Feb. 20, 2026 — Washington — The U.S. Supreme Court ruled 6-3 that President Trump’s tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unconstitutional, invalidating “fentanyl” trafficking tariffs on imports from China, Canada, and Mexico, as well as broad “reciprocal” tariffs on nearly all countries.
The decision in Learning Resources, Inc. v. Trump and consolidated cases emphasized Congress’s exclusive taxing authority under Article I, Section 8. Chief Justice John Roberts authored the principal opinion, stating, > “Based on two words separated by 16 others in … IEEPA—‘regulate’ and ‘importation’—the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time. Those words … cannot bear such weight.”
The splintered majority held that IEEPA’s clause to “regulate … importation” during emergencies does not encompass revenue-raising tariffs, distinguishing them from quotas or embargoes, as confirmed by text, history, and precedents including the major questions doctrine.
Justices Brett Kavanaugh, Clarence Thomas, and Samuel Alito dissented. Kavanaugh argued IEEPA authorizes tariffs as a traditional regulatory tool, warning of refund chaos. Thomas added in a separate dissent, joined in part by others, that the majority “errs” on statutory interpretation and nondelegation, asserting, > “Throughout American history, the authority to ‘regulate importation’ has been understood to include the authority to impose duties on imports.”
President Trump swiftly responded, calling the ruling “terrible” and “deeply disappointing,” labeling majority justices “fools” and “lap dogs.” In a White House briefing, he announced 10-15% global tariffs effective February 24 under Section 122 of the Trade Act—previously unused—exempting some goods like pharmaceuticals and USMCA items from Canada and Mexico.
Markets showed mixed signals: Wall Street shares rose with the S&P 500 up 0.7%, but uncertainty persists over potential $100-200 billion refunds amid lawsuits from firms like Costco and states including California. The ruling may create a $1.5 trillion budget gap if unreplaced.
Image from X post showing market volatility post-ruling.
International responses were cautious. China urged cancellation of tariffs, while the EU analyzed impacts, halting some deals; French President Emmanuel Macron highlighted democratic checks. Businesses like Terry Precision Cycling welcomed relief but expect prolonged litigation for refunds.
The tariffs, estimated at over $200 billion in 2025, aimed to address fentanyl flows and trade imbalances but faced challenges for bypassing Congress.
