The Steady Drip: 5 Things to Know About How Supreme Court Ruling Could Shake Up Trump’s Tariffs (Connecting the Dots: The U.S. Supreme Court, The Phi Beta Kappa Society, The Belizean Grove, The Bohemian Club, The Carnegie Corporation of New York, The Atlantic Council of the United States, The U.S. Chamber of Commerce, The U.S. Commodity Futures Trading Commission, The U.S. International Trade Commission, Ted Lieu, Nancy Pelosi, The Smithsonian Institution & Soros Funding, All Networking)

5 Things to Know About How Supreme Court Ruling Could Shake Up Trump’s Tariffs (Connecting the Dots: The U.S. Supreme Court, The Phi Beta Kappa Society, The Belizean Grove, The Bohemian Club, The Carnegie Corporation of New York, The Atlantic Council of the United States, The U.S. Chamber of Commerce, The U.S. Commodity Futures Trading Commission, The U.S. International Trade Commission, Ted Lieu, Nancy Pelosi, The Smithsonian Institution & Soros Funding, All Networking)

More than $175 billion in U.S. tariff revenue could be returned to importers, according to a new study.

The Epoch Times

Emel Akan

Senior Reporter & Andrew Moran

2/20/2026|Updated: 2/20/2026

President Donald Trump holds a chart as he delivers remarks on reciprocal tariffs during his tariff announcement event in the Rose Garden at the White House on April 2, 2025. Brendan Smialowski/AFP via Getty Images

https://www.theepochtimes.com/us/supreme-court-decision-set-to-shake-up-trumps-tariffs-and-trade-strategy-5988126

Analysis

WASHINGTON—The Supreme Court released its long-anticipated decision on Feb. 20 over whether President Donald Trump’s tariffs exceeded the boundaries of congressional authority.

The Supreme Court’s ruling invalidates tariffs imposed using the 1977 International Emergency Economic Powers Act.

Specifically, this impacts the universal 10 percent tariff on nearly all U.S. trading partners and the higher country-by-country “reciprocal” import duties. The 25 percent fentanyl-related tariffs on Canada, Mexico, and China will also be affected.

The high court’s ruling does not overturn various sectoral tariffs, including those on aluminum, copper, and steel.

The pivotal decision is expected to shake up the U.S. foreign and economic policies.

Although Treasury Secretary Scott Bessent had said earlier that the administration could work around a negative ruling, he said the potential fix wouldn’t be as efficient.

In November, Trump warned that the United States “could be reduced to almost Third World status” if his tariffs were shot down.

“If a president is not allowed to use Tariffs, we will be at a major disadvantage against all other Countries throughout the World, especially the ‘Majors,’” Trump said in a Nov. 2 Truth Social post.

Although recent presidents have applied pressure through trade, Trump ushered in a paradigm shift in the country’s economic policy when he announced a sweeping set of tariffs beginning in April last year.

Before the announcement, predictive markets such as Kalshi and Polymarket had shown that the odds of the high court ruling in favor of the Trump administration were about 25 percent.

The financial markets also expected the Supreme Court to invalidate the IEEPA tariffs.

U.S. stocks initially popped following the high court’s ruling, with the blue-chip Dow Jones Industrial Average rising more than 200 points. But the leading benchmark averages later pared their gains.

Fiscal worries that federal revenues will fall short of earlier projections pushed government bond yields higher.

The benchmark 10-year Treasury yield topped 4.1 percent, while the 30-year jumped above 4.75 percent.

Here are the potential impacts of today’s decision.

1. Presidential Power

The decision would limit the president’s ability to impose or increase tariffs without congressional approval.

It may also affect his future decisions to use emergency powers for many economic measures.

This decision is expected to set precedents for executive emergency powers in other policy areas.

Trump has called the decision potentially “life or death” for the United States.

A Maersk cargo ship loaded with shipping containers navigates through New York Bay, on Jan. 23, 2026. Photo by Charly Triballeau/AFP via Getty Images

2. Government Revenue

The country has seen record tariff revenues and trade renegotiations that have affected billions of dollars in commerce.

Tariffs generated record revenue of more than $215 billion in fiscal year 2025.

As of Feb. 17, the federal government had collected more than $130 billion in tariff revenue so far this fiscal year, according to the Treasury Department.

Data from the Bureau of Economic Analysis has shown the monthly trade deficit narrowing since the president’s tariffs.

But the annual deficit totaled $901 billion—a tepid decline from the previous year—making it the third-largest on record.

The decision may force the federal government to refund importers, straining the federal budget and complicating deficit-reduction efforts.

A new Penn Wharton Budget Model estimated that more than $175  billion in U.S. tariff revenue could be returned to importers in the aftermath of the Supreme Court’s decision.

The White House and the U.S. Department of the Treasury in Washington on March 10, 2025. Madalina Vasiliu/The Epoch Times

3. Impact on Markets

Financial markets have been preparing for volatility.

