Supreme Court Stops President's Tariffs; New 10% Global Tax Announced

The Supreme Court ruled against President Trump's tariffs, stopping the use of one law. Now, a new 10% global tax on imports has been announced.
By Newsroom | Law, Trade |

On Friday, the United States Supreme Court issued a 6-3 ruling that limits the President’s power to set taxes on imported goods. The court found that the administration misused a 1970s law, the International Emergency Economic Powers Act (IEEPA), to impose broad costs on foreign products. President Donald Trump had used this law to address issues like fentanyl trafficking and trade imbalances. While the ruling stops a significant portion of current trade fees, the President immediately responded by announcing a new 10% global tax on imports through a different legal path. This decision creates a sudden shift for businesses that have paid billions of dollars into the government treasury. It also starts a complex legal battle over who gets that money back and how the government will fund its current spending plans.

Read More: Los Angeles County Sues Roblox on February 19, 2026, Over Child Safety Failures

The Shift in Trade Authority

The current situation follows a period of intense trade activity where the White House used emergency powers to bypass traditional legislative routes.

After Tariff Decision, What Happens to Trump’s Deals With China, Canada and Europe? - 1

  • February 2026: The President used the IEEPA to declare a national emergency regarding fentanyl. This led to taxes on goods from China, Canada, and Mexico.

  • The Legal Challenge: A toy company named Learning Resources led the court case, arguing that the President overstepped his authority.

  • The Court Ruling: Six of the nine justices agreed that the emergency law does not allow the President to set broad trade taxes for these specific reasons.

  • The Response: The President stated the court only limited one specific law and that "the end result is going to get us more money."

The ruling specifically targets tariffs used for national emergencies, but leaves other trade laws, such as Section 301 and Section 232, untouched.

Data PointDetailSource
Total RevenueApproximately $175 billion has been collected under these specific tariffs.NY Post
Refund ScopeAbout half of the total recent tariff bill is affected by this ruling.NPR
Refund TimelineTreasury Secretary Scott Bessent suggests refunds could take up to one year.USA Today
New PolicyA 10% global tariff has been announced via executive order.AP News

"The process takes a little more time, but the end result is going to get us more money… the tariffs would not stop." — Donald Trump

The Path to Corporate Refunds

The ruling suggests that billions of dollars were collected in an unlawful manner. However, getting this money back is not a simple task for businesses.

After Tariff Decision, What Happens to Trump’s Deals With China, Canada and Europe? - 2

The Court of International Trade is the primary office responsible for managing these payments. Trade lawyers have pointed out that even if the government agrees to pay, insurance companies and bond holders may delay the process. These groups want to ensure they are not held responsible for any future debts before releasing funds.

  • Does the government have the ready cash to pay back $175 billion without cutting other programs?

  • Will smaller businesses have the legal resources to file for these refunds, or will the money stay with larger corporations?

Businesses may face a long waiting period as the Treasury Department and the court system create a formal process for returning the funds.

Read More: US Supreme Court Limits President's Power to Set Trade Taxes

After Tariff Decision, What Happens to Trump’s Deals With China, Canada and Europe? - 3

Conflict in Domestic Production

There is a clear divide in how American business owners view this decision. The President argued that high taxes on imports would spark a "renaissance" or a new birth of American manufacturing. However, data from the past several months does not yet show a large increase in domestic factory growth.

Some groups, like the Tennessee Soybean Association, have asked the President to stop using these trade tools because they fear other countries will tax American crops in return. On the other side, some businesses supported the tariffs as a way to protect their products from cheaper foreign competition.

After Tariff Decision, What Happens to Trump’s Deals With China, Canada and Europe? - 4

International Agreements and New Avenues

The ruling highlights that many goods from Canada and Mexico were already protected by the CUSMA free trade agreement. This means the immediate impact on North American trade might be smaller than the impact on trade with China or Europe.

Read More: Supreme Court Stops Trump Tariffs, Causing Fights in Republican Party on Friday

To bypass the court's decision, the White House is now looking at Section 301 of the U.S. Trade Act. This law allows for investigations into foreign trade practices. Unlike the emergency law, this process is slower and requires more specific evidence of unfair behavior by other countries.

  • Is the new 10% global tariff legally stronger than the one the court just rejected?

  • How will China and the European Union respond to the President’s promise to find "other avenues" for these taxes?

Expert Analysis

Experts from Morgan Stanley suggest that replacing the overturned taxes with new ones could take many months. This creates a gap in government revenue.

Rick Woldenberg, CEO of Learning Resources, called the ruling a "major victory" for the rule of law. He argued that the government should not use "excessive taxes" to harm businesses. Meanwhile, Treasury officials have stated that they will provide refunds without the need for long legal battles if the collection is proven illegal, though they warn that the loss of revenue means there is "less revenue available to spend."

Read More: Trump Announces 10% Global Tariff After Supreme Court Ruling in February 2026

Conclusion

The Supreme Court ruling has stopped the use of one specific legal tool the President used to tax foreign goods. This has created a $175 billion debt that the government may owe to private companies. While this is a setback for the administration's current trade strategy, the President has shown no intent to stop the trade war.

The next steps involve the Court of International Trade setting up a refund system and the White House starting new investigations under different trade laws. For now, the global trade environment remains unstable as businesses wait to see if the new 10% global tariff will also face legal challenges in the coming months.

Sources Used

Frequently Asked Questions

Q: Why did the Supreme Court stop the President's tariffs?
The Supreme Court said on Friday that the President used a law from the 1970s incorrectly to put taxes on imported goods. The court ruled 6-3 that this was not allowed.
Q: How much money is involved in the tariffs that were stopped?
About $175 billion was collected from these tariffs. The court's decision means some of this money might be given back to companies.
Q: What did the President do after the Supreme Court ruling?
President Trump immediately announced a new 10% tax on all goods coming into the country. He said he would use a different legal way to do this.
Q: Will businesses get their money back quickly?
It might take a long time for businesses to get refunds. The Treasury Secretary said it could take up to one year. The Court of International Trade will manage the process.
Q: What is the new 10% global tax?
The President announced a new 10% tax on goods from all countries. This is being done through a different law than the one the Supreme Court stopped.
Q: How does this affect trade with Canada and Mexico?
The ruling might have less impact on trade with Canada and Mexico because they have a free trade agreement. The biggest change will be for goods coming from countries like China.