Supreme Court Limits Presidential Tariff Power in Landmark Ruling
A landmark Supreme Court ruling on 21 February 2026 has curbed the president's power to impose tariffs without Congressional approval. The decision struck down Trump's use of a 1977 emergency law for tariffs but left existing trade deals with the EU, China, and Mexico untouched. Markets reacted swiftly, with European stocks falling and the S&P 500 set to erase Friday's gains.
The court's decision centred on Section 122 of the Trade Act of 1974, which permits temporary 150-day tariffs. Under the new ruling, any future tariffs beyond this period will require lawmakers' approval. While the verdict does not automatically remove current levies, it restricts the president's ability to introduce new ones unilaterally.
The Trump administration downplayed the impact, insisting the ruling would not disrupt its broader trade strategy. Officials also warned US trading partners to honour existing agreements despite the legal shift. Yet uncertainty lingers over major foreign investment pledges in the US, many of which remain unfulfilled.
Businesses now face potential delays or changes to long-term plans, particularly those tied to reshoring supply chains. The EU responded cautiously, stating it would review the ruling while maintaining dialogue with Washington to ensure trade stability.
The Supreme Court's decision reshapes how future tariffs are applied, shifting authority from the White House to Congress. Many existing tariffs will stay in place for now, but companies and investors must navigate a more complex approval process. Markets have already shown signs of unease, reflecting broader concerns about trade stability.
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