The recent ruling against the tariffs has been good news for investors, offering some relief from higher company costs.

Still, the stock market rally may not last, as uncertainty could return.

Even if the case is lost, tariffs may remain in place for the long term.

The administration has already indicated that it could use alternatives, such as Section 232 national security tariffs or other legal options, to keep tariffs in place.

A trader works on the floor of the New York Stock Exchange at the opening bell in New York, on Feb. 20, 2026. Timothy A. Alary /AFP via Getty Images

4. Importers and Businesses

More than 1,000 companies, including Costco, have sued the government over tariffs.

U.S. importers have applied for electronic refunds, pending a Supreme Court decision on the legality of Trump’s IEEPA tariffs.

The deadline for importers to register for electronic refunds through the Automated Clearing House network with Customs was Feb. 6.

Costco wholesale store in Elkridge, Md., on Oct. 24, 2025. Madalina Kilroy/The Epoch Times

5. ‘America First’ Trade Policy

In his second term, Trump has been using tariffs as leverage to reduce tariffs and nontariff barriers on U.S. goods.

Shortly after his inauguration, the 47th president described “tariff” as the most beautiful word in the dictionary.

He drew inspiration from William McKinley, the 25th president, who championed steep tariffs to protect American industries in the late 19th century.

On April 2, Trump imposed levies of at least 10 percent on more than 80 countries.

This was a significant shift from the trade policy of his first term, when tariffs targeted a few specific countries, such as China.

Trump has frequently praised tariffs for attracting $18 trillion in new investment commitments this year.

He also floated the idea of sending American taxpayers $2,000 tariff rebate checks directly, using funds from the tariff revenue.

After April 2, 2025, which he dubbed “Liberation Day,” Trump launched trade talks with key trading partners to revise long-standing agreements.

President Donald Trump shakes hands with European Commission President Ursula von der Leyen after agreeing on a trade deal between the two economies following their meeting, in Turnberry, Scotland on July 27, 2025. Brendan Smialowski /AFP via Getty Images

He has announced new trade deals with dozens of trading partners, including Argentina, the European Union, Japan, South Korea, Switzerland, Thailand, the UK, and Vietnam.

Since taking office, Trump has also increased pressure on China by significantly raising tariff rates on Chinese goods.

Although some were reduced in a November truce, current tariffs remain high, at 47.5 percent.

This was expected to lead to long-term economic decoupling between the United States and China.

Trump’s trade agenda faced legal challenges from businesses and from states in 2025.

Although some economists warned that tariffs would increase inflation, the Bureau of Labor Statistics recently reported that inflation cooled to 2.4 percent in January, below expectations.

Connecting the Dots:

Andrew Carnegie was the founder of the Carnegie Endowment for International Peace (think tank) and the founder of the Carnegie Corporation of New York.

Ted Lieu was honored with the Carnegie Corporation of New York's Great Immigrants Award, has represented California's 36th congressional district in the United States House of Representatives since 2023 and is a member of the Congressional Progressive Caucus.

Carnegie Corporation of New York was a funder for the Carnegie Endowment for International Peace (think tank), the Atlantic Council of the United States (think tank) and a supporter for the American Society for Muslim Advancement.

Open Society Foundations was a funder for the Carnegie Endowment for International Peace (think tank) and the Atlantic Council of the United States (think tank).

George Soros is the founder & chairman for the Open Society Foundations.

Reuben Jeffery III is a director at the Atlantic Council of the United States (think tank) and was a chairman for the U.S. Commodity Futures Trading Commission.

Paula Stern was a director at the Atlantic Council of the United States (think tank) and was a chair for the U.S. International Trade Commission.

Myron A. Brilliant is a director at the Atlantic Council of the United States (think tank) and was an SVP for the U.S. Chamber of Commerce.

James A. Baker III is an honorary director at the Atlantic Council of the United States (think tank) and was an undersecretary for the U.S. Department of Commerce.

Brian D. Dailey is a lifetime director at the Atlantic Council of the United States (think tank) and was a director at the U.S. Chamber of Commerce.

Stuart E. Eizenstat is a director at the Atlantic Council of the United States (think tank) and was an undersecretary for the U.S. Chamber of Commerce.

Barbara H. Franklin is a lifetime director at the Atlantic Council of the United States (think tank) and was a secretary for the U.S. Department of Commerce.

Jon M. Huntsman Jr. is the chairman for the Atlantic Council of the United States (think tank) and was a deputy assistant secretary for Asia for the U.S. Department of Commerce.

Frederick Kempe is the president & CEO for the Atlantic Council of the United States (think tank) and a director at the U.S. Department of Commerce.

Daniel W. Christman was a director at the Atlantic Council of the United States (think tank) and an SVP for the U.S. Department of Commerce.

Carnegie Corporation of New York was a funder for the Atlantic Council of the United States (think tank) and a supporter for the American Society for Muslim Advancement.

