The US Supreme Court ruling of February 20, 2026, caused considerable confusion and uncertainty in the markets. At its core, the court ruled in a 6:3 decision that President Trump exceeded his authority by invoking the International Emergency Economic Powers Act (IEEPA) of 1977 to impose comprehensive tariffs. The IEEPA does not authorize the president to levy tariffs as taxes, as this power lies solely with Congress. The ruling affects not all tariffs from the Trump era, but primarily those imposed under the IEEPA, such as the 25 percent tariffs on imports from Canada, Mexico and China, as well as the “reciprocal” tariffs on imports from nearly all countries. Other tariffs based on separate laws (e.g. on steel and aluminum under Section 232) remain unaffected.
Immediate Consequences of the Tariff Ruling
The immediate consequence is that the US Customs Service (Customs and Border Protection) has immediately ceased collecting these illegal tariffs. Estimates suggest that the affected tariffs alone generated over 142 billion US dollars in 2025. The question now is whether importers can apply for refunds – experts estimate possible refunds of up to 175 billion US dollars. In the long term, the ruling could create a hole of up to 2 trillion US dollars in expected tariff revenue, further fueling the budget deficit and raising questions about the financing of tax cuts and infrastructure.
Reactions of the US Government
Trump and the US administration reacted quickly: Just hours after the ruling, Trump announced that the tariffs would be reimposed under other laws. On February 21, he already issued a provisional 10 percent global import tax under Section 122 of the Trade Act of 1974, which he raised to 15 percent on February 23. Section 122 allows temporary tariffs for a maximum of 150 days to allow time for further negotiations or legislation. Trump praised the dissenting opinion of Justices Kavanaugh, Thomas and Alito, who considered his tariffs legal, and emphasized that there were “many methods, statutes and authorities” to continue his trade policy. The administration sees the ruling as confirmation of its line and does not rule out further steps, which further increases uncertainty.
EU Commission Suspends Tariff Agreement with the USA
On the international stage, the EU reacted promptly: The EU Commission has temporarily suspended the implementation of the tariff agreement with the USA, which had provided for a uniform 15 percent tariff rate. This decision has led to criticism from the business community: Industry associations fear that the trade conflict will flare up again and global supply chains will suffer. China's Ministry of Commerce has called on the USA to “lift all unilateral tariffs,” while countries such as India, Indonesia and Malaysia have put their recently concluded trade deals with the USA on hold or are reviewing them. Japan described the situation as a “real mess.” The general mood fluctuates between hope for negotiations and panic over a new trade war that could burden the global economy – especially at a time when inflation and growth risks are already high.
Overall, there is confusion because the ruling does not affect all tariffs and Trump is immediately pulling new levers. Markets are reacting volatilely: Gold benefits as a safe haven, the dollar and indices are suffering from the uncertainty. Medium-term, much depends on Congress's reaction: Will it approve new tariffs, or will an internal conflict break out? For traders and investors, the situation remains unpredictable, but the ruling signals that presidential power in trade policy has limits.
