Supreme Court Strikes Down Trump's IEEPA Tariffs in 6-3 Decision

On February 20, 2026, the U.S. Supreme Court issued a 6-3 ruling invalidating the broad global import tariffs that President Donald Trump imposed using the International Emergency Economic Powers Act (IEEPA) of 1977. This decision serves as a significant constitutional check on executive authority in international trade, reinforcing the separation of powers by confirming that the power to establish tariffs is reserved for Congress.

Chief Justice John Roberts authored the majority opinion, asserting that the President must cite clear congressional authorization for actions of such vast economic and political consequence, a standard the Trump administration's IEEPA tariffs failed to meet under the "major questions" doctrine. The invalidated tariffs included a baseline 10 percent duty on all imports, referred to as the 'Liberation Day' tariffs announced in April 2025, along with supplementary duties ranging from 15 to 50 percent directed at numerous trading partners. The administration had defended these measures by citing national emergencies related to trade deficits and fentanyl trafficking.

The ruling upholds prior decisions from lower courts, including the U.S. Court of International Trade (CIT), which had unanimously rejected the administration’s interpretation of IEEPA’s power to "regulate importation" as including the authority to tax. The dissenting justices—Samuel Alito, Clarence Thomas, and Brett Kavanaugh—argued that the tariffs were lawful based on the text and precedent available to the executive branch when they were imposed. The IEEPA itself, enacted in 1977, had never before been used by a president to impose tariffs, making the action unprecedented in modern U.S. history. The Court’s decision followed oral arguments held on November 5, 2025.

The financial consequences of the ruling are substantial, immediately halting further revenue collection and initiating a complex process for duty refunds. Estimates for the collected IEEPA tariffs vary widely, with figures cited ranging from approximately $89 billion as of late summer 2025 to as high as $175 billion according to some economists' refund projections. The Treasury Department collected a total of $287 billion in tariffs in 2025, representing a 192 percent increase from the previous year, with IEEPA revenues comprising a significant portion of that total.

The CIT is designated as the forum for managing these refund claims, which importers must pursue through post-summary corrections or litigation, potentially creating prolonged uncertainty for businesses. This specific ruling does not affect tariffs imposed under other statutory authorities, such as Section 232 of the Trade Expansion Act of 1962 or Section 301 of the Trade Act of 1974; for example, 25 percent steel tariffs on the UK and 50 percent on the EU, justified under Section 232 national security investigations, remain in effect. The stock market reacted positively to the announcement, with the Dow Jones Industrial Average rising 207.03 points (0.42%).

International reaction was immediate. Canada's Trade Minister Dominic LeBlanc stated that the ruling "reinforces" Canada's position that the IEEPA tariffs were unjustified. Meanwhile, Democratic Senator Elizabeth Warren commented that the decision could not reverse the damage done to supply chains and American families, noting that a clear legal mechanism for consumers and many small businesses to recoup payments is lacking compared to large corporations pursuing litigation. Legal experts suggest the administration may pivot to alternative legal bases, such as utilizing Section 301 investigations, to implement similar trade policies.