02/20/2026
In a major decision, the U.S. Supreme Court (SCOTUS) struck down the Trump administration's global tariffs -- the President's signature economic policy. SCOTUS ruled that the President does not have the authority under the International Emergency Economic Powers Act (IEEPA) to impose tariffs.
The decision will reverberate for some time and there are a number of implications to consider in the coming days and weeks.
For now, it's likely that the administration will use other (more limited) mechanisms: "Section 122 of the Trade Act of 1974 allows the administration to impose tariffs to address trade deficits, but those tariffs are limited to 15%, and can only be imposed for 150 days. Likewise, Section 301 of the 1974 Trade Act or Section 232 of the Trade Expansion Act of 1962 allow the president to impose tariffs, but only after a fact-finding by the U.S. Trade Representative and the Commerce Department." As this plays out, what happens to the trade deals negotiated over the past year and the administration's use of tariffs as a major tool in foreign policy (not just economic policy)? Could the administration go through Congress to secure a legislative path? This is possible but much harder now given Republicans' razor-thin majority in the House and pending Midterms.
Additionally, thousands of American businesses impacted by the tariffs could use the "duty drawback" provision to secure billions of dollars in refunds ($142B collected so far). The "duty drawback" provision does not apply to all businesses and there may be a messy legal fight ahead. Businesses may also expect and plan for a more predictable trade environment -- without the threat of sweeping tariffs. It's also worth noting that some companies (e.g. Costco) filed a lawsuit filed a lawsuit against the Trump administration in late 2025 in the U.S. Court of International Trade, seeking a full refund of duties paid on imported goods. Today's SCOTUS decision will only strengthen Costco's argument. American consumers, who have absorbed some of the downward price pressures as businesses passed on costs, may find some relief in the mid-term.
More to come. Watch this space.
BREAKING: The US Supreme Court struck down President Donald Trump’s sweeping global tariffs, undercutting his signature economic policy and delivering his biggest legal defeat since he returned to the White House. Read our full live coverage: bloom.bg/4coneMj
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