Supreme Court Strikes Down Reciprocal Tariffs

Alert

February 20, 2026

On Friday, February 20, 2026, the Supreme Court struck down President Trump’s sweeping reciprocal tariffs, dealing a major blow to the administration’s economic policy.

The Decision

The Supreme Court’s decision in the consolidated cases Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections found the International Emergency Economic Powers Act (IEEPA) “does not authorize the President to impose tariffs.”

In its opinion, the Supreme Court explains that the Constitution grants Congress the authority “to lay and collect Taxes, Duties, Imposts and Excises.” The Court emphasizes the Framers gave “‘Congress alone’ the power to impose tariffs during peacetime” and that “the President must ‘point to clear congressional authorization’ to justify his extraordinary assertion of that power.” The Court concludes that “when Congress grants the power to impose tariffs, it does so clearly and with careful constraints. It did neither here.”

Chief Justice John Roberts authored the 6-3 opinion, joined by fellow conservative Justices Amy Coney Barrett and Neil Gorsuch, along with the Court’s three liberal justices, Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson.

Impacted Tariffs

Only the tariffs implemented under IEEPA, the reciprocal tariffs targeting a large and persistent trade deficit, and those tied to the fentanyl crisis, are impacted by the decision. The Section 232 tariffs on products that have been found to threaten national security and the Section 301 tariffs on China are not impacted by the ruling and will remain in place.

Potential Refunds

The Supreme Court’s decision does not address how refunds will work, as the Court of International Trade will oversee that process.

Justice Kavanaugh, in his dissenting opinion commented: “The United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others.” And goes on to say the “process is likely to be a ‘mess.’”

Once a procedure is established, importers will likely need to file claims with U.S. Customs and Border Protection (CBP), a process that could be complex and take months or years to complete.

How Much is at Stake?

The CBP’s latest data shows $133.5 billion in IEEPA tariffs have been collected through October 31, 2025. However, on the day of the decision, the Penn Wharton Budget Model, estimated the amount of IEEPA tariffs collected to date to be more than $175 billion.

Cherry Bekaert will continue to bring you the latest on refund procedures, as developments occur.

Potential New Tariffs

The Trump administration has previously indicated if the Supreme Court ruled that the president exceeded his authority, it would pursue alternative mechanisms to maintain tariffs. The president could choose to pursue:

Section 122 Tariffs: Under Section 122 of the Trade Act of 1974, the president may impose temporary and limited tariffs of up to 15% for up to 150 days to address balance-of-payment deficits or depreciation of the U.S. dollar.
Section 232 Tariffs: Under Section 232 of the Trade Expansion Act of 1962, the president may impose tariffs to target imports that threaten national security after a Department of Commerce investigation. Trump has already used Section 232 to implement tariffs on products such as steel and aluminum, car imports, copper, lumber and timber, and certain semiconductors.
Section 301 Tariffs: Under Section 301 of the Trade Act of 1974, the president may implement tariffs to target unreasonable or discriminatory trade practices by foreign governments after a U.S. Trade Representative investigation.
Section 338 Tariffs: Under the Tariff Act of 1930, the president may impose retaliatory tariffs on foreign governments that discriminate against U.S. commerce. The duties can reach up to 50% and require a 30-day notice.

At the time of publication, President Trump has state he intends to sign an executive order reimposing at 10% global tariff; however, no action has been taken yet.