Supreme Court Strikes Down Trump Tariffs
February 20th, 2026Update: Trump Says He Will Raise U.S. Global Tariff Rate from 10% to 15%
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Update: Live: Trump Press Conference
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The U.S. might have to refund $175 billion.
Via: ZeroHedge:
The Supreme Court on Friday struck down Trump’s tariffs. In a 6-3 decision (170-pages), the court ruled that Trump’s use of the 1977 International Emergency Economic Powers Act (IEEPA) – which constitute about half of the tariffs we’ve seen under Trump – was not lawful. Kavanaugh, Thomas and Alito dissented.
“IEEPA does not authorize the President to impose tariffs,” wrote the court.
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Friday’s decision rests on the notion that tariffs are not merely a tool for regulating trade, but also a a form of taxation that the Constitution reserves to Congress. Citing Article I, Section 8, the majority stressed that the power to impose tariffs is “very clear[ly] … a branch of the taxing power,” and that the Framers gave Congress “alone … access to the pockets of the people.” The administration had argued that IEEPA’s grant of authority to “regulate … importation” permitted the President to impose tariffs in response to declared national emergencies. The Court rejected that interpretation, noting that while “taxes may accomplish regulatory ends, it does not follow that the power to regulate includes the power to tax as a means of regulation.”
The majority also pointed to the statute’s text, emphasizing that IEEPA authorizes the President to “investigate, block … regulate, direct and compel, nullify, void, prevent or prohibit” certain transactions – yet makes no mention of tariffs or duties.
“Had Congress intended to convey the distinct and extraordinary power to impose tariffs,” the opinion states, “it would have done so expressly, as it consistently has in other tariff statutes.”
The Court further highlighted a lack of historical precedent – noting that that in the nearly 50 years since IEEPA’s enactment, “no President has invoked the statute to impose any tariffs,” and that combined with the sweeping economic impact of the measures at issue – it was a “telling indication” that the asserted authority falls outside the President’s legitimate reach.
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That said, even if that happens, the Trump administration has several other legal avenues they can pursue. As Deutsche Bank noted last month;
For instance, the sectoral tariffs (e.g. on steel and aluminum) aren’t covered by the court ruling, whilst another option would be to use Section 122 of the 1974 Trade Act, which permits temporary 15% tariffs for 150 days.
And Goldman:
This won’t be the end of tariffs… the administration will almost certainly roll out alternative legal frameworks. Net result is probably slightly fewer tariffs, materially more trade uncertainty, and some incremental deficit concerns. Net-net, that’s mildly supportive for equities and mildly negative for bonds… but largely priced for both.
I heard this will make Lutnick a lot of money.