The U.S. Supreme Court Strikes Down Trump’s Tariff Package: What Changes

On February 20, 2026, the U.S. Supreme Court ruled 6–3 that President Donald Trump lacked legal authority to impose broad tariffs on dozens of countries, including Brazil, under the International Emergency Economic Powers Act (IEEPA). The decision was one of the most anticipated rulings of the year and opened a billion-dollar dispute over what to do with tariffs already collected.

What the Supreme Court decided, and why

The case, Learning Resources v. Trump, reached the Court after importing companies and 12 U.S. states challenged the use of the IEEPA, a 1977 statute, as the basis for large-scale general import tariffs. Chief Justice John Roberts wrote the majority opinion and was direct: Article I of the U.S. Constitution gives Congress, not the president, the power to create taxes and tariffs. For the Court, delegating that power to the executive would require a clear and specific grant from the legislature, which the IEEPA simply does not contain.

The decision struck down both the so-called reciprocal tariffs and the trafficking tariffs based on the IEEPA, applied globally since April 2025. Left outside the ruling, because they rest on other statutes, were Section 232 tariffs (national security, as with steel and aluminum) and Section 301 tariffs (unfair trade practices).

What followed: a new 10% tariff and a US$ 133 billion dispute

The White House quickly responded that U.S. trade policy would not be affected, because other legal authorities remain available. On the same day as the decision, Trump issued a proclamation based on Section 122 of the Trade Act of 1974, creating a temporary 10% surcharge on products from all countries, valid for 150 days from February 24. Unlike the IEEPA, Section 122 has explicit congressional backing for balance-of-payments emergencies, but it is limited in time and in the rate.

The decision also opened a billion-dollar dispute: by market estimates, about US$ 133 billion in tariffs already collected under the IEEPA fell into a gray zone, with importing companies seeking refunds and the U.S. government resisting repayment while it weighs next steps. For Brazil, the practical effect was limited in the short run: the 10% tariff originally applied in April 2025 had already been removed before the decision, and the 40% surcharge on products outside the exception list continued to be discussed on other legal grounds — which, months later, would result in the combined 37.5% tariff now in force.