Since February 1, 2025, United States President Donald Trump has issued several executive orders imposing tariffs on countries around the world, including Canada, under the purported authority of the International Emergency Economic Powers Act (IEEPA). Those tariffs were quickly challenged in lawsuits contesting the President’s authority to issue tariffs under IEEPA. The nature of these legal challenges has been summarized in prior Blakes bulletins here and here.
On February 20, 2026, the Supreme Court of the United States released its decision in Learning Resources, Inc. v. Trump (Learning Resources). By a 6-3 vote, the Supreme Court ruled that IEEPA does not authorize the President to impose tariffs. Accordingly, the many tariffs issued by the President purportedly under IEEPA were made without authority.
This bulletin describes the Supreme Court’s ruling and the issues it leaves unresolved.
Background
Since the start of his second presidency, President Trump has issued a series of executive orders imposing tariffs on imports to the United States. Two categories of tariffs were at issue in the cases that reached the Supreme Court: (1) tariffs on Canada, Mexico and China in response to an alleged failure of these countries to curb the flow of drugs and crime into the U.S., and (2) “retaliatory” tariffs that imposed a baseline surcharge on the rest of the world, with additional amounts that varied by country depending on their trade relationship with the U.S.
Article I, section 8 of the U.S. Constitution grants the power to “lay and collect Taxes, Duties, Imposts and Excises” to Congress. As President Trump imposed the tariffs by executive order, their lawfulness depends on whether a congressional statute grants him the necessary authority. The tariff orders primarily invoke the President’s power under IEEPA. Enacted in 1977, IEEPA authorizes the President to take actions that “deal with an unusual and extraordinary threat” where a national emergency has been declared in relation to the threat. Those actions include the power to “regulate…importation”.
In Learning Resources and the associated case, several small businesses challenged the tariff orders on the basis that IEEPA does not provide the President with the required statutory authority to issue them.
The Supreme Court’s Ruling
A majority of the Supreme Court sided with the challengers to the tariffs.
As the Constitution grants the taxing power to Congress, the Government conceded before the Supreme Court that the President has no inherent constitutional authority to impose tariffs during peacetime. The sole question for the Court was whether IEEPA authorizes the challenged tariffs.
The Supreme Court held that it does not. Although IEEPA lists actions that the President may take to “deal with an unusual and extraordinary threat,” that list does not mention the power to issue tariffs or applicable constraints to such a power. For the majority, this omission was significant. Where Congress does grant a tariff power, it tends to do so expressly and subject to careful constraints.
IEEPA’s conferral of a power to “regulate…importation” did not fix that omission. Despite the potentially broad meaning of the word, the power to regulate is typically understood to be distinct from the power to tax. Tariffs might accomplish regulatory ends, but the Government failed to identify any statute in which the power to regulate encompassed the power to tax. Instead, Congress confers these powers separately. Further emphasizing that distinction, no President had previously relied on IEEPA to claim a power to raise revenue.
The majority split over whether to apply the “Major Questions Doctrine,” under which the executive branch must point to clear and express statutory language to claim an authority of major economic and political significance. But this issue was not dispositive, as both factions of the majority concluded that IEEPA does not authorize the President to impose tariffs.
Three Justices dissented. In their view, the ordinary meaning of “regulate…importation” encompasses means of regulation that include quotas, embargoes and tariffs, which they found support for in predecessor statutes to IEEPA and historical practice. Regarding the Major Questions Doctrine, the dissent would have either found it satisfied or else carved out an exception to it for matters related to foreign affairs.
Next Steps
As a result of Learning Resources, the IEEPA tariffs have been ruled unlawful. The President has since instructed the heads of executive departments to stop collecting the IEEPA tariffs. Nevertheless, several issues remain.
First, Learning Resources takes IEEPA tariffs off the table, but it does not directly affect the lawfulness of tariffs issued under other statutes that confer the tariff power Learning Resources found lacking in IEEPA. As a result, the U.S. will likely attempt to reimpose certain of the IEEPA tariffs under other laws. President Trump signaled as much in the immediate aftermath of the ruling by announcing a 10% tariff on all countries effective February 24, 2026 — with certain products exempted, including imports covered by the Canada-United States-Mexico Agreement — this time under section 122 of the Trade Act of 1974. He later increased the amount of this tariff to 15%. Further tariff orders under other statutes are also possible. Whether such tariffs fall within the authority conferred and limits imposed by those other authorizing statutes may also be the subject of future legal challenges.
Second, Learning Resources does not address what will happen with the billions of dollars already collected under the IEEPA tariffs. According to the Supreme Court, those collections were made without legal authority. The entitlement, process and legal issues surrounding the refunding of those collections will be points of dispute going forward.
For more information, please contact the author or any other member of our International Trade or Arbitration groups.