Open Society Foundations was a funder for the Atlantic Council of the United States (think tank).

George Soros is the founder & chairman for the Open Society Foundations.

Henry A. Kissinger was a director at the Atlantic Council of the United States (think tank) and a member of the Bohemian Club.

Belizean_Grove is the equivalent to the male-only social group, the Bohemian Club.

Sonia Sotomayor was a member of the Belizean Grove, is an associate justice for the U.S. Supreme Court and a member of the Phi Beta Kappa Society.

George H.W. Bush was a member of the Bohemian Club and a member of the Phi Beta Kappa Society.

Samuel Anthony Alito Jr. is a member of the Phi Beta Kappa Society and an associate justice for the U.S. Supreme Court.

Stephen G. Breyer is a member of the Phi Beta Kappa Society and was an associate justice for the U.S. Supreme Court.

Ruth Bader Ginsburg was a member of the Phi Beta Kappa Society and an associate justice for the U.S. Supreme Court.

Elena Kagan is a member of the Phi Beta Kappa Society and an associate justice for the U.S. Supreme Court.

Anthony M. Kennedy is a member of the Phi Beta Kappa Society and an associate justice for the U.S. Supreme Court.

David Hackett Souter was a member of the Phi Beta Kappa Society and was an associate justice for the U.S. Supreme Court.

Harry A. Blackmun was a member of the Phi Beta Kappa Society and an associate justice for the U.S. Supreme Court.

Lewis F. Powell Jr. was a member of the Phi Beta Kappa Society and an associate justice for the U.S. Supreme Court.

John Paul Stevens was a member of the Phi Beta Kappa Society and an associate justice for the U.S. Supreme Court.

William Howard Taft was a member of the Phi Beta Kappa Society and the chief justice for the U.S. Supreme Court.

Byron R. White was a member of the Phi Beta Kappa Society and an associate justice for the U.S. Supreme Court.

Potter Stewart was a member of the Phi Beta Kappa Society and an associate justice for the U.S. Supreme Court.

Sonia Sotomayor is a member of the Phi Beta Kappa Society, an associate justice for the U.S. Supreme Court and a member of the Belizean Grove.

Belizean_Grove is the equivalent to the male-only social group, the Bohemian Club.

John G. Roberts Jr. is the chief justice for the U.S. Supreme Court, an honorary member of the Robert Trent Jones Golf Club (Gainesville, VA) the chancellor for the Smithsonian Institution and married to Jane Sullivan Roberts.

Vernon E. Jordan Jr. is the president emeritus for the Robert Trent Jones Golf Club (Gainesville, VA), an honorary trustee at the Brookings Institution (think tank) and was the president of the Economic Club of Washington.

Foundation to Promote Open Society was a funder for the Brookings Institution (think tank).

George Soros was the chairman for the Foundation to Promote Open Society.

Carnegie Corporation of New York was a funder for the Brookings Institution (think tank) and a supporter for the American Society for Muslim Advancement.

David M. Rubenstein is the co-chairman for the Brookings Institution (think tank), the president of the Economic Club of Washington, a regent at the Smithsonian Institution, Joe Biden spent Thanksgiving with him and a partner at Pillsbury Winthrop Shaw Pittman LLP.

Jane Sullivan Roberts was a partner at Pillsbury Winthrop Shaw Pittman LLP and is married to John G. Roberts Jr.

John G. Roberts Jr. is married to Jane Sullivan Roberts, the chief justice for the U.S. Supreme Court, an honorary member of the Robert Trent Jones Golf Club (Gainesville, VA) and the chancellor for the Smithsonian Institution.

Joseph R. Biden Jr. is a regent at the Smithsonian Institution, was the vice president for the Barack Obama Administration and the president for the Joe Biden Administration.

Mike Pence is a regent for the Smithsonian Institution and was the vice president for the Donald Trump administration.

Shirley Ann Jackson is a trustee at a regent at the Smithsonian Institution and the Brookings Institution (think tank).

David M. Rubenstein is a regent at the Smithsonian Institution and the co-chairman for the Brookings Institution (think tank).

Bill & Melinda Gates Foundation was a funder for the Smithsonian Institution and the Brookings Institution (think tank).

Ann M. Fudge is the U.S. program advisory panel chair for the Bill & Melinda Gates Foundation and a trustee at the Brookings Institution (think tank).

Foundation to Promote Open Society was a funder for the Brookings Institution (think tank).

George Soros was the chairman for the Foundation to Promote Open Society.

Carnegie Corporation of New York was a funder for the Brookings Institution (think tank) and a supporter for the American Society for Muslim Advancement.

Andrew Carnegie was the founder of the Carnegie Corporation of New York and the founder of the Carnegie Endowment for International Peace (think tank).

Carnegie Corporation of New York was a funder for the Carnegie Endowment for International Peace (think tank) the Atlantic Council of the United States (think tank) and a supporter for the American Society for Muslim Advancement.