Supreme Court Limits Trump’s Tariff Power—and Foreign Policy Options

President Donald Trump’s approach to foreign policy has long relied on assertive tactics and the threat of economic pressure. On Friday, February 21, 2026, the Supreme Court significantly curtailed one of his most frequently used tools: tariffs.

From disputes with Cuba to challenging China and even pursuing a seemingly improbable acquisition of Greenland, tariffs have become a default instrument in the second Trump administration’s foreign policy toolkit. He has regularly employed them to pressure allies, isolate adversaries, and demand policy concessions on issues often only tangentially related to trade.

The Supreme Court’s 6-3 decision striking down many of Trump’s tariffs “effectively neutralizes tariffs as a geoeconomic weapon,” according to Edward Fishman, director of the Center for Geoeconomic Studies at the Council on Foreign Relations.

The ways in which Trump has utilized tariffs are notably unconventional. While past presidents have typically used them to address trade imbalances or protect specific domestic industries, Trump views their utility much more broadly.

Early in his second term, Trump imposed tariffs on Canada, China, and Mexico, citing their alleged failures to curb the flow of fentanyl into the United States. He has also levied tariffs against countries for not adhering to the administration’s deportation policies. More recently, he targeted India for purchasing Russian oil and threatened penalties against nations providing Cuba with oil. In January, he even threatened (though later paused) tariffs against eight European countries that opposed his attempt to acquire Greenland.

Many of these actual and threatened tariffs were justified under the International Emergency Economic Powers Act (IEEPA), a legal basis now deemed unlawful by the Supreme Court’s ruling.

The administration has outlined alternative legal justifications for reconstructing its sanctions regime without relying on IEEPA, primarily focusing on the Trade Act of 1974. Trump announced Friday his intention to impose a 10 percent “global tax” under Section 122 of that act and initiate new negotiations under Section 301. However, these authorities are unlikely to grant him the same expansive latitude in using tariffs as a coercive measure. These laws are designed to address unfair trade practices—not, for example, preventing the sale of Greenland—and involve more extensive review processes. Section 122 tariffs are capped at 15 percent, significantly lower than the sweeping threats Trump has made, and require congressional approval to extend beyond 150 days.

“You can theoretically still use them as leverage in trade negotiations, but it just takes a lot longer,” Fishman explained. “It’s not like a crisis can break out somewhere in the world, and Trump can threaten 30 percent tariffs to try to fix it.”

This does not signify an end to Trump’s economic warfare tactics. The Supreme Court’s ruling did not address the president’s authority to impose sanctions under IEEPA, a less contentious area. Trump has often conflated tariffs—duties on imported goods—with sanctions, legal measures restricting economic transactions with specific countries or entities. White House officials have sometimes demonstrated confusion regarding the distinction.

While Trump has employed sanctions, he generally prefers tariffs, believing they bolster global confidence in the dollar and can achieve foreign policy objectives while simultaneously benefiting the U.S. Economy—a view disputed by many economists. Following today’s decision, he may be compelled to revert to the “sanctions-happy” approach of previous administrations.

As Trump acknowledged on Friday, IEEPA grants him the power to impose a complete trade embargo, effectively “destroying the country,” but not to “charge a dollar.”

Trump’s use of tariffs has yielded mixed results. Mexico has halted oil shipments to Cuba, contributing to the island’s economic crisis. Tariff relief reportedly played a role in bringing Thailand and Cambodia to the negotiating table during a border dispute last summer. However, countries capable of retaliating, such as China, have pushed back with their own forms of economic coercion.

With the immediate aftermath of the Supreme Court’s decision still unfolding, significant political shifts are not immediately expected. India is unlikely to drastically alter its purchases of Russian oil overnight. However, some countries may feel more emboldened in future confrontations with the U.S., whether economic or otherwise.

The era of waking up to international crises triggered by the president’s threats of ruinous tariffs on social media may be over. But with a key instrument of economic warfare removed, the question remains whether Trump will be more inclined to resort to more conventional forms of conflict.