President Trump’s Tariffs: Testing the Limits of Executive Power as Enshrined in the US Constitution
President Donald Trump’s tariffs, the cornerstone of his hitherto somewhat erratic foreign trade policy, faced their strongest test to date on 20 February 2026, when the US Supreme Court ruled in the cases of Learning Resources, Inc. v. Trump, and Trump v. V.O.S Selections, Inc. The plaintiffs comprised two small businesses and the respondents five small businesses and 12 States, respectively. Learning Resources is a family-owned Chicago-based business, owned by Rick Goldenberg, that designs and distributes educational products for children. V.O.S Selections is a New York-based family-run wine importer, owned by Victor Owen Schwartz. The Supreme Court ruled 6-3, in a landmark 170-page decision, that Trump did not have the inherent authority to unilaterally impose unbounded emergency global reciprocal tariffs under the International Economic Powers Act (IEEPA) 1977 without Congressional approval. Chief Justice John Roberts, Jr, wrote the majority opinion, which he shared with liberal Justices Ketanji Brown Jackson, Elena Kagan, and Sonia Sotomayor, and conservative Justices Neil Gorsuch and Amy Coney Barrett. Three Justices dissented: Samuel Alito, Jr, Brett Kavanaugh, and Clarence Thomas. In his dissenting opinion, Justice Kavanaugh opened up opportunities for Trump to reimpose his tariffs, stating that “the Court’s decision is not likely to greatly restrict Presidential Tariff authority going forward.” The Supreme Court reaffirmed Article 1, Section 8, of the US Constitution: “The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Exercises.” In the Court’s majority opinion, the President was not empowered to bypass Congress and impose peacetime tariffs.
Early into his second administration, President Trump imposed 25% tariffs on Canada and Mexico, and 10% tariffs on China to tackle the influx of fentanyl and other illegal drugs (Executive Order No. 14913). In short succession, Executive Order No. 14195 addressed the matter of “large and persistent” trade deficits. “Liberation Day” was then proclaimed on 2 April 2025, as part of Executive Order 14257. A universal 10% reciprocal tariff on all imported goods came into effect on 5 April, followed by further tariffs on selected countries from 9 April. Trump invoked the IEEPA to impose these wide-ranging tariffs on the grounds of national security, although there was no genuine “emergency.” The IEEPA has not been used to invoke global tariffs in the past. Over time, the IEEPA tariffs came to include reciprocal tariffs, fentanyl tariffs, Russian oil tariffs, Brazil tariffs, and trade deals negotiated pursuant to IEEPA. In addition, tariffs were imposed on steel, aluminium, lumber, and automobile parts products under Section 232 of the Trade Expansion Act 1962, also on the grounds of national security. Since their imposition, tariffs have increased, fallen, or been otherwise modified in line with Trump’s thinking at the time.
President Trump may have been most unhappy at the justices who ruled against him, but he remained undaunted and firm of resolve, claiming on the day the Supreme Court ruling was announced that the decision confirmed his ability to charge more tariffs nonetheless. Other options for tariffs remain in place under Sections 122, 301, and 338 of the same Act. Trump was quick to impose temporary 15% global tariffs on most imported goods under Section 122, for balance-of-payments imbalances, for 150 days in the same instance. Critical minerals, metals, and energy products will be exempted from tariffs. Section 122 has never been invoked by a President in the past. The new tariffs will come into effect from 12:01 EST on 24 February. Trump was reported to be investigating the use of Section 301 to “protect our country from unfair trading practices of other countries and companies.” The Trump administration appears to believe that tariffs under Sections 122, 232, and 301 will compensate for the loss of IEEPA tariffs.
Either way, the tariffs have not proved the resounding success that Trump had predicted from the outset. The tariffs only generated an estimated $133 billion in revenue by the end of 2025, just as the US trade deficit widened to $1.2 trillion, and onshore manufacturing jobs have yet to return in significant numbers. Furthermore, analysis of import price data by the Federal Reserve Bank of New York showed that between 86% and 94% of tariffs were paid for by US consumers and businesses. The use of tariffs to exert political leverage have had mixed results, as smaller nations have been successfully coerced on occasion while larger and more powerful nations have mostly retaliated in like. The negative impacts of tariffs seem to outweigh any potential benefits, as the resulting trade wars have alienated America’s previously reliable trading partners, many of whom are also its political allies, encouraging them to bypass the US and seek alternative sources of trade.
The Supreme Court’s ruling, in upholding the US Constitution, has created new uncertainties. The pressing matter of refunds for importers will be managed in due course by the US Court of International Trade. The saga of Trump’s economic policies continues to unravel. As stated before, only the foolhardy would feel able to confidently predict what lies ahead.
Ashis Banerjee