Why SCOTUS' rejection of Biden's student-loan forgiveness plays a big role in its Trump tariff decision
Business Insider
February 20, 2026
AI-Generated Deep Dive Summary
The Supreme Court’s decision to overturn most of President Donald Trump’s tariffs was influenced by its 2023 ruling that struck down former President Joe Biden’s broad student-loan forgiveness plan. In both cases, the justices found that these sweeping actions exceeded the scope of the law and required clear congressional authorization under the major questions doctrine. This legal principle mandates that federal agencies must have explicit legislative authority before enacting significant economic policies.
The court’s ruling on Trump’s tariffs hinged on its interpretation of the International Emergency Economic Powers Act (IEEPA), which allows presidents to regulate economic activity during emergencies. However, the justices determined that Trump’s expansive tariff policies went beyond the law’s intended limits. Similarly, in the student-loan case, Biden’s plan to cancel up to $430 billion in debt was deemed unconstitutional because it relied on ambiguous legal authority under the HEROES Act of 2003.
Chief Justice John Roberts emphasized that the same arguments advanced by Trump’s administration for broad tariff powers were previously rejected in the student-debt case. Both cases highlighted the court’s strict interpretation of congressional intent, signaling a broader shift in how the judiciary evaluates presidential overreach in economic matters. This approach aims to ensure that significant policy decisions are grounded in clear statutory authority rather than ambiguous legal interpretations.
For businesses and investors, this ruling underscores the importance of understanding the limits of executive power and the need for clarity in regulatory frameworks. The court’s decisions could impact future policy-making by limiting presidents’ ability to implement sweeping economic changes without explicit legislative backing. This precedent may also shape how businesses navigate trade policies and financial regulations, particularly during emergencies or economic crises.
In summary, the Supreme Court’s rulings on both Trump’s tariffs and Biden’s student-loan forgiveness demonstrate a judicial commitment to constraining executive authority in matters of significant economic impact. These decisions reinforce the need for clear congressional authorization for major policy initiatives, offering important implications for businesses and policymakers alike.
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Originally published on Business Insider on 2/20/2026