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The U.S. Supreme Court struck down on Friday (February 20, 2026) President Donald Trump’s sweeping tariffs that he pursued under a law meant for use in national emergencies, rejecting one of his most contentious assertions of his authority in a ruling with major implications for the global economy.
The justices, in a 6-3 ruling, upheld a lower court’s decision that the Republican president’s use of this 1977 law exceeded his authority. The Supreme Court reached its conclusion in a legal challenge by businesses affected by the tariffs and 12 U.S. states, most of them Democratic-governed, against Mr. Trump’s unprecedented use of this law to unilaterally impose the import taxes.
Mr. Trump has leveraged tariffs – taxes on imported goods – as a key economic and foreign policy tool.
They have been central to a global trade war that Mr. Trump initiated after he began his second term as president, one that has alienated trading partners, affected financial markets and caused global economic uncertainty.
Mr. Trump’s tariffs were forecast to generate over the next decade trillions of dollars in revenue for the United States, which possesses the world’s largest economy.
Trump’s administration has not provided tariffs collection data since December 14. But Penn-Wharton Budget Model economists estimated on Friday (February, 20, 2026) that the amount collected in Mr. Trump’s tariffs based on the International Emergency Economic Powers Act stood at more than $175 billion. And that amount likely would need to be refunded with a Supreme Court ruling against the IEEPA-based tariffs.
The U.S. Constitution grants Congress, not the president, the authority to issue taxes and tariffs. But Mr. Trump instead turned to a statutory authority by invoking IEEPA to impose the tariffs on nearly every U.S. trading partner without the approval of Congress. Trump has imposed some additional tariffs under other laws that are not at issue in this case. Based on government data from October to mid-December, those represent about third of the revenue from Trump-imposed tariffs.
IEEPA lets a president regulate commerce in a national
emergency. Trump became the first president to use IEEPA to
impose tariffs, one of the many ways he has aggressively pushed
the boundaries of executive authority since he returned to
office in areas as varied as his crackdown on immigration, the
firing of federal agency officials, domestic military
deployments and military operations overseas.
Trump described the tariffs as vital for U.S. economic
security, predicting that the country would be defenseless and
ruined without them. Trump in November told reporters that
without his tariffs “the rest of the world would laugh at us
because they’ve used tariffs against us for years and took
advantage of us.” Trump said the United States was abused by
other countries including China, the second-largest economy.
After the Supreme Court heard arguments in the case in
November, Trump said he would consider alternatives if it ruled
against him on tariffs, telling reporters that “we’ll have to
develop a ‘game two’ plan.”
Treasury Secretary Scott Bessent and other administration
officials said the United States would invoke other legal
justifications to retain as many of Trump’s tariffs as possible.
Among others, these include a statutory provision that permits
tariffs on imported goods that threaten U.S. national security
and another that allows retaliatory actions including tariffs
against trading partners that the Office of the U.S. Trade
Representative determines have used unfair trade practices
against American exporters.
None of these alternatives offered the flexibility and
blunt-force dynamics that IEEPA provided Trump, and may not be
able to replicate the full scope of his tariffs in a timely
fashion.
Trump’s ability to impose tariffs instantaneously on any
trading partner’s goods under the aegis of some form of declared
national emergency raised his leverage over other countries. It
brought world leaders scrambling to Washington to secure trade
deals that often included pledges of billions of dollars in
investments or other offers of enhanced market access for U.S.
companies.
But Trump’s use of tariffs as a cudgel in U.S. foreign
policy has succeeded in antagonizing numerous countries,
including those long considered among the closest U.S. allies.
IEEPA historically had been used for imposing sanctions on
enemies or freezing their assets, not to impose tariffs. The law
does not specifically mention the word tariffs. Trump’s Justice
Department had argued that IEEPA allows tariffs by authorizing
the president to “regulate” imports to address emergencies.
The Congressional Budget Office has estimated that if all
current tariffs stay in place, including the IEEPA-based duties,
they would generate about $300 billion annually over the next
decade.
Total U.S. net customs duty receipts reached a record $195
billion in fiscal 2025, which ended on September 30, according
to U.S. Treasury Department data.
On April 2 on a date Trump labeled “Liberation Day,” the
president announced what he called “reciprocal” tariffs on goods
imported from most U.S. trading partners, invoking IEEPA to
address what he called a national emergency related to U.S.
trade deficits, though the United States already had run trade
deficits for decades.
In February and March of 2025, Trump invoked IEEPA to impose
tariffs on China, Canada and Mexico, citing the trafficking of
the often-abused painkiller fentanyl and illicit drugs into the
United States as a national emergency.
Trump has wielded his tariffs to extract concessions and
renegotiate trade deals, and as a weapon to punish countries
that draw his ire on non-trade political matters. These have
ranged from Brazil’s prosecution of former president Jair
Bolsonaro, India’s purchases of Russian oil that help fund
Russia’s war in Ukraine, and an anti-tariffs ad by Canada’s
Ontario province.
IEEPA was passed by Congress and signed by Democratic
President Jimmy Carter. In passing the measure, Congress placed
additional limits on the president’s authority compared to a
predecessor law.
The cases on tariffs before the justices involved three
lawsuits.
The Washington-based U.S. Court of Appeals for the Federal
Circuit sided with five small businesses that import goods in
one challenge, and the states of Arizona, Colorado, Connecticut,
Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New
York, Oregon and Vermont in another.
Separately, a Washington-based federal judge sided with a
family-owned toy company called Learning Resources.
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U.S. Supreme Court rejects Trump’s global tariffs
