Trump Tariffs: Supreme Court Ruling & Impact on Businesses | BBC, CBC, CTV News

Supreme Court Strikes Down Trump Tariffs, Administration Raises Rates in Response

February 21, 2026 – The Supreme Court on Friday ruled that tariffs imposed by former President Donald Trump using the International Emergency Economic Powers Act (IEEPA) were unlawful. The decision has sparked calls for refunds to businesses and prompted the Trump administration to swiftly raise global tariffs to 15%.

The court’s ruling effectively invalidates a cornerstone of Trump’s trade policy, which involved imposing tariffs on a wide range of imports from nearly every country the U.S. Trades with. Trump had initially announced a flat 10% rate on imports in April, arguing it would level the playing field and address “unfair” trade relations.

The legal challenge originated from claims that Trump exceeded his authority by invoking IEEPA to justify the tariffs. Lower courts had previously sided with opponents, finding that the law did not grant the president the power to impose such broad levies. The Supreme Court’s decision affirms those rulings.

Following the ruling, business leaders and political figures have urged the administration to issue refunds to importers who paid the now-illegal tariffs. An analysis by the University of Pennsylvania estimates that as much as $175 billion could be due back to businesses.

The National Retail Federation released a statement calling for a “seamless process to refund the tariffs to U.S. Importers,” arguing that the refunds would “serve as an economic boost and allow companies to reinvest in their operations, their employees and their customers.”

Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce, echoed this sentiment, stating that “swift refunds of the impermissible tariffs will be meaningful” for hundreds of thousands of small business importers who experienced increased costs and supply chain disruptions.

However, the Trump administration responded to the Supreme Court’s decision by announcing an increase in global tariffs from 10% to 15%. This move, described as a major escalation of trade policy, came just hours after the court’s ruling.

The administration’s decision to raise tariffs despite the legal setback signals a continued commitment to protectionist trade measures. Ajay Bagga analyzed the situation, noting the swiftness of the response.

The Supreme Court justices themselves reportedly engaged in debate over the appropriate treatment of the Trump and Biden administrations in the case, according to NBC News. The differing views highlight the complex legal and political considerations surrounding the use of emergency powers and trade policy.

Costco has already filed a lawsuit seeking a “full refund” of the tariffs it paid, according to reports. The company’s action is likely to be followed by other businesses seeking to recoup the costs imposed by the now-invalidated tariffs.

The ruling and subsequent actions are expected to have significant political and economic consequences, impacting businesses, consumers and international trade relations. The calls for refunds and the administration’s decision to raise tariffs suggest a protracted period of uncertainty and potential further legal challenges.

Canadian small businesses are also reacting to the ruling, with many stating they had no time to adjust their business models to account for the change.