The Supreme Court has ruled that most of Donald Trump’s tariffs are illegal

American Supreme The court on Friday struck down most of President Donald Trump’s tariffs, potentially resulting in more than $175 billion in tariff recoveries for U.S. companies. In a 6-3 decision, the justices ruled that the International Emergency Economic Powers Act (IEEPA) — the law the Trump administration has used to justify many of its sweeping global tariffs — does not give the president the power to impose taxes, and tariffs are a form of tax on imports.

Since the beginning of his second term, Trump has issued a variety of tariffs targeting nearly every country in the world. Most of these tariffs, including the messy so-called “reciprocal tariffs” last April that sought to tax even islands with only penguins, were authorized under IEEPA in accordance with executive orders issued by the administration.

From the beginning, legal scholars have questioned whether the IEEPA was intended to cover definitions at all. In his opinion on eliminating the tariffs, Chief Justice John Roberts wrote: “It is also interesting that in the half-century of IEEPA’s existence, no president has resorted to the law to impose any tariffs, let alone tariffs of this size and scope.” Instead, he wrote, “the president must establish a clear congressional mandate to exercise.”

Friday’s decision represents a major and rare pushback from the Supreme Court against the Trump administration’s capricious policies. Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh dissented.

During a White House breakfast with governors on Friday morning, Trump reportedly called the ruling a “disgrace” and said he had a backup plan, according to CNN’s Kaitlan Collins.

The Supreme Court ruling does not cover all the definitions announced in the past two years. For example, the steel, aluminum and copper sectors are not affected, as they were imposed under different presidential powers.

“Small businesses are rightly concerned that the administration will respond to this legal defeat by simply reimposing the same tariff policy through other means,” Dan Anthony, executive director of the We Pay Tariffs Small Business Coalition, said in a statement. “Reimposing tariffs under different legal approaches would have the same devastating effect.”

It will not be easy for the administration to replace those definitions immediately, since other related policies often come with their own procedures and lengthy trade investigations before definitions can be required.

The ruling also launches the process of recovering a massive amount of tariffs collected last year. Economists estimate that more than $175 billion has been raised since February 2025 under IEEPA’s tariff policies. In January, anticipating the Supreme Court’s decision, Trump posted on Truth Social that the refund “would be a complete mess, and almost impossible for our country to pay.”

Several major companies, including Costco, Prada, BYD, and Goodyear, have filed lawsuits against the federal government seeking a refund of the tariffs. Cantor Fitzgerald, a financial services firm run by the sons of US Commerce Secretary Howard Lutnick, has also created ways for its clients to bet on the tariffs being eliminated, WIRED first reported in July 2025.

In an emailed statement to WIRED, a spokesperson for Cantor Fitzgerald wrote: “As previously stated, Cantor can confirm that it is not in the business of identifying any risks, taking views, or facilitating deals in litigation involving the legality of U.S. tariffs.”

Updated 2/21/26 at 3:00 PM ET: This story has been updated to include a statement from Cantor Fitzgerald.