After Supreme Court tariff ruling Trump signals further executive action

SCOTUS says Trump's IEEPA tariffs are an illegal usurpation of Congressional taxation power and cannot stand

The Supreme Court's decision issued on Feb. 20, 2026, declaring President Trump's International Emergency Economic Powers Act (IEEPA) tariffs an illegal usurpation of Congressional taxation power marks a pivotal moment in the ongoing struggle over the scope of executive authority in American trade policy.

As I detailed in my earlier Daily Journal columns on this topic (see "Trump's tariff strategy tests the limits of presidential power and legal authority," May 6, 2025, and, "Trump tariffs fact a judicial reality check," June 6, 2025), at the heart of this legal battle lies the fundamental question: Does the (IEEPA) grant the President the sweeping power to impose tariffs, or are such decisions exclusively reserved for Congress by the Constitution? The Court's ruling against the administration not only rebukes an aggressive assertion of presidential power but underscores the enduring principle of separation of powers that underpins the nation's legal framework. As businesses, states, and policymakers absorb the ramifications, the broader debate over emergency powers, statutory limits and the rule of law remains far from settled.

Case overview and procedural posture

• The Court decided consolidated cases, Learning Resources, Inc. v. Trump, Case No.: 24-1287and Trump v. V.O.S. Selections, Inc., Case No.: 25-250 challenging tariffs imposed under the IEEPA.

• The question presented was whether IEEPA authorizes the President to impose tariffs.

• The District of D.C. (D.D.C) issued a preliminary injunction against the tariffs in favor of the two small business plaintiffs in Learning Resources, Inc., the Court of International Trade (CIT) granted summary judgment to the five small business and 12 State plaintiffs in V.O.S. Selections, and the Federal Circuit affirmed in relevant part.

• The Supreme Court granted the administration's certiorari (including before judgment) and consolidated the cases.

• The Court held that IEEPA does not authorize the President to impose tariffs, vacated and remanded No. 24-1287 to dismiss for lack of jurisdiction, and affirmed the Federal Circuit's judgment in Case No.: 25-250.

Procedural/Jurisdictional notes

• The Supreme Court confirmed CIT's exclusive jurisdiction over the V.O.S. Selections challenge and found the D.D.C. lacked jurisdiction in Learning Resources.

Factual background

• President Trump declared national emergencies for drug influx from Canada, Mexico, and China, and for "large and persistent" trade deficits, invoking IEEPA.

• He imposed a 25% duty on most Canadian and Mexican imports and a 10% duty on most Chinese imports to address drug trafficking.

• He also imposed at least a 10% duty on all imports from all trading partners, with higher rates for dozens of nations, to address trade deficits.

• He later issued several increases, reductions and other modifications to the tariffs.

Constitutional and statutory framework

• Article I, Section 8 of the United States Constitution assigns Congress the sole power to lay and collect taxes and duties, which clearly includes tariffs, and the Framers did not vest taxing power in the Executive.

• The Government conceded no inherent presidential peacetime authority to impose tariffs and relied solely on IEEPA's "regulate ... importation" language.

Major Questions Doctrine and Separation of Powers

• The Chief Justice, joined by Justices Gorsuch and Barrett in Part II-A-2, invoked the major questions doctrine, requiring clear authorization for highly consequential power.

• The Court found no historical precedent for using IEEPA to impose tariffs and deemed the asserted authority economically and politically significant, triggering hesitation absent clear authorization.

• The Court rejected any exception to the doctrine for emergency statutes or foreign affairs, emphasizing Congress alone holds peacetime tariff power.

Statutory interpretation of IEEPA

• IEEPA allows the President to "investigate, block ... regulate, direct and compel, nullify, void, prevent or prohibit ... importation or exportation," but omits any mention of tariffs or duties.

• The Court held "regulate" does not include taxation, noting no statute where a grant to "regulate" subsumes the taxing power, and Congress treats regulation and taxation separately.

• Reading "regulate" to include tariffs would partly render IEEPA unconstitutional because the Constitution forbids taxes on exports.

• The neighboring verbs in §1702(a)(1)(B) concern sanctions and controls, not revenue-raising, and presidential practice confirms no tariff power under IEEPA.

Rejection of counterarguments

• The Court rejected arguments that commerce-related discussions of tariffs answer the statutory question, stressing Congress speaks clearly and with constraints when delegating tariff powers.

• It rejected the spectrum argument placing tariffs between "compel" and "prohibit," holding tariffs are taxation, different in kind from IEEPA authorities.

• Reliance on the IEEPA' predecessor, the Trading with the Enemy Act (TWEA) and Court of Customs and Patent Appeals' decision in United States v. Yoshida Int'/, Inc., 526 F. 2d 560 was unpersuasive, as a single limited specialized decision did not establish a settled meaning incorporated into IEEPA.

• Wartime precedents were inapposite because the President lacks inherent peacetime tariff authority, and the inferential chain to IEEPA failed.

• Federal Energy Administration v. Algonquin SNG, Inc., 426 U. S. 548, under Section 232 and Dames & Moore v. Regan, 453 U. S. 654, did not support reading IEEPA to authorize tariffs, given Section 232's explicit duty references and the narrowness of Dames & Moore.

Opinions and concurrences/Dissents lineup

• The Chief Justice delivered the Court's opinion for Parts I, II-A-1, II-B, joined by Sotomayor, Kagan, Gorsuch, Barrett, and Jackson; Parts II-A-2 and III were joined by Gorsuch and Barrett.

• Justice Kagan, joined by Sotomayor and Jackson, concurred that IEEPA does not authorize tariffs and found the major questions doctrine unnecessary because ordinary statutory interpretation sufficed.

• Justice Barrett concurred, agreeing the best reading of IEEPA excludes tariff authority and addressing the major questions doctrine's framing.

• Justice Gorsuch concurred, endorsing application of the major questions doctrine and detailing its constitutional grounding.

• Justice Jackson concurred that IEEPA does not authorize tariffs, relying on legislative history showing Congress intended "regulate ... importation" to mean freezing or controlling foreign property transactions, not taxation.

• Justice Thomas dissented, and Justice Kavanaugh dissented joined by Thomas and Alito, but the majority's holding on IEEPA's lack of tariff authority stands.

Dissenting views (limits and potential implications)

• Justice Thomas, joined fully with Justice Kavanaugh's dissent, argued "regulate ... importation" historically includes duties and that delegating tariff power in foreign commerce is constitutionally permissible.

• Justice Kavanaugh's principal dissent maintained that text, history, and precedent (including Nixon's 1971 tariffs under TWEA and Algonquin's reading of "adjust the imports") show IEEPA authorizes tariffs, and that applying the major‑questions doctrine here is novel in foreign affairs.

• The dissent noted other statutes likely still permit most similar tariffs and raised potential consequences such as refunding billions collected under the IEEPA tariffs and uncertainty for trade deals.

Conclusion

While the Supreme Court's majority found no statutory or constitutional basis for presidentially imposed tariffs under IEEPA, the dissent warned of continued executive attempts to push the boundaries of foreign commerce authority. The litigation's outcome has immediate implications for billions of dollars in tariffs, market uncertainty, and ongoing legal challenges--yet, as the aftermath shows, the "fat lady" has not sung. President Trump's vow to explore alternative legal avenues promises further contention, leaving the nation and world markets watching to see whether Congress, the courts, or the executive branch will ultimately define America's future trade and constitutional order.