In a landmark decision, the US Supreme Court has declared many of former President Donald Trump’s tariffs illegal, delivering a significant blow to his administration’s aggressive economic policies. The 6-3 ruling, issued on 20 February 2026, found that Trump’s application of the International Emergency Economic Powers Act (IEEPA) did not provide sufficient legal grounds for the widespread tariffs imposed during his presidency. This ruling marks the first time the Court has overturned a policy from Trump’s second term and raises critical questions about the limits of executive authority.
Court’s Rationale: Congress Holds the Purse Strings
The Supreme Court’s opinion emphasised that the power to impose tariffs is inherently a congressional authority. The justices referenced the framers of the Constitution, who made it clear that the taxing power—and by extension, the ability to impose tariffs—was vested solely in Congress. The majority opinion stated, “The Framers did not vest any part of the taxing power in the executive branch,” reinforcing the notion that tariffs, particularly during peacetime, cannot be unilaterally enacted by the President.
By invoking the “major questions doctrine,” the Court underscored that the executive branch cannot exploit vague statutory language to justify significant legislative actions. “When Congress has delegated its tariff powers, it has done so in explicit terms and subject to strict limits,” the ruling asserted, thus making it clear that Trump’s tariffs lacked the necessary congressional endorsement.
Notably, Trump’s reliance on the IEEPA—typically employed in times of national emergency—was critiqued as an inappropriate application of the law, with the Court highlighting that the White House had conceded that the President has “no inherent authority to impose tariffs during peacetime.”
Political Reactions: Bipartisan Responses Emerge
The ruling elicited varied reactions from the political spectrum. During a White House gathering with governors, Trump referred to the decision as “a disgrace,” highlighting his frustration with the Court’s challenge to his economic agenda.
Senate Minority Leader Chuck Schumer, however, heralded the decision as a “victory for the wallets of every American consumer”. Schumer asserted that Trump’s “illegal tariff tax just collapsed,” framing the ruling as a necessary step towards ending the chaos surrounding the administration’s trade policies.
Meanwhile, reactions from major trading partners were measured. William Bain, head of trade policy at the British Chamber of Commerce, noted that while the ruling clarifies the executive’s limitations in raising tariffs, it does not fully resolve the uncertainties faced by businesses. He stressed the importance of reducing tariffs where feasible, reflecting a desire for stability in transatlantic trade relations.
In Mexico, President Claudia Sheinbaum indicated that her administration is reviewing the ruling closely, acknowledging the deep economic ties between the two nations. “It is very important for both countries to maintain the trade agreement,” she remarked, underlining the broader implications of the Court’s decision for international trade dynamics.
The Road Ahead: Implications for Future Tariff Policies
The Supreme Court’s ruling may not only reshape the landscape of US trade policy but also introduce complexities regarding the tariffs already imposed. Justice Brett Kavanaugh, in his dissent, cautioned that this ruling might not significantly curtail presidential authority over tariffs in the long term, suggesting that Trump merely “checked the wrong statutory box” rather than fundamentally overstepping executive boundaries.
Kavanaugh also raised concerns over the potential repercussions of the ruling, particularly regarding the refunds owed to importers following the invalidation of these tariffs. He noted that the process of returning billions of dollars to businesses could become a “mess”, drawing attention to the administrative challenges that lie ahead.
Why it Matters
The Supreme Court’s decision is a pivotal moment in the ongoing debate over executive power and its limitations. By reaffirming Congress’s exclusive authority to impose tariffs, the ruling not only curtails the scope of presidential economic intervention but also sets a precedent that may influence future administrations. As the nation grapples with the implications of this ruling, it will be crucial for lawmakers to reflect on the balance of power within the federal government, ensuring that economic policymaking remains a collaborative process rather than a unilateral executive endeavour. In a time of global economic uncertainty, the ramifications of this decision will resonate well beyond the courtroom, impacting trade relationships and domestic economic conditions for years to come.
