The U.S. Supreme Court delivered a significant blow to former President Donald Trump’s trade agenda on February 20, 2026, by ruling that his sweeping global tariffs were unlawful because he lacked statutory authority to impose them under the International Emergency Economic Powers Act (IEEPA). In a 6–3 decision, the Court held that tariffs are the exclusive domain of Congress, not the executive branch, and that IEEPA does not clearly authorize such broad tariff powers for a president. The ruling not only invalidates many of the tariffs put in place over the past year but also raises complex questions about whether companies that paid those duties will be entitled to refunds.
In response, Trump sharply criticized the decision and promptly moved to impose a new 15 % global tariff under a different statutory authority, illustrating that trade policy uncertainty will persist despite the court’s check on executive power. The ruling underscores the constitutional balance between branches of government, signals limits on unilateral presidential action in economic affairs, and has sparked reactions from international partners like the European Union urging the U.S. to honor existing trade commitments. Businesses and markets are now watching closely as the legal and economic repercussions unfold.
This ruling by the U.S. Supreme Court shows that trade policy isn’t just about economics; it’s also about who actually has the power to make those decisions. By limiting Donald Trump’s ability to impose tariffs on his own, the decision reinforces that Congress plays the main role in setting trade rules. At the same time, since new tariffs could still be introduced under other laws, businesses and global partners, such as the European Union, are likely to continue dealing with considerable uncertainty going forward.
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