Trump tariffs struck down: What's his plan now?

DW News · Feb 20, 2026 · Collected from RSS

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In a political setback for President Donald Trump, the US Supreme Court has struck down most of his tariffs put in place over the last 13 months, ruling that they are unconstitutional. Specifically, the court decided in a 6-3 vote that the president exceeded his authority by using the International Emergency Economic Powers Act (IEEPA) of 1977 to implement many of his tariffs on US trading partners. What is the Trump administration likely to do next? In anticipation of the ruling, the US administration had made it clear it had been doing its homework for months and that it was prepared to quickly implement new tariffs under other laws that allow the president to impose them. In response to the court ruling on Friday, Trump said he would impose a 10% global tariff for 150 days to replace some of his sweeping duties that were struck down. The new tariffs would be implemented under Section 122 of the Trade Act of 1974, which allows the president to ​impose ‌duties of up to 15% for up to 150 days on countries related to "large and serious" ‌balance of payments issues. Unlike some of the other options at the president's disposal, this statute does not require investigations ‌or ​impose other procedural limits. However, if they were to continue after 150 days, tariffs under Section 122 would need approval from the Congress. "We have alternatives, great alternatives," Trump told reporters at a press conference. "Could be more money. We'll take ⁠in ​more money, and we'll be a lot ​stronger for it," Trump said, referring to options available to the administration. The Supreme Court's decision was not really about tariffs directly, but about presidential power and its constitutional limitsImage: Kent Nishimura/REUTERS What are the government's other options? Legal experts agree that there are a number of additional statutes the president could use to impose tariffs on certain products or trading partners without congressional backing. But they would require either investigations or hard rationale, and are slower to implement. Section 301 of the Trade Act of 1974 lets the president implement tariffs on countries that are violating international trade agreements that harm US businesses. There is no limit on the tariff amount or duration, but they must be justified and supported by lengthy investigations lasting months. Trump said his ​administration was ‌also initiating several unfair trade practices investigations under Section 301 "to protect our country from unfair trading practices of other countries ​and companies." Section 232 of the Trade Expansion Act of 1962 lets the president implement tariffs on national security grounds. These target specific sectors like steel, aluminum or lumber and need the support of an investigation by the US Department of Commerce. The president has successfully used these before. On Friday, the US Secretary of the Treasury Scott Bessent said the "treasury's estimates show that the use of Section 122 authority, ‌combined with potentially enhanced Section 232 and Section 301 tariffs will result in virtually unchanged tariff revenue in 2026."What about the tariffs already collected? Besides creating more uncertainty and new tariff workarounds, the Supreme Court ruling could also mean big refunds for the affected US importers. When the court heard oral arguments at the start of November 2025, they were particularly interested to know if tariffs are really just hidden taxes for US consumers. For 2025, US Customs and Border Protection, which is part of the Department of Homeland Security, collected $287 billion (€243 billion) in customs duties, taxes and fees. This is an increase of 192% compared to the previous year, according to calculations by the Federal Reserve Bank of Richmond. This money includes customs duties, taxes and fees for tariffs already in place when Trump took power, in addition to the major "reciprocal" tariffs added since he took office.Trump's first-year US economic record shows mixed signalsTo view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Importers who paid these tariffs will be wondering how to get at least some of that money refunded. For those businesses, it will be a welcome reprieve. But with more tariffs likely on the way, it will not add much to their bottom line or planning security. For individuals, reimbursement will be more complicated since refunds would go to the importers — usually businesses — that paid the duties in the first place, not to consumers. For the government, it would be a double blow: Having to process all the returns will be a challenge, and the treasury will lose out on billions in revenue. Trump said Friday it may take years to resolve the legal issue of whether the billions taken in from his tariffs must be refunded. He said the issue was "not discussed" in the US Supreme Court's ruling. "We'll end up being in court for the next five years," he said. Why did this reach the Supreme Court? Since the Trump administration started implementing its tariffs, hundreds of lawsuits have been filed trying to stop them. The case heard by the Supreme Court was brought by a group of businesses. Over the past 13 months, Trump has imposed tariffs by decree on many countries only to pause them or negotiate lower rates. Among other things, he has pointed to trade imbalances and drug smuggling as reasons to justify his actions. US-based businesses have complained about the extra costs of tariffs. Other critics have pointed out that many of the them have little to do with trade deficits and more to do with making countries bend to the United States' will. Edited by: Ashutosh Pandey