On February 20, 2026, the Supreme Court ruled in Learning Resources v. Trump that tariffs imposed by President Donald Trump exceeded his authority under the 1977 International Emergency Economic Powers Act.

Three conservative Justices, Chief Justice John Roberts and Justices Amy Coney Barrett and Neil Gorsuch, joined the court’s three liberals in the 6-3 majority.

Chief Justice Roberts wrote in his opinion, “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 the asserted authority, he must identify clear congressional authorization to exercise it.”

The ruling doesn’t apply to national security tariffs imposed on specific industries, including automobiles and auto parts, steel and aluminum, copper and softwood lumber.

Since the trade agreements Trump has been making with other countries involved relief from high tariffs, those agreements could be reopened.

The Court’s ruling didn’t include whether or how about $175 billion collected from the tariffs would be refunded. According to Treasury Secretary Scott Bessant, a lower court will need to decide the issue. “The Supreme Court remanded it down to a lower court. And, you know, we will follow what they say, but that could be weeks or months.”

The Tariff Refund Act of 2026 has been introduced by Democrats in the Senate and the Restoring Economic Lifelines for Independent Enterprises and Family Business Act has been introduced by Democrats in the House of Representatives, which would require refunding the tariffs plus interest, eliminating the need for individual applications or formal protests. Since the Democrats don’t have control of the Senate or the House and President Trump is unlikely to approve these proposals, they probably won’t be enacted.

Meanwhile, about 1,000 companies have filed protective refund lawsuits, including Costco. FedEx filed for a refund on February 23. Maybe there will be a class action lawsuit to reduce legal expenses of recovering tariffs paid?

President Trump is furious with the Supreme Court’s ruling. “The Supreme Court’s ruling on tariffs is deeply disappointing, and I’m ashamed of certain members of the Court — absolutely ashamed — for not having the courage to do what’s right for our country.”

President Trump believes the Supreme Court has left the possibility of using alternative theories to continue broadly imposing tariffs. Trump and his team had a “Plan B” ready to implement.

Immediately after the Supreme Court ruling on February 20, President Trump signed an Executive Order imposing a 10% tariff on worldwide imports to the United States under Section 122 of the Trade Act of 1974, effective February 24, 2026. Less than 24 hours later, he announced the tariff to be increased to 15%, the maximum under Section 122. Under Section 122, the tariff may be imposed for up to 150 days, unless Congress agrees to extend it. Since Section 122 has never been invoked before, it’s unknown if Trump could invoke it again after the 150 days expires.

Exemptions apply for the 15% tariff that are similar to those that were invalidated by the Supreme Court, with carve outs for specific products within sectors such as energy, pharmaceuticals, autos, and aerospace, and shielding goods from North American neighbors under the U.S. Mexico-Canada Agreement, which was signed by President Trump during his first term.

It isn’t clear that President Trump has the authority to impose tariffs under Section 122 of the Trade Act of 1974. The tariffs were meant to be imposed when the United States faces “fundamental international payments problems” requiring emergency action. The legislation was enacted when the United States suffered a balance of payments problem under fixed currency exchange rates that were later replaced with floating currency exchange rates.

Three circumstances qualify for the temporary surcharge: (1) dealing with “large and serious United States balance-of-payments deficits”; (2) preventing “an imminent and significant depreciation of the dollar in foreign exchange markets”; or (3) cooperating with other countries “in correcting an imbalance in international payments.”

Note that trade deficits aren’t included on the list.

Section 122 was written for something specific: a crisis where a country is running out of the foreign exchange or gold reserves needed to honor it’s international obligations. That was the world scenario during 1971.

According Bill Riley, director of the Free Trade Initiative, “Section 122 only makes sense under a fixed exchange rate, which hasn’t existed in the U.S. in more than 50 years.” The economic conditions for Section 122 can’t arise under the current monetary system.

It seems likely the 15% tariff will be litigated and, in light of the Supreme Court’s ruling in Learning Resources v. Trump, could be subjected to emergency court injunctions.