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Explainer
What will
happen to Trump’s tariffs after supreme court verdict?
6-3
ruling against unilateral imposition of tariffs without congressional approval
labelled a ‘disgrace’ by Trump
Trump
illegally used executive power to impose global tariffs, supreme court rules
Lisa
O’Carroll and Lauren Aratani
Fri 20
Feb 2026 20.05 GMT
The US
supreme court has struck down Donald Trump’s flagship policy of imposing
tariffs on foreign imports in his bid to revitalise American manufacturing. The
US president has reportedly called the decision a “disgrace”. Here’s what it
means, and what could happen next.
What did
the court ruling say?
The court
ruled that Trump exceeded his authority and should have got congressional
approval for the tariffs, which he announced on what he dubbed “liberation day”
last April. The tariffs, set at varying rates, covered dozens of countries from
war-torn Syria and impoverished Lesotho to the UK, China, Canada, Mexico, Japan
and EU countries.
The
conservative-majority court ruled six to three in the judgment, saying the
International Emergency Economic Powers Act (IEEPA) – the 1977 law designed to
address national emergencies Trump had used to implement them – “does not
authorise the president to impose tariffs”.
The
decision affirms earlier findings by lower courts that tariffs Trump imposed
under the IEEPA were illegal.
Will
Trump now abandon his tariff war?
Nope.
Trump – who faces a backdrop of slowing economic growth – has made it clear
that he is not backing down from his trade war.
Hours
after the ruling, Trump held a press conference where he vowed to keep tariffs
in place using a different law than the IEEPA.
He
announced a new 10% global tariff and said that his administration would
conduct additional “investigations” into unfair trading practices using the
Trade Act of 1974. The US president said he felt emboldened to continue his
trade war because the court curbed his powers under the IEEPA only.
“We have
other ways, numerous other ways,” Trump said. “While I am sure that they did
not mean to do so, the supreme court’s decision today made a president’s
ability to both regulate trade and impose tariffs more powerful and more
crystal clear, rather than less.”
The US
treasury secretary, Scott Bessent, said that the administration planned to use
sections of the Trade Act of 1974 to enact the new tariffs, which “will result
in virtually unchanged tariff revenue in 2026”, according to treasury
estimates.
While the
White House has these other alternative routes to pass tariffs, there are more
restrictions in the form of capped amounts and durations of tariffs, along with
procedural prerequisites such as investigations and hearings.
The
administration will pass a 10% global tariff under Section 122 of the Trade Act
of 1974, which allows tariffs of up to 15% to address “fundamental
international payments problems”. The law caps the tariff at 150 days while the
president addresses alleged “large and serious” deficits in the country’s
balance of payments.
Other
sections of the Trade Act will require an investigation that determines whether
the tariffs are necessary for national security or will remedy unfair trade
practices.
Trump
acknowledged that the White House would have to do more work but said,
ultimately, that the tariffs would not stop.
“We’re
using things that some people thought we should have used in the first place
but it’s a little more complicated. The process takes a little more time, but
the end result is going to get us more money,” he said.
When
asked whether existing trade deals with foreign countries were affected by the
ruling, Trump said: “Many of them stand. Some of them won’t, and they’ll be
replaced with the other tariffs.”
Trump’s
annual State of the Union address next week could further shed light on his
next steps.
Companies
that have invested significant time and money to adapt to America’s new import
red tape will not adjust supply chains again until they know the long-term
plan.
Richard
Rumbelow, director of international business at Make UK, said: “As the
situation continues to evolve, businesses now need clear, practical guidance on
how the ruling will be implemented, alongside progress on resolving the
remaining section 232 tariffs on UK steel and aluminium.”
Will the
tariffs be paid back?
Tariff
revenues for last year are estimated to have been between $240bn and $300bn,
most of it owing to US manufacturers and consumers. The cost to the US
government could be vast if it is forced to pay the money back to US importers.
Erin
McLaughlin, senior economist of US thinktankthe Conference Board, says that
“many studies show that US firms have paid 90% of that”, with much of it passed
on to the consumer through price rises in shops.
Even if
the US administration was forced to pay that back, it would “not be paid back
soon”, she said. The supreme court justice Brett Kavanaugh said the refund
process was likely to be a “mess”. Trump on Friday dismissed the idea of any
refunds. “It’s not [being] discussed. We’ll end up being in court for the next
five years.”
Trade
lawyers say importers are likely to get money back – eventually. “It’s going to
be a bumpy ride for awhile,” says Joyce Adetutu, a partner at the Vinson +
Elkins law firm.
The
refund process is likely to be hashed out by a mix of the US Customs and Border
Protection agency, the specialized court of international trade in New York and
other lower courts, according to a note to clients by lawyers at the legal firm
Clark Hill.
“The
amount of money is substantial,” Adetutu says. “The courts are going to have a
hard time. Importers are going to have a hard time.’’
What have
the UK and the EU said?
The UK’s
Department for Business and Trade (DBT) said the ruling did not affect the
preferential deal the UK negotiated on steel, automobiles (10% down from 27.5%)
and pharma, which has zero tariffs compared with 15% in the EU.
“The UK
enjoys the lowest reciprocal tariffs globally, and under any scenario we expect
our privileged trading position with the US to continue. We will work with the
administration to understand how the ruling will affect tariffs for the UK and
the rest of the world,” said a spokesperson for the DBT.
The
European Commission trade spokesperson, Olof Gill, said it was analysing the
ruling “carefully”.
“Businesses
on both sides of the Atlantic depend on stability and predictability in the
trading relationship. We therefore continue to advocate for low tariffs and to
work towards reducing them,” he added.
The
German confederation of industries, BDI, said the ruling sent a “strong signal
for the rules-based trade order”.
Can the
EU-US trade deal be paused again by MEPs?
The EU
parliament has yet to ratify a deal struck in Scotland last year and may well
decide to pause it again on fresh legal grounds.
MEPs
paused and then unpaused it amid the diplomatic row over tariff threats related
to Trump’s bid to take over Greenland.
A formal
vote of the International Partnership Committee is due on Tuesday, followed by
a session of all MEPs, expected in early March.
With
Associated Press
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