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The US Supreme Court Rules and Future Prospects of Trump's Tariff Gambit

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  • Yan Liang

Abstract

On February 20, 2026, the Supreme Court of the United States ruled, by a majority of six to three, that the International Emergency Economic Powers Act (IEEPA) does not provide a legal basis for the Trump administration to impose sweeping tariffs. The decision sent shockwaves through financial markets and foreign capitals alike. IEEPA tariffs--encompassing both the reciprocal tariffs and the fentanyl-related tariffs--accounted for roughly 70 percent of the United States' total tariff architecture. The ruling thus struck at the very heart of the most powerful economic and foreign policy instrument that President Trump has wielded since taking office.

Suggested Citation

  • Yan Liang, 2026. "The US Supreme Court Rules and Future Prospects of Trump's Tariff Gambit," Economics Policy Note Archive 26-1, Levy Economics Institute.
    • Handle: RePEc:lev:levypn:26-1
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