Here are the key facts:
- On February 20, 2026, the Supreme Court ruled 6-3 that the broad tariffs enacted by the White House under the International Emergency Economic Powers Act (IEEPA) were illegal. This matters for investors because trade policy has been a major source of market volatility and has affected all parts of the economy.
- The ruling struck down tariffs on virtually every country tied to trade deficits, as well as those on Mexico, Canada, and China over fentanyl concerns, though smaller tariffs on steel, aluminum, and cars remain in place. This includes the “reciprocal tariffs” that were announced during last April’s “liberation day.”
- It’s unclear whether refunds will be provided and how they will be enacted. Thousands of businesses were part of the lawsuits that made their way to the Supreme Court, so this could impact many sectors. According to data from U.S. Customs and Border Protection, roughly $90 billion of the approximately $195 billion in tariffs collected under IEEPA may need to be refunded.
- The White House may attempt to re-enact tariffs under other legal frameworks, though those laws have procedural limits and may not allow tariffs as sweeping as the ones struck down. So, while this minimizes one tool the administration has been using for international negotiations, they may still be able to implement tariffs in other ways.
The included chart shows the level of import tariffs across different countries. These tariffs have led to short-term volatility, but the market has remained resilient over the past year.
While policy changes like this can create short-term uncertainty, it is worth remembering that corporate earnings, economic growth, and valuations tend to be the true drivers of long-term market performance.
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