What's Next? Congress, Courts, and the Future of Tariffs.
On February 20, 2026, the US Supreme Court delivered a major blow to President Trump’s trade agenda by ruling that the universal tariffs imposed on imports from virtually every country were illegal. The Court held that the International Emergency Economic Powers Act (IEEPA) does not grant the Executive authority to levy tariffs. Additionally, the ruling emphasized that the constitution makes it clear that Congress in Article 1, not the President has the power to collect duties. The tariffs President Trump issued were originally used to target countries such as China, Canada, Mexico, Columbia, and Brazil, and the rebuke of these tariffs significantly reduces the President’s power to use emergency law to rewrite US trade policy.
To understand the weight of this landmark decision we must gain context on the original powers laid forth in the constitution.
Under Article 1, Section 8 of the US constitution, Congress is granted the power to regulate commerce and impose taxes and duties. Tariffs are not merely protective economic tools, but they are also taxes, and at times taxes on consumers. At the founding of the country, tariffs were legislative, and for most of the 19th century, tariffs were the primary source of tax revenue as from 1800-1860 tariffs accounted for 60-90% of revenue. The shift toward presidential control came later in the 20th century after the Smoot-Hawley tariff worsened the US economy in the 1930s. Congress expanded Executive power for tariffs with the Trade Expansion Act of 1962 and the Trade Act of 1974 which coincided with a broader trend of powers being delegated to the executive branch post-WW2. While congress can authorize the president to act, it must do so within it’s constitutional boundaries.
President Trump’s global tariffs relied on the International Emergency Economic Powers Act (IEEPA), a 1977 law designed primarily for use of sanctions and economic measures against foreign threats. The President’s administration argued that trade imbalances and supply chain issues constituted a threat for massive tariffs after concluding its investigations.
In striking down the tariffs, the Supreme Court reasserted its authority and ruled that emergency economic powers do not authorize large-scale tariff authority. The President’s ability to impose sweeping tariffs is now constrained. Targeted tariffs under Section 232 which focus on national security and Section 301 which combat unfair trade practices remain intact, but expansive global duties without congressional authorization do not.
As a pivot, the President Trump issued tariffs under Section 122 of the Trade Act of 1974 to revive his tariffs on global imports. This rarely used law allows the president to impose tariffs up to 15% on global imports for up to 150 days to address deficits. But Congress must extend this tariff after 150 days.
The shift in US trade has introduced uncertainty, as the legality of broad tariff authority is now under judicial scrutiny, and allies negotiating trade agreements now must reassess the strategic importance behind talks. If the US seeks a long-term protectionist or strategic tariff regime, it must pursue it through legislation. The Supreme Court’s ruling did more than strike down a policy, it recentered constitutional boundaries, and in doing so, it returned the power to levy duties to Congress where the founders originally placed it.
Sources:
Article 1-Section 8 US Constitution
Section 232 - Trade Expansion Act of 1962