The US Supreme Court dealt a major blow to the Trump administration’s tariff strategy by ruling 6-3 against the use of emergency powers to impose tariffs on imports from Canada, Mexico, and China. The decision, handed down on February 20, 2026, invalidated tariffs that had generated over $130 billion in revenue, forcing the administration to seek alternative legal avenues.
Chief Justice John Roberts wrote that the International Emergency Economic Powers Act (IEEPA) does not grant the president the authority to apply tariffs, stating the law’s language on regulating importation does not extend to tariff imposition. This ruling marked the most significant judicial limitation on presidential trade authority in decades, with justices appointed by both political parties forming the majority.
Administration’s swift pivot to Section 301 tariffs
By late July 2026, the administration introduced new tariffs ranging from 10% to 12.5% on products from roughly 60 countries, shifting focus from trade deficits and national security to allegations of forced labor in supply chains. These measures rely on Section 301 of the Trade Act of 1974, which empowers the US Trade Representative to act against unfair trade practices.
This pivot broadens the scope significantly compared to the initial tariffs targeting just three countries under IEEPA. The rates are lower but cover a much wider array of trading partners, reflecting a strategic move to maintain pressure on global supply chains accused of human rights abuses.
The Supreme Court’s ruling initially sparked a 2% surge in Bitcoin’s price, pushing it above $68,000 as investors saw the decision as reducing uncertainty around trade policy. The digital asset market capitalization expanded to approximately $2.38 trillion during that period, highlighting how geopolitical shifts continue to influence crypto markets.
