$150 Billion Refund Shock: President Trump’s Tariffs Ruled Illegal By Supreme Court of the United States
SCOTUS 6-3 Ruling Crushes Trump’s Global Tariff Plan, Supreme Court Strikes Down Trump’s Tariffs in 6-3 Bombshell.
The Supreme Court of the United States delivered a landmark 6-3 ruling on February 20, 2026, declaring that President Donald Trump’s sweeping global tariffs were illegal.
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The decision centered on the administration’s use of the International Emergency Economic Powers Act (IEEPA), a 1977 law intended for regulating transactions during declared national emergencies. Chief Justice John Roberts authored the majority opinion, joined by the three liberal justices (Sotomayor, Kagan, and Jackson) along with conservative justices Barrett, Gorsuch, and Roberts himself, asserting that IEEPA does not grant the president authority to unilaterally impose broad tariffs on imports from numerous countries.
This marked a rare rebuke from the conservative-leaning court, emphasizing that the Constitution assigns Congress the power to regulate commerce and impose taxes, including tariffs.The ruling invalidates a significant portion of Trump’s tariff regime, particularly those enacted under IEEPA as part of his “Liberation Day” initiative starting in 2025, which targeted trade deficits and issues like fentanyl flows as national emergencies. While not all tariffs were affected—such as those under Section 232 (national security) or Section 301 (unfair trade practices)—the decision halts the collection of duties on a wide array of imports from partners including Canada, Mexico, China, the EU, Japan, and others. Conservative dissenters, including Justices Thomas, Alito, and Kavanaugh, argued against the majority’s interpretation, with Kavanaugh warning of practical chaos in implementation.
The outcome reinforces limits on executive overreach in trade policy and could reshape future presidential authority in economic matters.The financial fallout is substantial, with estimates indicating the U.S. government could face $130–175 billion in potential refunds to importers who paid the now-invalidated duties since their imposition. The Treasury has collected tens to hundreds of billions in tariff revenue under these measures, much of which was passed on to consumers and businesses through higher costs. The Court provided no direct guidance on refunds, leaving that process to lower courts, the Treasury Department, or U.S. Customs and Border Protection, potentially leading to complex litigation. This development has sparked market reactions, including stock rallies in some sectors, while raising questions about replacing lost revenue and the broader economic impacts of unwinding these policies.
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