On February 20th, 2026, the Supreme Court heard a case regarding President Trump’s controversial tariffs on China, Canada, Mexico, and other US trade partners. Their ruling changed the status of these tariffs and established precedents on executive power regarding tariffs.
These tariffs imposed on key US trade partners in February 2025 and April 2025 were based on the powers given to the president by the International Emergency Economic Powers Act (IEEPA) of 1977, which gave the president the power to regulate trade, block assets, and impose sanctions following the president declaring a state of emergency based on an “unusual or extraordinary” foreign threat to national security, foreign policy, or the economy.
President Trump declared a state of emergency, citing trade deficits with key trade partners as a foreign threat to the economy, which, in the eyes of the president, “led to the hollowing out” of the US manufacturing base and eroded critical supply chains here in the US. As for China, President Trump justified duties on Chinese goods to fight back against the fentanyl crisis here in the US, saying the tariffs were penalties against China for failing to stop the illegal flow of the substance between the US and China.
However, the Supreme Court would look over the legality of these tariffs in the case, Learning Resources, Inc. v. Trump. This case, an accumulation of smaller cases between small businesses heavily affected by the tariffs imposed by President Trump and the federal government, would lead to the Supreme Court case on the 20th of February 2026. The court had to consider one question: Does the IEEPA authorize the president to impose tariffs in response to national emergencies?
Over much deliberation and a 6-3 decision, the court would rule against the president and his tariffs. The courts would look at the use of tariffs as a tool of the president in the face of situations the IEEPA aims to deal with. Tariffs are a form of taxation on foreign goods, this power of taxation being reserved for Congress, not the president. The Supreme Court had to consider whether the executive can overstep the powers of the legislative under the basis of a national emergency, which the Court decided not to maintain the system of checks and balances within our federal government.
Following the Supreme Court’s decision, many businesses wondered what was next and whether they would receive any refunds or compensation for the tariffs they had paid over the past year, with most estimates pointing to tariffs costing American businesses 175 billion dollars in the past year.
The Supreme Court left the matter to the lower courts, where it was picked up by the U.S Court of International Trade based in New York City. Judge Richard Eaton, overseeing the tariff case Atmus Filtration, Inc. v. The United States on March 4, 2026, would rule that all importers affected by President Trump’s IEEPA tariffs are entitled to benefits according to the Supreme Court’s decision in the Learning Resources, Inc. case. Judge Eaton would also order that imports yet to be finalized through customs must not be subjected to the IEEPA tariffs; furthermore, any imports finalized in the past 90 days from the Atmus Filtration ruling would have to re-enter the final custom assessment, which should result in a refund.
As for any imports outside the 90-day window, many businesses are left doubtful they will see any refund on those imported goods. However, further developments continue to be made following the rulings made by the Supreme Court and Judge Eaton, with lawmakers and legal experts speculating and planning how businesses can be compensated for the costly IEEPA tariffs.
President Trump was not deterred by the decisions of the Supreme Court, with Trump issuing new tariffs under Section 122 of the Trade Act of 1974, which allows the president to impose tariffs up to 15% on foreign importers for the next 150 days to address serious deficits or devaluation in currency. However, on March 5, 2026, 24 governors and state attorneys general would file lawsuits against Trump’s tariffs, citing that the requirements to impose tariffs laid out in Section 122 were not met, and that the new tariff President Trump would impose goes beyond what is allowed under Section 122.
