Supreme Court Strikes Down Most Of Trump's Tariffs

Key Takeaways

• Most of the tariffs President Donald Trump imposed in 2025 were illegal, the Supreme Court ruled Friday.
• Trump has vowed to reimpose the import taxes under other laws if he were defeated in the Supreme Court.
• The economic impact of the ruling could be limited if the administration swiftly replaces the tariffs.

President Donald Trump's signature economic policy was illegal.

That's according to the Supreme Court, which ruled Wednesday against the sweeping tariffs Trump imposed on most U.S. trading partners in 2025 using his emergency powers. In a 6-3 ruling, the high court determined Trump exceeded his authority as president when he imposed the import taxes.

The ruling overturns all of the tariffs Trump imposed under the International Emergency Economic Powers Act (IEEPA) of 1977. That represents about 75% of all the tariffs Trump imposed last year, according to an analysis by UBS, including the "reciprocal" tariffs he placed on imports from most countries in the world.

The ruling leaves in place tariffs on specific items such as automobiles and steel, which were imposed under a different authority, section 232 of the Trade Expansion Act of 1962.

"The President enjoys no inherent authority to impose tariffs during peacetime," the ruling said. "It instead relies exclusively on IEEPA to defend the challenged tariffs."

Hours after the ruling, Trump said he was imposing a 10% global tariff under a different authority and that his administration was working on imposing additional tariffs using other authorities. The new tariff, under Section 122 of the Trade Act of 1974, which expires after 150 days.

The ruling imposes new restraints on Trump's ability to slap tariffs on specific countries at the drop of a hat

"Against that backdrop of clear and limited delegations, the Government reads IEEPA to give the President power to unilaterally impose unbounded tariffs and change them at will," Chief Justice John Roberts wrote in the majority opinion. "That view would represent a transformative expansion of the President’s authority over tariff policy."

Indeed, Trump has imposed tariffs at will, at one point raising tariffs on Canada by 10% because he was angered by an anti-tariff TV commercial that aired there.

What This Means For The Economy

The economic impact of the ruling could be small if Trump restores the original tariff levels. If tariff levels ultimately fall, inflation would be lower, analysts say.

Trump Could Impose New Tariffs

The court sided with Learning Resources Inc., which manufactures educational materials, and sued the administration last year, arguing that IEEPA does not give Trump the authority to impose tariffs at will.

Trump vowed to impose new tariffs to replace the ones that were overturned.

"Other alternatives will now be used to replace the ones that the court incorrectly rejected," Trump said in a press conference after the ruling, saying the new ones would bring in "even more money."

The ruling once again throws U.S. trade policy into uncertainty.

It was unclear how soon Trump would impose new tariffs, or whether they would be as high as the old ones.

The Next Legal Battle: Tariff Refunds

The ruling does not order the government to refund tariffs already paid, but opens the door for other lawsuits that could result in refunds, Alan B. Morrison, associate dean for public interest and public service at George Washington University Law School, wrote in a commentary. The process could be chaotic, Justice Brett Kavanaugh wrote in a dissenting opinion.

"The United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others," he wrote. "As was acknowledged at oral argument, the refund process is likely to be a 'mess.'"

The tariffs are intended to rebalance global trade in favor of the U.S. and boost American manufacturing and jobs in that sector, among other goals.

Trump's import taxes have had a significant impact on the U.S. and world economies, reshaping trade patterns, slowing global economic growth, dragging down the U.S. job market, and putting upward pressure on inflation. They've also affected household finances as importers have passed costs along to consumers, costing the typical household $1,681 a year, according to an analysis by the Yale Budget Lab.

At the same time, the $216 billion in revenue that the tariffs generated in fiscal 2025 helped reduce the U.S. government's spending deficit. The U.S. closed out fiscal 2025 with a deficit of $1.78 trillion, down from $1.84 trillion in 2024. Removing the tariffs leaves a significant gap in the budget.

"With today’s Supreme Court ruling affirming the illegality of President Trump’s emergency tariffs, the country will now be about $2 trillion deeper in the hole," Maya MacGuineas, president of the Committee for a Responsible Federal Budget watchdog group, said in a statement. "With the national debt already the size of the entire U.S. economy and interest on the debt costing more than $1 trillion this year, this is very bad news."

Economic Impact Unclear

Ahead of the ruling, analysts speculated about what a defeat for Trump would mean for the economy. In the end, the tariffs could return in a different form, leaving those economic forces in full effect. For example, Section 232 of the Trade Expansion Act allows the president to impose tariffs on certain products after a Department of Commerce investigation, while Section 301 allows tariffs on a country found to be engaging in unfair trade practices.

"We have maintained that the ongoing case at the Supreme Court doesn't change our expectations for US trade policy, as the president can leverage a range of other authorities—both temporary and longer-lasting—to effectively replace or quickly re-impose the current tariff levels," Ariana Salvatore and Bradley Tian, strategists at Morgan Stanley, wrote in a commentary last month.

Some economists said the ruling could breathe some life into the economy, especially for small businesses that have been hit hardest by the import taxes.

"The Supreme Court’s decision to overturn the tariffs is a gift to the economy," Heather Long, chief economist at Navy Federal Credit Union, said in a commentary. "It will force a reset in tariff policy that is likely to lead to lower overall tariff rates and a more orderly imposition of future tariffs. This will boost economic growth and provide some relief for American consumers. Smaller firms will be especially helped by this ruling. They don’t have supply chain managers to help source their goods or lobby for exclusions, so tariffs have hit smaller firms especially hard.”

Related Education

What Is a Tariff and Why Are They Important?

Trade Wars Explained: History, Benefits, and U.S.-China Example

Last month, Trump said there would be a "complete mess" if the court ruled against his tariffs, citing lost revenue and the possible requirement to pay billions in tariff refunds. Should the court strike the tariffs down, "we're screwed!" he wrote in all-caps in a post on his Truth Social platform.

It's also possible the White House could take the opportunity to reduce tariffs somewhat, which would lower inflation at a time when Trump's Democratic political opponents are emphasizing voters' cost-of-living concerns.

"We do think there's scope for the administration to take a lighter-touch approach to the overall tariff regime, given a recent political focus on affordability," Salvatore and Tian wrote.

The justices were split on their reasoning, with conservatives Chief Justice John Roberts, Neil Gorsuch, and Amy Coney Barrett signing the majority opinion. Liberals Sonya Sotomayor, Ketanji Brown Jackson and Elena Kagan voted with the majority but disagreed with some of the legal reasoning behind it, specifically, its application of the "major questions" doctrine of legal interpretation, which holds that Congress cannot give the executive branch powers with major significance without explicitly stating what those powers are. Conservatives Clarence Thomas, Brett Kavanaugh and Samuel Alito dissented.

Update, Feb. 20, 2026—This story has been updated after publication to include additional detail and reaction from experts. The story was originally published Feb. 20, 2026.

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