The Supreme Court's 2026 ruling against emergency tariffs, and what replaced them

On February 20, 2026, the Supreme Court of the United States ruled 6 to 3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act, a 1977 law known as IEEPA, "does not authorize the President to impose tariffs." The case, argued on November 5, 2025, was decided together with Trump v. V.O.S. Selections. It removed the legal footing for the tariffs the President had imposed under that law in 2025. The same day, he ended those duties and turned to other trade laws, and the tariffs in place since then rest on them.

The tariffs at issue

Early in 2025 the President declared national emergencies over two threats, according to the syllabus of the decision: the flow of illegal drugs from Canada, Mexico and China, and "large and persistent" trade deficits. Under IEEPA he imposed a 25% duty on most imports from Canada and Mexico and 10% on most imports from China, and then a "reciprocal" duty of at least 10% on imports from all trading partners, with higher rates for dozens of countries. Two small businesses challenged the tariffs in the federal district court for the District of Columbia, and five small businesses and 12 states sued in the Court of International Trade. The Federal Circuit, sitting as a full court, had already ruled against the tariffs.

What the majority held

Writing for the Court, Chief Justice Roberts noted that IEEPA gives the President a long list of powers over imports and exports, including the power to "regulate" them, but never mentions tariffs or duties. When Congress grants the power to impose tariffs, he wrote, it does so clearly and with careful limits. Tariffs are a form of taxation, a power the Constitution gives to Congress. Reading "regulate" to include taxes would also make the law partly unconstitutional, the opinion says, because the Constitution forbids taxes on exports. Three justices in the majority also relied on the major questions doctrine; Justices Kagan, Sotomayor and Jackson reached the same result on ordinary reading of the statute.

What the dissent said

Justice Kavanaugh, joined by Justices Thomas and Alito, would have upheld the tariffs. "Like quotas and embargoes, tariffs are a traditional and common tool to regulate importation," he wrote. He pointed to President Nixon's 10% tariff on almost all imports in 1971, imposed under IEEPA's predecessor and upheld in court, and argued that it made little sense to read the law as letting a President block all imports from a country but not charge even a $1 tariff. He added that other statutes might justify most or all of the same tariffs. He also wrote that the refund process, as was acknowledged at oral argument, is likely to be a "mess," and that some importers may already have passed costs on to consumers. Justice Thomas also wrote a separate dissent.

The replacements announced the same day

In Executive Order 14389, also dated February 20, 2026, the President ordered that the IEEPA duties under nine earlier orders "shall no longer be in effect" and that collection stop as soon as practicable. Besides the drug-trafficking and reciprocal tariffs, the list included duties tied to Brazil, Russia, Cuba, Iran and countries importing Venezuelan oil. The order left the declared national emergencies in place and did not touch tariffs imposed under Sections 232 and 301 of the trade laws. A companion order, Executive Order 14388, kept the suspension of duty-free "de minimis" treatment for all countries.

Proclamation 11012 imposed a 10% surcharge on imports from February 24, 2026, under Section 122 of the Trade Act of 1974, which allows a surcharge of up to 15% for no more than 150 days unless Congress extends it. The proclamation cites a "large and serious" balance-of-payments deficit, including a goods trade deficit its advisers put at about $1.2 trillion in both 2024 and 2025. It exempted products including certain critical minerals, energy, pharmaceuticals, certain electronics, passenger vehicles and parts, some farm goods such as beef, tomatoes and oranges, goods subject to Section 232 tariffs, and goods that enter duty-free from Canada and Mexico under the United States-Mexico-Canada Agreement. It was set to run until 12:01 a.m. on July 24, 2026.

What has applied since July 24

On March 12, 2026, the U.S. Trade Representative opened investigations under Section 301 of the Trade Act into 60 economies, examining whether each fails to ban or effectively enforce a ban on imports made with forced labor. On June 2 the Trade Representative found the practices of all 60 actionable, and in a memorandum of July 23 the President directed tariffs. The Trade Representative's notice applies them to goods entered from 12:01 a.m. on July 24, 2026, the same moment the surcharge was set to end.

Goods of 17 economies, including Canada, Mexico, India and the United Kingdom, face a 10% tariff. For the European Union and Taiwan, the tariff tops up the normal duty to 10% in total, and for Japan, South Korea and Switzerland to 12.5%. Goods of the other investigated economies, China among them, face 12.5%. Some products are exempt, such as raw materials that could otherwise become unavailable. A Federal Register search on November 11, 2026, found no later notice from the Trade Representative changing these rates, and no later document changing or extending the surcharge. Separately, the Federal Register lists further presidential actions in 2026 on particular goods, including proclamations "adjusting imports" of pharmaceuticals in April and of robotics and industrial machinery in October, and, for certain Canadian motor vehicles, dairy and alcoholic beverages, proclamations whose titles show additional duties in July, a temporary suspension of them in August and import exclusions in September.

Refunds go to importers

U.S. Customs and Border Protection says the ruling made unlawful all the IEEPA tariffs it had collected since February 3, 2025. It estimates the IEEPA duties assessed from then to February 24, 2026, at $166 billion, spread over more than 53 million entry summaries. In its latest notice on the subject, published October 5, Customs said the Court of International Trade had ordered refunds with interest, first in one case in March and then in a test case in April, but that the order was suspended "to the extent that it requires immediate compliance" while Customs developed an automated system, called CAPE, to handle the volume.

The same notice says refunds requested through CAPE are deposited directly into the account of the importer of record, or of a party the importer designates. It does not describe any payment to consumers. Comments on the refund worksheet were due on November 4.