Supreme Court Stops Businesses' Tariff Turbulence, But More Duties May Loom

On Friday, February 20, 2026, the United States Supreme Court published its landmark decision in Learning Resources, Inc. v. Trump.[1] This 6-3 ruling sharply limits executive authority – at least for now – over trade policy and reaffirms Congress’s constitutional role over taxation and tariffs, invalidating the Trump administration’s tariff regime.

Tariff Turbulence: Supreme Court Stops Businesses' Tariff Turbulence, But More Duties May Loom

I. Background

At its core, Learning Resources required the Supreme Court to determine whether Congress had authorized the President, through the International Emergency Economic Powers Act (“IEEPA”), to impose tariffs in response to asserted national emergencies.

In Learning Resources, the question presented before the Court was whether IEEPA authorized the President to impose tariffs.[2] After taking office, President Trump sought to invoke his authority under IEEPA to address two foreign threats.[3] “The first was the influx of illegal drugs from Canada, Mexico, and China,” in which the Trump administration determined “had ‘created a public health crisis.]’”[4] “The second was ‘large and persistent’ trade deficits[,]” which was determined had “‘led to the hollowing out’ of the American manufacturing base and ‘undermined critical supply chains[.]’”[5] To “deal with each threat[,]” President Trump imposed a “25% duty on most Canadian and Mexican imports and a 10% duty on most Chinese imports.”[6]

The administration’s defense of the tariff regime depended entirely on statutory delegation, not inherent executive power.

Before the Supreme Court, the Trump administration relied on IEEPA authority to defend this tariff policy, as it conceded, “as it must, that the President enjoys no inherent authority to impose tariffs during peacetime.”[7] This is because Article I, Section 8 of the Constitution specifies that “[t]he Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises[,]” and it is well established that “[t]he power to impose tariffs is very clear[ly] . . . a branch of the taxing power.’”[8] Because the administration’s position involved the purported delegation of this “core congressional power of the purse,”[9] the Court held that “the President must ‘point to clear congressional authorization’ to justify his extraordinary assertion of the power to impose tariffs.”[10] 

The Court ultimately concluded that IEEPA’s text does not supply the clear authorization required to transfer Congress’s taxing power to the President. IEEPA authorized the President to “investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit . . . importation or exportation.”[11] The Court noted that “[a]bsent from this lengthy list of powers is any mention of tariffs or duties[,]” which was notable “in light of the significant but specific powers Congress did go to the trouble of naming[,]” reasoning that “had Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly – as it consistently has in other tariff statues.”[12] Affirming the United States Court of Appeals for the Federal Circuit decision to invalidate President Trump’s IEEPA tariffs, the Court concluded the following:

The President asserts the extraordinary power to unilat­erally impose tariffs of unlimited amount, duration, and scope. In light of the breadth, history, and constitutional context of that asserted authority, he must identify clear congressional authorization to exercise it. IEEPA’s grant of authority to “regulate . . . importation” falls short. IEEPA contains no reference to tariffs or duties. The Government points to no statute in which Congress used the word “regulate” to authorize taxation. And until now no President has read IEEPA to confer such power. We claim no special competence in matters of economics or foreign affairs. We claim only, as we must, the limited role assigned to us by Article III of the Constitution. Ful­filling that role, we hold that IEEPA does not authorize the President to impose tariffs.

II. The President’s Future Tariff Plans

Although the Court invalidated tariffs imposed under IEEPA, it did not eliminate other statutory pathways for imposing trade restrictions. The Supreme Court's invalidation of tariffs applies only to those imposed under IEEPA, not to all tariffs. Shortly after the Supreme Court’s decision, U.S. Trade Representative Jamieson Greer announced that the administration would “[i]mmediately impose a temporary 10 percent surcharge on articles imported into the United States[.]”[13] Under Section 122 of the Trade Act of 1974, the President is authorized to address “large and serious United States balance-of-payments deficits” by proclaiming an import surcharge.[14] However, Section 122 tariffs cannot exceed one hundred fifty (150) days – until July 2026 – without further action from Congress.[15]

In parallel, the administration signaled its intention to pursue broader, potentially longer-lasting tariff authority through Section 301 investigations. Accordingly, Representative Greer also stated the President intended to accelerate “several investigations under Section 301 of the Trade Act of 1974” that could “cover most major trading partners” in relation “to the trade in seafood, rice, and other products.[16] Pursuant to this statute, the Office of the U.S. Trade Representative has the power to initiate an investigation into unfair practices of foreign governments, and if it is found that “an act, policy, or practice of a foreign country – (i) violates or is inconsistent with, the provisions of, or otherwise denies benefits to the United States under, any trade agreement, or (ii) is unjustifiable and burdens or restricts United States commerce[,][17] then certain retaliatory measures are permitted, expressly including imposing duties and tariffs.[18]

III. Conclusion

The United States Supreme Court’s decision in Learning Resources creates both immediate clarity and continued uncertainty for U.S. businesses involved in global trade. While the ruling curtailed President Trump’s efforts to impose broad tariffs, the administration’s prompt invocations of other statutory authority demonstrate that substantial trade restrictions will likely remain. For U.S. businesses, this evolving landscape means the potential for price volatility, contractual exposure, compliance obligations, and strategic sourcing decisions, and businesses that stay ahead of these developments may be better positioned to mitigate this risk. To navigate this shifting terrain, informed legal guidance is essential to maintain a competitive position in an increasingly complex, global marketplace.

[1] 607 U.S. _____ (2026).

[2] Id. at 1.

[3] Id. at 2.

[4] Id. (quoting Exec. Order, No. 14193, 90 Fed. Reg. 9113 (2025)).

[5] Id. (quoting Exec. Order No. 14257, 90 Fed. Reg. 15041 (2025); 90 Fed. Reg. 9113 at 15041).

[6] Id. at 3 (quoting 90 Fed. Reg. 9114, 9118, 9122-23).

[7] Id. at 6.

[8] Id. at 5-6 (quoting Gibbons v. Ogden, 9 Wheat. 1, 201 (1824)).

[9] Id. at 8.

[10] Id. at (quoting Biden v. Nebraska, 600 U.S. 477, 506 (2023)).

[11] 50 U.S.C. § 1702(a)(1)(B).

[12] Learning Resources, 607 U.S. _____ at 14.

[13] U.S. Trade Representative, Ambassador Greer Issues Statement on Supreme Court IEEPA Decision (Feb. 20, 2026), https://ustr.gov/about/policy-offices/press-office/press-releases/2026/february/ambassador-greer-issues-statement-supreme-court-ieepa-decision.

[14] 19 U.S.C. § 2132(a).

[15] Id.

[16] U.S. Trade Representative, supra n. 13.

[17] 19 U.S.C. § 2411(a)(1).

[18] Id. § 2411(c)(1)(B).