President Donald Trump on Friday (Feb 20, 2026) vowed to impose a 10% tariff on all imports into the United States, after the Supreme Court handed him a stern rebuke by striking down his signature economic policy.
A 1977 law called the International Emergency Economic Powers Act (IEEPA), Mr. It is based on the fact that Trump “does not authorize the president to impose tariffs.”
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Mr. Trump, who nominated two justices who rejected him, reacted strongly, accusing the court of influencing the court with foreign interests without evidence.
“I am ashamed, absolutely ashamed, of certain members of the court for not having the courage to do what is right for our country,” Trump told reporters.
Mr Trump has said he would use special authority to impose a flat 10% tariff – after he spent the past year punishing other countries by imposing different rates abruptly.
“To protect our country, a president can actually levy higher tariffs than I have levied in the past,” Mr Trump said, insisting the ruling made him “more powerful”.
A major setback
The ruling did not affect Trump’s separate sector-specific tariffs on imports of steel, aluminum and several other goods. Several government investigations are in the works that could lead to more sectoral tariffs.
Still, it marked Mr Trump’s biggest defeat at the Supreme Court since returning to the White House last year.
Mr. While Trump has long relied on tariffs as a lever for diplomatic pressure and negotiations, he has made an unprecedented use of emergency economic powers in his second term to slap new duties on virtually all US trading partners.
There are “reciprocal” tariffs on trade practices that Washington deems unfair, along with special duties targeting key partners Mexico, Canada and China on illegal drug flows and immigration.
The court said on Friday (February 20, 2026) that if Congress had “intended to convey the exclusive and extraordinary power to impose tariffs” with the IEEPA, it “would have done so expressly, as is consistent with other tariff laws.”
The Supreme Court’s three liberal justices joined three conservatives in a ruling Friday (Feb. 20, 2026) that upheld lower court decisions that Mr. Trump’s tariffs under the IEEPA were illegal.
Mr. Trump heaped praise on Brett Kavanaugh, the only justice who voted with him. Mr. Kavanagh was joined in his dissent by fellow conservatives Clarence Thomas and Samuel Alito.
In his opinion, Chief Justice John Roberts said, “The IEEPA contains no reference to tariffs or duties.”
‘Much needed certainty’
Business groups largely cheered the ruling, with the National Retail Federation saying it “provides much-needed certainty” to American firms and manufacturers.
“We urge the lower court to ensure a seamless process for duty refunds to US importers,” the federation said.
But the judges did not address the extent to which importers would get refunds. There is a possibility of a legal battle over this.
The process – as acknowledged during oral arguments – can be “messy”, Mr. Kavanagh warned.
EY-Parthenon Chief Economist Gregory Daco said AFP The loss of IEEPA tariff revenues to the US government could be as much as $140 billion.
Delighted Democratic leaders lashed out at the ruling, with Senate Minority Leader Chuck Schumer hailing it as a “victory for the wallets” of US consumers.
But Elizabeth Warren, the top Democrat on the Senate Banking Committee, warned that there is “no legal mechanism for consumers and many small businesses to recover the money they have already paid.”
The Budget Lab at Yale University estimates that consumers will see an average effective tariff rate drop of 9.1% from 16.9% with Friday’s (February 20, 2026) decision.
But it says it is the “highest since 1946” except for 2025.
constrained ambition
The European Union said it was studying the court ruling and would continue to stay in close contact with the Trump administration.
Britain plans to work with the United States on how the decision will affect the trade deal between the two countries, but Canada affirms that Mr Trump’s tariffs are “unfair”.
California Governor Gavin Newsom, Mr. Trump, who is widely expected to run for the Democratic presidential nomination, has called for refunds to Americans for “illegal cash grabs.”
“Every dollar illegally taken must be returned immediately – with interest. Cough!”
