A landmark Supreme Court decision has halted tariffs imposed under the International Emergency Economic Powers Act (IEEPA). This action takes effect on February 24, 2026. The ruling invalidates sweeping import duties. These tariffs were put in place by President Donald Trump. The Supreme Court declared these tariffs illegal. This decision follows a 6-3 vote by the justices. They ruled that IEEPA does not grant the president power to impose tariffs. Tariffs are a core power of Congress. The Constitution reserves taxing power for Congress. The Court found that the IEEPA statute does not explicitly authorize tariff-setting powers.
Supreme Court Ruling Overturns IEEPA Tariffs
The U.S. Supreme Court’s decision on February 20, 2026, was a significant blow to the executive branch’s unilateral tariff authority. It specifically targeted tariffs enacted under IEEPA. These included the “reciprocal tariffs” and “fentanyl orders”. The Court’s ruling means these IEEPA-based tariffs are now invalid. They cannot be sustained going forward. Collection of these duties has ceased. U.S. Customs and Border Protection (CBP) stopped collecting them at 12:00 a.m. EST on February 24, 2026. This marks the end of new IEEPA tariff collections.
Background: The Rise of IEEPA Tariffs
President Trump’s administration invoked IEEPA frequently. This 1977 law grants broad economic authorities for national emergencies. The administration used it to impose tariffs on goods from nearly all countries. These included tariffs on China, Mexico, and Canada. They were linked to issues like fentanyl trafficking and border security. The administration also imposed “reciprocal tariffs.” These targeted trade deficits and were applied to virtually all trading partners. These tariffs significantly increased U.S. import duties. From January to April 2025, the average effective U.S. tariff rate rose dramatically. By early 2025, the government had collected billions of dollars under these tariffs.
Implications for Businesses and Consumers
The Supreme Court ruling has major implications for businesses. Importers who paid these illegal tariffs may be entitled to refunds. However, the process for obtaining refunds is not automatic. It will likely involve claims through the U.S. Court of International Trade. This situation creates uncertainty for businesses. Supply chain pricing and contract assumptions tied to these tariffs may need review. For small businesses, this ruling brings greater predictability. It reduces the likelihood of sudden, unilateral trade actions. However, the overall tariff landscape remains volatile.
New Tariffs Emerge Under Different Authority
Despite the invalidation of IEEPA tariffs, the administration has moved swiftly. President Trump signed an executive order on February 20, 2026. This order initiated new tariffs. These new duties are imposed under Section 122 of the Trade Act of 1974. This section allows for temporary duties to address international payments problems. The initial tariff rate is 10%. It will increase to 15%. These new tariffs are set to last for 150 days. They will apply to most imports, though certain product categories are exempt. This means a tariff swap is occurring.
Other Tariff Regimes Remain Intact
Crucially, the Supreme Court’s decision does not affect other tariff regimes. Tariffs imposed under Section 232 (national security) and Section 301 (unfair trade practices) remain in effect. These include tariffs on steel, aluminum, and other goods. Investigations into new tariffs under these authorities are also expanding. This creates a complex trade policy environment. The U.S. Border continues to navigate these changes.
The Future of US Trade Policy
The Supreme Court’s ruling is a significant development. It reaffirms Congress’s power over taxation. It limits the executive’s ability to impose tariffs unilaterally under broad emergency powers. However, the administration’s swift implementation of new tariffs under Section 122 shows a continued focus on trade enforcement. This ongoing action is trending in US trade news. Businesses must stay informed. They need to adapt to this evolving trade policy landscape. Refund processes will be critical for affected importers. The U.S. government’s actions will shape future trade relations.
