The court fight over Trump's emergency tariffs and the Supreme Court's ruling

The case moved quickly to the Supreme Court. Two family-owned toy companies asked the justices to step in in June,^[15] and after hearing arguments at the end of July,^[16] the appeals court ruled on August 29 that most of the tariffs were illegal but left them in place for now.^[17] The administration asked the Supreme Court to reverse the ruling,^[18] and in September the court agreed to hear the case on a fast track, raising the prospect of refunds for importers.^[7][19] At arguments in November, a majority of the justices sounded skeptical of the tariffs,^[20] and Trump warned that a loss would leave the country "defenseless."^[21] Costco was among the companies that sued to preserve their right to refunds.^[22]

On February 20, 2026, the Supreme Court ruled 6-3 that the emergency law does not authorize the president to impose tariffs.^[23][1] Trump called the ruling a "disgrace"^[1] and announced a temporary 10% global tariff for 150 days under the Trade Act of 1974, keeping other tariffs in place, then said he would raise it to 15%.^[24][3] Stocks fell after the increase.^[25] In his State of the Union address, Trump called the decision unfortunate.^[26] Two dozen states sued over the new global tariff,^[27] and in May a split panel of the Court of International Trade ruled against it.^[28]

The ruling opened the way for refunds of tariffs already paid, estimated at about $175 billion.^[29] FedEx sued for a full refund and said it would return the money to the customers who paid,^[30][29] and a federal judge ruled in March that companies were entitled to refunds.^[31] Customs opened a refund portal in April^[32] for an estimated $166 billion owed to more than 330,000 importers.^[33] Refunds reached about $100 billion by the end of July^[2] and helped push the June federal budget deficit to $120 billion.^[34] The administration fought a trade judge's order to refund every importer that paid, including those that had not sued.^[35][36] Large companies reported big refunds, including $2.9 billion for Walmart, which said it would fund price cuts, and $994 million for Target.^[37][38] Most businesses were not passing refunds on to consumers,^[39] though shippers such as FedEx and UPS began crediting customers who had paid tariffs on imported packages,^[40] and Illinois Gov. JB Pritzker demanded direct payments to families.^[41]

The administration also set out to replace about $1.6 trillion in tariff revenue lost to the ruling.^[42] As the temporary global tariff expired in July, it imposed tariffs of 10% and 12.5% on goods from 60 trading partners, including the European Union, over what it called lax enforcement of bans on imports made with forced labor.^[4] Critics said the tariffs were less about forced labor than a way to replace the struck-down duties,^[43] Australia's trade minister called them "completely unjustified,"^[4] and an outside analysis found that they replaced less than 60% of the lost revenue.^[44] Small businesses sued within a day,^[44] 25 Democratic-led states followed in August,^[45] and at the end of September a three-judge panel of the Court of International Trade heard their argument that the duties, covering 99.4% of U.S. imports, exceed the president's authority.^[5] Trump's other second-term tariffs are followed in a separate arc.