In a 6-3 decision, the US Supreme Court has struck down President Donald Trump's sweeping global tariffs imposed under the International Emergency Economic Powers Act, citing lack of congressional authorization. The ruling triggered a relief rally in financial markets, including a brief spike in Bitcoin to $68,000, though gains faded amid ongoing uncertainties. President Trump responded by announcing a new 10% global tariff under Section 122.
The Supreme Court of the United States issued its ruling on February 20, 2026, declaring illegal the broad tariffs Trump enacted in 2025 on imports from China, Canada, Mexico, the European Union, Japan, and South Korea. Chief Justice John Roberts wrote the majority opinion, joined by Justices Amy Coney Barrett, Neil Gorsuch, Ketanji Brown Jackson, Elena Kagan, and Sonia Sotomayor. Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh dissented.
The Court applied the major questions doctrine, holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose such tariffs unilaterally, as trade regulation falls under Congress's constitutional powers. While sector-specific tariffs under laws like Section 232 remain in place, most duties under IEEPA are now invalidated.
The decision raises the possibility of refunds totaling between $130 billion and $175 billion in collected tariffs, with companies including Costco having filed lawsuits for repayment. Senate Democratic Leader Chuck Schumer commented, “A victory for the wallets of every American consumer. Trump’s illegal tariff tax just collapsed—He tried to govern by decree and stuck families with the bill. Enough chaos. End the trade war.”
Financial markets reacted positively at first. The S&P 500 and Nasdaq-100 rose to session highs, up 0.9% and 0.7% respectively. In crypto, Bitcoin climbed 2% to above $68,000 before retreating to around $67,000. The CoinDesk 20 Index gained 2.5%, led by 3%-4% advances in BNB, DOGE, ADA, and SOL. Crypto-linked stocks like Coinbase (COIN), Circle (CRCL), and MicroStrategy (MSTR) rose more than 2%, while some Bitcoin miners such as Riot Platforms (RIOT) fell 3%-6%.
Later that day, President Trump announced an additional 10% global tariff under Section 122, to last about five months and effective in three days. Paul Howard, director at trading firm Wincent, noted, “We have seen a small rally for risk assets post-tariffs news as it leads into a narrative that tariffs are damaging for the macro environment.” He added that volumes remain muted, expecting range-bound trading barring macro shocks. Earlier economic data indicated slower growth and higher inflation, contributing to cautious sentiment.
