress, not the executive branch.
Trump called the decision “terrible” and announced an immediate 10% global tariff using Section 122 of the Trade Act of 1974, which permits temporary tariffs up to 15% for 150 days.
“It is my Great Honor to have just signed, from the Oval Office, a Global 10% Tariff on all Countries, which will be effective almost immediately. Thank you for your attention to this matter!” Trump posted on Truth Social.
The ruling represents Trump’s biggest Supreme Court setback since returning to office in January 2025. Notably, two justices he appointed—Neil Gorsuch and Amy Coney Barrett—joined Roberts and the three liberal justices in the majority.
Justice Brett Kavanaugh, joined by Clarence Thomas and Samuel Alito, dissented, suggesting Trump could “impose most if not all of these same sorts of tariffs under other statutory authorities.”
Trump raises global tariffs to 15% following Supreme Court ruling
Following a court judgment, President Trump signed an executive order eliminating certain IEEPA-based tariffs targeting specific countries (China, Russia, Iran, Cuba, Venezuela, Brazil) and issues (drugs, borders).
In their place, Trump announced a new global 10% tariff on imports from all countries, introduced under Section 122 of the Trade Act of 1974, effective 24 February 2026, and lasting 150 days, with some goods exempted.
The following day, on 21 February 2026, he stated that the rate would rise to 15% (the statutory maximum under Section 122), though no formal order for that increase has yet been issued.
“I, as President of the United States of America, will be, effective immediately, raising the 10% Worldwide Tariff on Countries, many of which have been “ripping” the U.S. off for decades, without retribution (until I came along!), to the fully allowed, and legally tested, 15% level. During the next short number of months, the Trump Administration will determine and issue the new and legally permissible Tariffs,” Trump posted on Truth Social.
The Supreme Court ruled 6-3 on Friday that Trump had overstepped his authority when imposing varied tariff rates under an economic emergency statute. In response, Trump quickly implemented a 10% universal tariff before raising it to 15% the following day.
The updated tariffs rely on Section 122 legislation, which caps levies at 15% and requires congressional approval for extensions beyond 150 days. Trump stated he will use this timeframe to develop additional “legally permissible” tariffs through statutes permitting import taxes based on national security concerns or unfair trade practices.
Earlier, The US Supreme Court was scheduled to issue its decision on the legality of former President Donald Trump’s global tariff policies on 20 January 2026, but no ruling was delivered on that date. The court had not announced when it will next release decisions. The Supreme Court typically doesn’t reveal in advance which cases it will decide or when it will issue rulings.
During oral arguments in November, justices across ideological lines questioned whether the administration had the legal authority to impose the tariffs. Trump’s team relied on a 1977 emergency powers law to justify the measures. Lower courts have already ruled that Trump exceeded his authority, leading the administration to appeal.
Additionally, an executive order signed on 20 February 2026, ended duty-free “de minimis” treatment for low-value imports from all countries, meaning small packages that previously entered the US tax-free will now be subject to duties.
Economic impact and uncertainty
The struck-down tariffs had generated over USD 175 billion, according to Penn-Wharton Budget Model estimates. Trump invoked IEEPA beginning in February 2025 against China, Canada, and Mexico, citing fentanyl trafficking, then expanded tariffs to most trading partners on 2 April—his “Liberation Day.”
Despite Trump declaring a national emergency over the USD 1.2 trillion US goods trade deficit, that deficit actually grew to a record USD 1.24 trillion in 2025.
Democrats celebrated the decision. California Governor Gavin Newsom demanded that families and businesses receive refund checks, calling the tariffs “an illegal cash grab.” However, the refund process remains unclear and could take years to resolve.
Trump indicated he has “other alternatives” available, including provisions allowing tariffs based on national security concerns or retaliatory actions against unfair trade practices, though these lack IEEPA’s flexibility and scope.
Despite the Supreme Court’s invalidation of tariffs imposed under the International Emergency Economic Powers Act (IEEPA), including a 15% levy on EU goods and a 20% tariff on Vietnamese imports, tariffs on steel, aluminium, and automobiles under other legal frameworks remain in effect.
Consumers won’t see prices of goods drop soon. Even with tariffs removed, retailers rarely lower prices quickly, particularly amid ongoing trade uncertainty. The Yale Budget Lab estimates households have already paid roughly USD 1,800 due to these tariffs, according to the Washington Post.
The refund dilemma
It is estimated that between USD 240 billion and USD 300 billion in tariff revenue has been collected, with US firms bearing approximately 90% of costs before passing them to consumers, says Erin McLaughlin of the Conference Board.
Justice Brett Kavanaugh of the Supreme Court warned the refund process would be a “mess.” Trump dismissed refund discussions entirely, predicting years of litigation. Trade lawyers expect importers to eventually recover funds through complex legal proceedings, but individual consumers are unlikely to see any money back since companies pay tariffs directly.
The ruling establishes boundaries on presidential trade authority but leaves unresolved critical questions about refunds and future policy, creating continued uncertainty for businesses and consumers alike.
