Supreme Court Strips Trump's Tariff Powers, Testing His Deal-Maker Claims
The US Supreme Court has delivered a landmark ruling that severely curtails President Donald Trump's ability to impose unlimited tariffs on imports, compelling him to abandon his preferred tactics of bullying and capricious threats in favour of conventional diplomatic negotiations. The decision, announced on Friday 20 February 2026, strikes down nearly all tariffs levied by Trump since his return to the White House in January of the previous year, fundamentally reshaping his approach to global trade.
End of Unilateral Tariff Authority
The court's ruling gutted Trump's use of the 1977 International Emergency Economic Powers Act (IEEPA) to claim sweeping taxation powers, a legal manoeuvre never before employed for such purposes. This invalidates the so-called "Liberation Day" tariffs, which Trump had touted as a major achievement under his "reciprocal tariff" policy. Notably, taxes on imports from remote locations like the uninhabited Heard and McDonald islands near Antarctica, showcased at a chaotic Rose Garden event last April, are now nullified.
Additionally, the decision removes tariffs imposed on China, Mexico, and Canada—three of America's largest trading partners—based on dubious justifications related to fentanyl smuggling. With these powers eviscerated, Trump must now engage in genuine negotiations, treating trading partners as equals rather than subordinates. This shift puts his long-standing boasts of being the "world's greatest dealmaker" to the ultimate test, requiring him to demonstrate real diplomatic skill instead of relying on impulsive threats.
Illustrative Case: Switzerland and Global Implications
The ruling has immediate practical consequences, such as invalidating a 15 percent tax on Swiss imports, imposed after Rolex executives and other watchmakers presented Trump with a solid gold bar and a desk clock to persuade him to reduce a previously announced 39 percent levy. This episode exemplifies how Trump used his now-defunct authority to bully world leaders, extracting concessions and gifts as part of his quixotic mission to reverse globalization and supply chain integration.
Trump's tariff powers had become a versatile tool, applied indiscriminately to a wide range of global issues. For instance, he threatened tariffs during conflicts between India and Pakistan, claiming credit when tensions de-escalated. He also used them to pressure countries with single-payer health systems into paying higher prices for pharmaceuticals, despite lacking legal basis. Even territorial disputes, such as with Denmark over a centuries-old colony, prompted tariff threats, as did retaliation against China for cutting purchases of American crops.
Economic Realities and Remaining Powers
Despite Trump's reliance on tariffs, multiple analyses, including a recent study by the New York Federal Reserve, have shown that these taxes—paid by American importers—actually hindered efforts to address persistent cost-of-living issues. Trump has responded to the ruling by claiming it leaves him with even stronger powers to impose higher tariffs, citing authorities that allow up to 15 percent taxes on all imports for 150 days or more with congressional approval. Other provisions permit reimposing levies after investigations and legal processes, but these are time-consuming and subject to court challenges.
Ultimately, the Supreme Court's decision has more or less eliminated Trump's ability to threaten a country's exports on a whim. From this point forward, his negotiating tactics must evolve beyond fits of pique, forcing him to prove whether his deal-making prowess extends beyond mere bluster to substantive diplomacy.
