Supreme Court strikes down many Trump administration tariffs

Last edited 12:41 p.m., Feb. 20, 2026 [Editor's note: Comment from President Donald Trump has been added, and an incorrect photo has been removed.]

The U.S. Supreme Court struck down much of the Trump administration’s sweeping tariffs on imported foreign goods this morning, in a ruling that decides a consolidated 2025 lawsuit brought by several small businesses and 12 states.

In a 6-3 vote, the Supreme Court justices ruled that the International Emergency Economic Powers Act passed by the U.S. Congress in 1977 “does not authorize the president to impose tariffs,” according to the text of the court’s opinion and reporting by The Associated Press.

In a judicial opinion delivered by Chief Justice John Roberts covering a portion of the ruling, the nation’s top judges ruled that Article I of the U.S. Constitution specifies that “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises.”

Roberts’ opinion also references the Founding Fathers who wrote the U.S. Constitution, stating, “The framers recognized the unique importance of this taxing power … And they gave Congress ‘alone… access to the pockets of the people.’ … “The framers did not vest any part of the taxing power in the Executive Branch.”

Roberts, joined by Justices Neil Gorsuch and Amy Coney Barrett, also concluded that the Trump administration’s interpretation of IEEPA, the 1977 federal statute on emergency economic powers, “would represent a transformative expansion of the president’s authority over tariff policy. … in IEEPA’s half century of existence, no president has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope.”

David Richards, Springfield-based senior vice president and senior portfolio manager with Commerce Trust Co,, noted that stock markets reacted positively this morning in the immediate aftermath of the high court’s ruling, particularly markets most impacted by U.S. tariffs.

“A lot of those are retailers that we’ve all come to know that import a lot of their goods and services,” Richards said. “By and large, for southwest Missourians, this is going to be a good thing, provided that these tariffs that were ruled illegal do not come back in another form.”

Households may save $600-800 per year in the cost of goods, Richards said, but the Supreme Court’s ruling only covers roughly half of all tariffs that have been imposed by the U.S. government.

“This is good news for the American consumer, it’s good news for investors from the standpoint that many of those retailers curtail a large expense that they were forced to eat. That expense was about $30 billion a month that companies were paying in addition to bringing their goods in,” Richards said.

Those businesses should expect refunds from the government, Richards said, to the tune of $130 billion-$150 billion.

Meanwhile, Richards said yields were increasing in long-term bond markets this morning. Higher government bond yields tend to be an ominous economic signal, Richards acknowledged.

Richards told Springfield Business Journal the Supreme Court’s ruling does not decrease uncertainty or increase clarity for businesses and investors making financial decisions.

While some tariffs have been ruled unlawful by the Supreme Court today, Richards said other legal means remain available to the Trump administration to impose taxes on foreign goods; for example, Sections 122, 232 and 301 of the Trade Act of 1974.

“The administration has used tariffs as a negotiating tool,” Richards explained, referencing the U.S. government’s trade relations with countries around the world. “And so there’s probably more ambiguity now because while these [tariffs] are illegal, we don’t know if the administration will try and implement 122 tariffs, or if he’ll try and encapsulate more 232- or 301-type tariffs.”

Richards noted, “We know the ultimate intent is to garner revenue from these tariffs and equalize the trade balance. But we don’t know what other negotiating tools he may use now that this one is gone.”

Meanwhile, other parties have their own negotiating tools: The president “has used the threat of these tariffs in negotiations, bilateral negotiations with other countries,” Richards said. “And so to the extent that some of these trade agreements aren’t ratified yet, there’s significant potential that those individuals don’t push forward with that negotiated contract because IEEPA’s been found invalid.”

Impacts to smaller businesses in southwest Missouri may vary, Richards said: “It depends where you’re getting your supplies from, but to the extent that you were importing goods from one of these high-tariff nations, you should at least for the near future, see reduced cost of goods.”

Earlier this month, the Federal Reserve Bank of New York, a part of the U.S. central banking system, found that “nearly 90% of the tariffs’ economic burden fell on U.S. firms and customers.” The New York Fed noted that imports data through November 2025 showed that average tariffs on imports in the U.S. increased to 13% from 2.6% last year.

Tariffs reached a spike in April-May 2025, when the U.S. administration raised rates on Chinese goods by 125 percentage points, before that order was reversed by 115 percentage points in mid-May 2025, the New York Fed reported. By the end of 2025, the average tariff rate was 13%. 

In a live speech from the White House early this afternoon, President Donald Trump called the Supreme Court’s decision “deeply disappointing.”

“It’s my opinion that the court has been swayed by foreign interests and a political movement that is far smaller than people would ever think,” the president said.

He added, “The good news is that there are methods, practices, statutes and authorities, as recognized by the entire court in this terrible decision, and also as recognized by Congress, which they referred to that are even stronger than the IEEPA tariffs available to me as president of the United States.”

President Trump additionally said, “But other alternatives will now be used to replace the ones that the court incorrectly rejected.”

He added, “Although I firmly disagree with the court’s holding today, the decision might not substantially constrain a president’s ability to order tariffs going forward. That’s because numerous other federal statutes, which is so true, authorized the president to impose tariffs, and might justify most, if not all of the tariffs issued.”

The president cited the Trade Act of 1974, the Trade Expansion Act of 1962 and the Tariff Act of 1930, often called the Smoot-Hawley Tariff Act, as examples. Trump thanked Supreme Court Justices Brett Kavanaugh, Samuel Alito and Clarence Thomas for their dissenting votes

President Trump announced national security tariffs would remain in place in full effect, along with an additional 10% global tariff under Section 122 of the Trade Act of 1974 that would be “over and above our normal tariffs already being charged.”

U.S. Sen. Edward J. Markey, a Democrat representing Massachusetts, issued a news release shortly after the Supreme Court ruling was posted this morning. Markey stated U.S. small businesses paid more than $70 billion in tariffs from March-December 2025.

“This case was Small Businesses vs. Trump, and small businesses won,” Markey said in the release.

SBJ is seeking comment from the office of U.S. Rep. Eric Burlison, a Republican representing southwest Missouri in the U.S. House of Representatives. A representative answering the phone at Burlison’s Springfield office said any statements would likely be posted to social media.