The US Supreme Court has dealt a powerful blow to Donald Trump's administration by declaring his flagship import tariffs illegal. The ruling concerns tariffs imposed under the International Emergency Economic Powers Act, opening the door to claims worth $175 billion. In response, the White House immediately announced a new tariff plan, introducing a 10% global rate and deepening uncertainty in world markets.

Illegality of Emergency Powers

The Supreme Court ruled that the IEEPA does not authorize the president to unilaterally impose tariffs, which is the exclusive domain of Congress.

Billions of Dollars to Be Returned

Companies have already filed over 1,800 lawsuits for the return of illegally collected tariffs, estimated to be worth $175 billion.

New 10-15 Percent Tariff

In response to the ruling, Donald Trump introduced a new global 10% rate, planning to quickly raise it to 15% under a different law.

The US Supreme Court's decision of February 20, 2026, constitutes an unprecedented limitation of presidential prerogatives in trade policy. The judges ruled by a vote of 6 to 3 that President Donald Trump exceeded his authority by using the International Emergency Economic Powers Act (IEEPA) to impose widespread tariffs. The Court argued that tariffs are a form of tax, and the constitutional authority in this area belongs to the legislative branch. This ruling strikes at the foundations of the administration's economic strategy, which treated tariff barriers as a primary tool of geopolitical pressure. Donald Trump reacted to the judicial defeat with his characteristic dynamism, attacking the judges he himself appointed, including Neil Gorsuch and Amy Coney Barrett. However, the President did not abandon protectionism and almost immediately signed a new executive order. It introduced a 10% tariff rate on all imported goods effective last Tuesday, with a promise to raise it to 15 percent within a few days. The new legal basis relies on the 1974 Trade Act, which is intended to make challenging the provisions in court more difficult, although experts predict another wave of legal battles. Since Nixon's trade war in the 1970s, US presidents have rarely resorted to such radical and widespread trade restrictions, typically relying on negotiated multilateral agreements.The situation has caused panic among the largest US corporations. Companies such as FedEx, Costco, and Goodyear have already filed lawsuits for the return of improperly collected fees. It is estimated that the total value of IEEPA tariffs collected amounted to about $133.5 billion, although the final claim amount may increase with interest. FedEx was the first to declare that after recovering funds from the government, it would pass them on to its customers who actually bore the cost of the tariffs. Meanwhile, tensions are rising on the international stage. The European Union is considering suspending the Turnberry Agreement, and Canada warns of investment paralysis ahead of the upcoming review of the USMCA. „If there's no consensus in the review the agreement continues. Then there's an annual review that starts and if uncertainty is one of the objectives from one of our partners you can imagine scenarios of how this might go.” — Dominic LeBlanc Analysts point out that the tariff confusion paradoxically strengthens China's position in Asia, as exporters there lose confidence in the stability of the American market. While the Trump administration tries to contain the chaos, the International Monetary Fund calls on Washington to focus on reducing the budget deficit instead of aggressive tariff policy, which primarily hits American consumers paying higher prices for everyday products.

Mentioned People

  • Donald Trump — President of the United States, author of the challenged tariff policy.
  • Neil Gorsuch — Supreme Court Justice appointed by Trump, who voted against the tariffs.
  • Dominic LeBlanc — Canadian minister responsible for trade with the USA.