Friday, February 20, 2026 from CTDA

In a 6-3 decision, the Supreme Court (SCOTUS) ruled that President Trump does not have authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). The opinion is authored by Chief Justice Roberts, with concurring opinions by Justices Gorsuch, Justice Barrett, and Jackson, and dissenting opinions by Justices Thomas and Kavanaugh. The 170-page decision can be found here.

*Initial information is below and we will continue to provide more information for NAW members as it becomes available. At the time of writing, the President has not yet weighed in on the decision.

NAW’s statement on the SCOTUS decision, which calls on the government to swiftly provide refunds to American businesses can be found here.

The SCOTUS decision overturns the country-by-country reciprocal tariffs imposed on dozens of trading partners but does not address the sector specific tariffs imposed under Section 232 on products such as steel, aluminum, lumber, and pharmaceuticals.

The Court finds that imposing tariffs is clearly a taxing power and that there is no legal basis or congressional authority to suggest that IEEPA authorizes this. While IEEPA authorizes a president to regulate importation, the Court finds that this is different from taxing authority as evidenced by the fact that no president has previously used IEEPA to impose tariffs.

An estimated $175 billion in tariff revenue is to be refunded, although the SCOTUS case does not directly address this. Justice Kavanaugh’s dissenting opinion briefly touches on refunds:

“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. As was acknowledged at oral argument, the refund process is likely to be a ‘mess’”.

What’s Next? Administration officials have previously said they have a backup plan if SCOTUS strikes the IEEPA tariffs down. National Economic Council Director Kevin Hassett has said the President could impose temporary, 10% across the board tariffs under Section 122 of the Trade Act of 1974, which can remain in effect for up to 150 days to address “emergency trade imbalances”.

Any extension of these tariffs requires an act of Congress, so this would be a temporary measure. Hassett has indicated that these tariffs would be a bridge to imposing further tariffs under other statutes such as Section 301 and Section 232 including more sector specific tariffs.

President Trump has also previously called for a “tariff dividend” of $2,000 per person with the revenues collected from IEEPA tariffs. It is possible that the Administration puts pressure on Congress to pass legislation providing authority to give the president additional tariff authority and provide checks to Americans.

It is also unclear how this decision will impact the many trade deals that President Trump has negotiated with other trading partners in part, by threatening IEEPA tariffs and offering lower tariff rates in exchange for zero or low tariffs on U.S exports, increased market access for U.S. products, and foreign investments in the U.S. The SCOTUS decision removes some, but not all, of the concessions offered by the Administration to foreign trading partners.

Questions? Please email NAW’s Vice President for Government Relations Alex Hendrie at [email protected]

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