Tariffs Struck Down by Supreme Court

On February 20, 2026, the U.S. Supreme Court struck down President Trump’s tariffs in a 6-3 ruling, declaring them an unconstitutional use of executive power.

The Court found that only Congress has the authority to impose taxes and tariffs.

"The ruling impacts most of the tariffs Trump has enacted since last year, but not fees on steel and aluminum imports that he enacted in his first term and former President Joe Biden continued," said Robert Schoenberger of IndustryWeek, sister publication to MH&L. He also noted that "the ruling forbids the 10% baseline tariffs on all countries that Trump enacted citing the International Emergency Economic Powers Act (IEEPA). The president enacted larger tariffs on key countries and has been using the threat of reciprocal tariffs to get trading partners to the negotiating table."

The National Retail Federation issued the following statement from Executive Vice President of Government Relations David French in response to the Supreme Court’s ruling regarding the Trump administration’s use of the International Emergency Economic Powers Act to impose tariffs.

“The Supreme Court’s announcement today regarding tariffs provides much-needed certainty for U.S. businesses and manufacturers, enabling global supply chains to operate without ambiguity. Clear and consistent trade policy is essential for economic growth, creating jobs and opportunities for American families. We urge the lower court to ensure a seamless process to refund the tariffs to U.S. importers. The refunds will serve as an economic boost and allow companies to reinvest in their operations, their employees and their customers.”

The National Association of Wholesale Distributors made the following comment:

"NAW urges the Administration to move quickly to return tariff revenues to the American businesses that paid them. Putting those dollars back into the hands of job creators will immediately strengthen cash flow, unlock capital investment, and provide a meaningful boost to the broader economy. Wholesaler-distributors operate on thin margins while keeping America’s supply chains moving. Returning tariff funds will allow distributors to reinvest in inventory, infrastructure, technology, and workforce growth. A prompt, orderly refund process will deliver real economic impact."

Jay Timmons, CEO of NAM and Rockwell Automation CEO and NAM Board Chair Blake Moret issued the following joint statement:

“Today’s decision underscores the importance of clarity and durability in U.S. trade policy. 

 Manufacturers rely on stability to plan investments, grow operations and create jobs. Ongoing legal and policy uncertainty makes it more difficult to make the long-term decisions that drive American competitiveness. 

 Now is the time for policymakers to work together to provide a clear and consistent framework for trade, one that strengthens domestic manufacturing, secures supply chains for critical inputs, empowers the administration to negotiate strong trade deals and ensures manufacturers can access the materials and components they need to grow, compete and create jobs in America and the export markets they need to sell U.S.-made goods around the world. If tariffs are utilized as a tool, they should be targeted to countries engaged in specific unfair trade practices, particularly by nonmarket economies. 

 We share the president’s goal of ushering in the greatest manufacturing era in American history, and clear, durable trade policies will help manufacturers deliver on that promise. Strengthening supply chain resilience will ensure manufacturers can expand production, compete globally and power economic growth here at home. 

 The NAM will continue working with leaders in Congress and the administration to advance durable solutions that support manufacturers, strengthen America’s industrial base and benefit the millions of Americans who depend on a strong manufacturing economy.” 

Eric R. Byer, CEO of the Alliance for Chemical Distribution (ACD) made the following comment. 

“ACD supports the Court’s ruling today. ACD members, many of whom are small businesses, have navigated cost burdens and uncertainties that have adversely impacted the ability to import and deliver the chemical products essential to American’s health and safety. ACD is reviewing the Court’s ruling and it is our hope this finally brings clarity in order for our members  to continue to contribute to domestic economic growth and safely distribute the essential chemical products used in nearly every industry.”

Nishith Rastogi, founder & CEO of Locus, a logistics technology company, offered the following comment.

“The Court’s decision to eliminate the tariffs takes a layer of cost and uncertainty out of the system. That’s helpful. It gives companies clearer ground to plan on after a stretch where duties were shaping sourcing and pricing decisions.

That said, supply chains don’t automatically revert to some earlier baseline. Over the last year, companies changed suppliers, shifted volume across regions, and repositioned inventory to manage the tariff structure as it existed. When the rules change again, those decisions don’t just unwind neatly.

Trade flows will adjust. Some lanes may see volume come back faster than expected, while others could lag. Capacity won’t rebalance perfectly on day one. There’s usually a period where parts of the network feel tight and others feel underutilized.

The companies that manage this best won’t treat it as a reset. They’ll treat it as another adjustment cycle. Clearer policy helps, but what matters is how quickly operations can respond when the environment shifts again.”

Alex Saric, procurement and supply chain expert at Ivalua, offered a comment

“The damage is already done. Companies have restructured sourcing networks, absorbed margin pressure and invested heavily in diversification. A Supreme Court reversal does not undo past disruptions or eliminate the risk of new tariffs under a different authority. Businesses that retreat back to single-region sourcing to chase short-term cost relief risk repeating the same vulnerability. Trade volatility isn’t an occasional shock anymore; it’s a permanent operating reality. CPOs should treat this moment not as relief, but as validation of the need for dynamic supply chain planning.”

Scott Lehman, vice president of Product Management, Operational Risk & Supply Chain at Sphera, an operational risk software company offered this comment:

“Today's ruling may feel like a resolution, but supply chain leaders should not interpret it as stability returning to the system. The effective tariff rate drops, but it does not return to anything close to the pre-2025 baseline.

Refunds will not be immediate or automatic, and will require clean, multi-tier documentation that most companies do not have readily available. If claims accumulate at scale, the process could stretch for years. Organizations with structured supplier data across multiple tiers will be significantly better positioned than those relying on ad hoc records.

For companies with significant China sourcing or steel and aluminum exposure, the cost environment today is essentially the same as it was yesterday. The relief, to the extent it comes, is concentrated in companies with heavy exposure to the broader reciprocal tariff structure on other trading partners. Supply chain teams should map their specific exposure carefully before drawing conclusions about what this ruling means for their cost base."

Sobel Network Shipping Company offered the following comments:

President Trump, who recently claimed that "without tariffs, this country would be in such trouble," now faces a significant hurdle. While he could attempt to reimpose these duties using other statutes (like Section 232), those pathways require lengthy investigations and specific "national security" justifications that may not apply to a general baseline tariff.

For the markets, this ruling provides a reprieve for importers and supply chain managers who have been navigating a volatile trade environment since January. However, it also introduces a period of uncertainty as the Treasury Department determines the mechanism for potential rebates.

The CAMEO Network, a small business organization, praised the Supreme Court’s ruling:

“Tariffs are holding back U.S. manufacturing, driving up costs for businesses and consumers, and slowing our economy,” said Carolina Martinez, CEO of CAMEO. “Our hope is that this ruling provides relief for business owners who have been navigating supply chain shocks and uncertainty over the past year.”