The U.S. Supreme Court delivered a historic blow to former President Donald Trump's trade agenda on February 21, 2026, ruling his use of emergency powers to impose sweeping global tariffs unconstitutional. The 6–3 decision immediately nullified tariffs enacted under the International Emergency Economic Powers Act (IEEPA), reigniting political clashes and market volatility as Trump swiftly announced replacement measures.
Chief Justice John Roberts emphasized that presidents cannot unilaterally levy taxes without explicit congressional approval, rejecting Trump's interpretation of IEEPA as an overreach. Within hours, Trump invoked Section 122 of the Trade Act of 1974 to implement a 10% 'global tariff' effective February 24 – marking the first use of this provision in U.S. history. The temporary measure lasts 150 days unless extended by Congress.
Domestic reactions split sharply: business groups praised the court's clarity, while Democrats demanded refunds for $129 billion in IEEPA-related duties collected through 2025. Internationally, EU trade chair Bernd Lange called the ruling a 'victory for rule of law,' though analysts warn the new tariffs could prolong supply chain disruptions.
Market analysts caution that uncertainty persists, with the Federal Reserve estimating U.S. consumers bore 90% of tariff costs in 2025. Legal challenges to Trump's latest order are anticipated, while unresolved questions about duty refunds may spark further litigation.
