Written by: Jensen Stanzi
Over the past year, the Trump administration has expanded its global trade platform. Trump implemented aggressive trade policies that imposed a minimum 10% levy on all imports with additional tariffs of up to 41% on nations that did not successfully negotiate trade with the U.S (Brusuelas 2026). To bypass traditional congressional approval, the administration relied on the International Emergency Economic Powers Act (IEEPA). The IEEPA is a federal law that authorizes the President to regulate international commerce in a state of emergency when there is a foreign threat to the U.S. (Casey et al., 2025). Historically, presidents have utilized this law in instances of wartime to freeze assets or to target sanctions against foreign adversaries rather than for broad economic protection.
Ultimately, this step away from historical precedent led to a crucial Supreme Court of the United States (SCOTUS) hearing. On February 20, 2026, in Learning Resources Inc. v. Trump and V.O.S. Selections v. United States, SCOTUS ruled on a 6-3 decision that President Trump lacks the authority to impose tariffs under IEEPA (Brusuelas 2026). Not only did this decision rule over 160 million dollars worth of tariffs illegal, but also mandates a fundamental shift in the future of how the U.S. approaches trade.
“So far, it appears that U.S. trading partners are taking a ‘wait and see’ attitude to whether or when they might renegotiate some of the terms of their agreements, given the more limited tariff threats that Trump can credibly make right now”(Hillman 2026). A major question is whether refunds for now illegal taxes will be distributed, and if so, when and to whom? The Supreme Court did not originally confirm any refunds; that was left to the lower courts (The Conference Board 2026). According to The Conference Board, a non-profit, member-driven business research organization that provides economic data, trend analysis, and insights to help leaders make informed decisions, The United States Court of International Trade ruled that all importers who paid tariffs under the IEEPA are entitled to refunds, not only the companies that originally filed lawsuits. The Court of International Trade is an Article III federal court with exclusive jurisdiction over civil actions arising from import transactions and federal laws governing international trade (United States Court of International Trade). Although the timing and process are still uncertain, about 90% of the tariff costs were passed on to customers (Brusuelas 2026). While the court’s decision has opened the door for a huge amount of corporate refunds, a true success of the ruling would be in American consumers who largely bore the burden of the taxes.
The future of U.S. tariff policy is still up in the air. Even though SCOTUS ruled that the president lacks the authority to impose tariffs under IEEPA, numerous existing loopholes have allowed the administration to still impose similar taxes. According to CBC, “Trump and his team have made clear they’re seeking to replace the hundreds of billions of dollars in lost revenues after the Supreme Court’s February ruling — which deemed that the president’s attempt to use an emergency powers law to enact tariffs was not valid — by using different laws to establish new levies” (CBC 2026). Specifically, the administration is pivoting towards Sections 232 and 301 of the Trade Act of 1974. Section 232 allows for tariffs in the context of broad national security concerns while Section 301 requires formal investigations of trade practices (Rodriguez 2026).
The U.S. trades with over 200 countries and territories worldwide. Therefore, this ruling has substantial economic implications across many trading partners. To begin, the ruling underscores China and the United States’ ongoing complex trade relations and how crucial an agreement is in the long run. Shockingly, according to Reuters, the new US tariff regime is projecting benefits in China, including an estimated 4.5-5% growth in the economy and a reduction in the weighted U.S. tariff rate for China to from 32.4% to 22.3% because of Trump’s introduction of a short international 10% tax levy, according to data from Capital Expectations. However, it is known that this reduction can very well be short-lived and result in front-loading with Chinese factories to export as much as possible while tensions are lower (Zhang and Kirton 2026).
The European Union, another of the United States’ largest trading partners, is also skeptical of the ruling’s implications and of what is to come regarding possible new tariffs. “Bernd Lange, chair of the European Parliament’s trade committee, said Thursday that Washington’s launch of new Section 301 investigations into unfair trade practices had been expected, but ‘anything that departs in substance from the Turnberry Deal will not be acceptable’”(CBC 2026). Furthermore, the European Parliament has not yet decided when it will vote on the trade agreement reached between the United States and the European Union last summer in Turnberry, Scotland. Additionally, Taiwan’s cabinet noted that its recent reciprocal trade agreement with the United States resolved several issues that could have fallen under a Section 301 investigation. Indonesia similarly emphasized that its agreement with the United States continues to guide its bilateral trade relationship (CBC 2026).
Looking forward, the ruling may not signal the end of aggressive trade measures and tariffs, but rather a transition in how they are administered. The administration’s pivot toward Section 232 and 301 investigations suggests that the fight for revenue and control will simply move into other legal areas. While countries like China may see temporary economic success, the persistent threat of front-loading exports and the skepticism of partners like the EU highlight a global economy still on edge. Ultimately, the stability of the U.S. trade regime now rests on whether the administration can balance its economic goals with the new boundaries of its power and its ability to come to trade agreements with various nations.
References
Committee for Economic Development. (2026, March 05). Tariffs: Refund ruling and next steps (CED policy backgrounder). The Conference Board. https://www.conference-board.org/research/ced-policy-backgrounders/tariffs-refund-ruling-and-next-steps
Jennifer A. Hillman. (2026, February 23). The Supreme Court clipped Trump’s tariff powers—and opened new trade battlefronts. Council on Foreign Relations. https://www.cfr.org/articles/the-supreme-court-clipped-trumps-tariff-powers-and-opened-new-trade-battle-fronts
CBC (2026, March 11). Trump’s tariff proposal could give the president more power than any since the 1930s. https://www.cbc.ca/news/world/trump-tariffs-replace-us-supreme-court-9.7125102
Joseph Brusuelas. (2026, February 20). Economic implications of the Supreme Court’s tariff ruling. RSM US LLP. https://realeconomy.rsmus.com/economic-implications-of-the-supreme-courts-tariff-ruling/
Ellen Zhang and David Kirton. (2026, March 11). U.S. tariff reprieve sparks scramble and skepticism in China’s export hubs. Reuters. https://www.reuters.com/business/retail-consumer/us-tariff-reprieve-sparks-scramble-scepticism-chinas-export-hubs-2026-03-11
United States Court of International Trade. (n.d.). About the court. https://www.cit.uscourts.gov/about-court
Alejandro Rodriguez. (2026, March 25). U.S. tariffs: What comes next? Plante Moran https://www.plantemoran.com/explore-our-thinking/insight/2026/03/us-tariffs-what-comes-next