The Supreme Court dealt a blow to Donald Trump’s tariff strategy on February 20, 2026, ruling 6-3 that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. Within hours, the administration responded by invoking alternative trade laws to keep tariffs in place.
Shifting legal ground to maintain tariffs
The case Learning Resources, Inc. v. Trump challenged Trump’s expanded tariffs on imports from Canada, Mexico, China, and others. Chief Justice John Roberts wrote the majority opinion, which invalidated the broad tariff powers claimed under IEEPA.
To counter this, the White House quickly implemented emergency tariffs under Section 122 of the Trade Act of 1974. This statute allows tariffs in response to a significant trade deficit and is not affected by the court's ruling on IEEPA. These tariffs started at 10% and can increase to 15%, but they come with a strict expiration of 150 days unless Congress extends them.
also the administration plans to explore trade restrictions under Sections 232 and 301, which deal with national security concerns and unfair trade practices respectively. This legal maneuvering shows a clear intent to maintain a strong tariff stance despite judicial pushback.
The Supreme Court’s decision was narrowly focused on IEEPA, emphasizing that while this act does not grant tariff powers, it does not eliminate presidential trade authority altogether. The conservative majority rejected the idea of broad emergency trade powers without explicit congressional approval. Three justices dissented, but the ruling sets a precedent limiting executive reach.
Markets are now watching how long the Section 122 tariffs will remain in effect and whether Congress will intervene. The 150-day limit puts pressure on lawmakers to act if they want to sustain the current tariff levels. Meanwhile, affected countries like Canada, Mexico, and China may continue retaliatory steps, complicating trade relations further.
