When the levy brakes: Trump’s tariffs struck down
The Economist
February 23, 2026
AI-Generated Deep Dive Summary
The Supreme Court has struck down one of Donald Trump’s signature policies, ruling that his use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs was unconstitutional. The court determined that the authority to set tariffs lies with Congress, not the president, in peacetime. This decision invalidates Trump’s broad interpretation of IEEPA, which he had used to justify imposing tariffs on various countries during his presidency. While Trump has vowed to continue using alternative legal avenues to enforce tariffs, such as Section 122 of the Trade Act of 1974, this move introduces significant uncertainty for international trade and U.S. businesses.
The ruling highlights a fundamental tension in U.S. governance: the balance between executive and legislative powers over foreign policy and economic matters. Trump’s reliance on IEEPA was particularly controversial, as critics argued that it allowed him to bypass Congress and unilaterally impose tariffs on other countries. The court’s decision undermines this approach, emphasizing that such decisions should be made by elected lawmakers rather than the executive branch.
The immediate impact of the ruling is significant for international trade relations. While Trump has already announced new temporary tariffs under Section 122, which allows for up to 150-day tariff imposition based on claims of a balance-of-payments deficit, this authority is untested and likely to face legal challenges. Additionally, unwinding existing tariffs and reimbursing affected businesses will be a complex and costly process, further complicating the trade landscape.
For businesses, the ruling creates both opportunities and risks. The invalidation of Trump’s tariff policies could reduce trade barriers for some companies, particularly those impacted by prior tariffs
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Originally published on The Economist on 2/23/2026