Breaking News: Supreme Court strikes down Trump tariffs

• The Supreme Court struck down a huge chunk of President Donald Trump’s far-reaching tariff agenda.
• The law that undergirds those import duties “does not authorize the President to impose tariffs,” the majority ruled six to three.
• Chief Justice John Roberts delivered the opinion of the court. Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh dissented.

https://www.cnbc.com/2026/02/20/supreme-court-trump-tariffs-ruling.html

On February 20, 2026, the U.S. Supreme Court issued a 6-3 ruling striking down a significant portion of President Donald Trump’s sweeping tariffs. These tariffs were imposed using the International Emergency Economic Powers Act (IEEPA) of 1977, which the Court ruled does not authorize the president to impose tariffs. Chief Justice John Roberts wrote the majority opinion, joined by Justices Amy Coney Barrett, Neil Gorsuch, and the Court’s three liberal justices. Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh dissented.

The decision invalidates tariffs enacted under IEEPA, including:

• “Reciprocal” tariffs applied to dozens of trading partners (often described as addressing trade deficits declared a national emergency).
• Tariffs on goods from Canada, Mexico, and China (initially tied to a declared emergency over fentanyl and drug trafficking, with rates like 25% on Canada, later increased in some cases to 35%).

This does not affect all tariffs—those imposed under other authorities (e.g., Section 232 for national security or Section 301 for unfair trade practices) remain in place, and the administration may seek to shift or reimpose measures under alternative laws.

Impact on the United States:

• Economic relief for consumers and businesses — These tariffs had raised import costs, contributing to higher prices for goods and inflation pressures. Striking them down could lower costs for American importers, manufacturers reliant on foreign inputs, and consumers. Estimates suggest over $175 billion in collected duties may now face refund claims from importers.
• Broader economic effects — Prior tariffs were projected to generate substantial revenue (hundreds of billions over a decade) but also imposed costs estimated in the trillions long-term due to higher prices and disrupted supply chains. The ruling removes a major source of uncertainty that had spooked markets and businesses.
• Policy setback — This represents a rare rebuke from the conservative-leaning Court to Trump’s executive power expansion on trade, a core part of his economic agenda. It limits unilateral presidential tariff authority under emergency laws, reinforcing Congress’s constitutional role in levying duties.
• Potential next steps — The administration could pivot to other legal bases for tariffs, though those often require more process, justification, or congressional involvement, potentially slowing implementation.

Impact on Canada:

• Significant positive development — Canada faced targeted high tariffs (e.g., 25-35% on various goods) under the fentanyl-related emergency declaration, straining cross-border trade. The ruling eliminates these IEEPA-based duties, easing pressure on Canadian exporters (especially in sectors like autos, energy, steel, and agriculture integrated with U.S. supply chains via the USMCA).
• Trade relationship stabilization — The tariffs had heightened tensions and prompted retaliatory measures or diplomatic friction. Removing them reduces immediate economic harm to Canadian businesses and consumers, potentially lowering costs for goods flowing both ways and supporting jobs in export-dependent industries.
• Broader context — While USMCA provides some baseline protections, the struck-down tariffs went beyond standard frameworks. Canada (along with Mexico) benefits from restored predictability in North American trade, though other U.S. tariffs (if reimposed differently) could still pose risks.

Overall, the ruling curbs aggressive unilateral trade actions, likely benefiting integrated economies like those of the U.S. and Canada by reducing artificial trade barriers and costs in the short term. Markets and businesses may see immediate relief, though long-term trade policy remains fluid as the administration responds.