Supreme Court limits Trump's tariff powers: Impacts on global trade

Editor's note: Xiong Yongli is director of the legal affairs department of Beijing Yinghe International Engineering. The article reflects the author's opinions and not necessarily the views of CGTN.

In February 2026, the US Supreme Court delivered a landmark ruling by a 6-3 vote, holding that the large-scale tariff measures implemented by the Trump administration under the International Emergency Economic Powers Act (IEEPA) lacked clear legal authorization and declaring such tariff policies null and void. This ruling has reshaped the power boundary between the US Congress and the executive branch in the field of trade tariffs, exerting a profound impact on the US domestic economy and the global trade pattern. A brief analysis combined with relevant cases is presented below.

I. The Trump administration's tariff policies lack legal basis

The core of the US Supreme Court's ruling this time is not to deny the President's power to impose tariffs, but to clarify "on the basis of which laws and within what boundaries the President can exercise tariff-related powers," which is essentially a reaffirmation of the "separation of powers" principle established by the US Constitution.

Article I, Section 8 of the US Constitution clearly stipulates: "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States."

The US Constitution explicitly vests the power of tariff collection in Congress. The Trump administration's imposition of additional tariffs on a global scale, relying on the IEEPA, constitutes an abuse of executive power. The Trump administration misinterpreted the "import regulation" provisions in the law as the basis for its actions, violating the principle of checks and balances. Prior to this, some US enterprises and states had initiated lawsuits, and lower courts had ruled the measures illegal; the Supreme Court's ruling further confirmed their legal invalidity.

II. The impact of subsequent US tariff policy adjustments on the global trade pattern

After the ruling, the Trump administration turned to imposing a 15% tariff on global goods in accordance with Section 122 of the Trade Act of 1974. This adjustment has directly impacted global trading partners and industrial chains, attracting widespread attention from various countries.

1. Impact on trading partners and industrial chains

Although the new tariffs have a 150-day duration, they cover a wide range and push up global trade costs. US importers and consumers are under pressure; enterprises such as Costco and Reebok have filed lawsuits demanding refunds for illegal tariffs. In addition, the surge in costs for exporting to the United States may prompt some enterprises to suspend capacity expansion, disrupting the stability of global industrial chains and leading to chaos in supply chain layout.

2. Response measures of various countries

The new 15% tariff policy will be implemented, and its subsequent impact remains to be seen. Trading partners such as the European Union and Canada have clearly stated that they will "monitor closely and do not rule out the possibility of countermeasures." Countries including China, Japan, the Republic of Korea, Thailand, the Philippines, Indonesia, Singapore, Brazil, and Mexico have also successively expressed their hopes that the United States will not undermine the global industrial chain and supply chain. At the same time, many countries are accelerating the adjustment of their supply chains, reducing their dependence on the United States, and resisting trade risks through multilateral cooperation.

III. The new path of hegemonism of the Trump administration after the weakening of tariff weapons

With tariff measures restricted, the Trump administration has turned to other methods to continue its hegemonic behavior. On the one hand, it may strengthen "secondary sanctions" and long-arm jurisdiction, exerting pressure in the financial field to make up for the insufficiency of tariffs; on the other hand, it may expand the scope of Section 232 investigations, include non-defense products in the category of "national security," and continue trade protectionism. In addition, it may invoke Section 301 of the Trade Act of 1974 to impose retaliatory tariffs or other trade restrictive measures on "unfair foreign trade practices."

However, the "alternative tools" available to the Trump administration all have obvious limitations: Section 122 is feasible in the short term but difficult to continue in the long term, and is prone to legal lawsuits; Section 232 has strong legal stability but a narrow scope of application, with prominent controversies and facing international countermeasures; Section 301 is highly targeted but has high implementation costs, making it impossible to achieve the goal of large-scale tariffs.

In terms of legal stability, all the "alternative tools" available to the Trump administration are facing challenges such as domestic court lawsuits and congressional constraints; in terms of policy sustainability, these provisions cannot replace the "convenience" and "coverage" of the IEEPA. Moreover, the implementation process will exacerbate contradictions in US domestic industries, trigger international trade frictions, and lead to a significant increase in the uncertainty of US tariff policies. However, the Supreme Court's ruling only "blocked the path for the President to impose extensive tariffs on the grounds of a state of emergency, but did not deprive the President of all tariff powers." In the future, US tariff policies will enter a stage of "changing tools, advancing slowly, and frequent frictions," with serious insufficient policy continuity.

In summary, the Supreme Court's ruling has curbed the President's abuse of tariff power, but the policy adjustments of the Trump administration remain uncertain. The shift in its hegemonic methods will inevitably exacerbate global trade frictions and also force various countries to strengthen cooperation. The global trade pattern has entered a new round of adjustment as a result.