<p>The <strong>U.S. Supreme Court</strong> on <strong>20 February 2026</strong> ruled that the <span class="key-term" data-definition="International Emergency Economic Powers Act — 1977 U.S. law allowing the President to regulate economic transactions during a national emergency; its scope and limits are relevant to constitutional separation of powers (GS2: Polity).">IEEPA</span> does not empower the President to impose tariffs, invalidating the sweeping duties announced by <strong>President Donald Trump</strong> in 2025. The judgment re‑affirms the constitutional role of <span class="key-term" data-definition="Constitution – The supreme law of the United States that allocates legislative, executive and judicial powers; for UPSC, it illustrates the principle of separation of powers (GS2: Polity).">Constitution</span> in granting tariff authority to <span class="key-term" data-definition="Congress – The bicameral legislature of the United States vested with the power to levy taxes and duties; central to UPSC studies of legislative functions (GS2: Polity).">Congress</span> and limits executive overreach.</p>
<h3>मुख्य विकास</h3>
<ul>
<li>The Court, in a 6‑3 decision, held that <span class="key-term" data-definition="Tariffs – Taxes on imported goods used as trade policy tools; a core topic in GS3: Economy for UPSC.">tariffs</span> must have clear statutory backing, which IEEPA lacks.</li>
<li>Trump’s administration quickly announced a temporary import duty under alternative statutes, effective 24 February for 150 days.</li>
<li>Potential refunds are being sought by over 1,000 companies after an estimated <strong>$180 billion</strong> was collected under the invalidated duties.</li>
</ul>
<h3>महत्वपूर्ण तथ्य</h3>
<p>Before 2025, IEEPA had been used to freeze assets, block transfers and sanction hostile regimes, but never to levy tariffs. Trump invoked IEEPA after declaring national emergencies linked to drug trafficking and trade imbalances, imposing 25% duties on Canada and Mexico, 10% on China, and a reciprocal tariff of at least 10% on most partners, with higher rates for some, notably India.</p>
<p>Post‑ruling, the Treasury cited three alternative authorities:</p>
<ul>
<li><span class="key-term" data-definition="Section 122 of the Trade Act of 1974 – Allows the President to impose up to 15% tariffs to address a serious balance‑of‑payments deficit, limited to 150 days unless extended by Congress (GS3: Economy).">Section 122</span> (Trade Act 1974)</li>
<li><span class="key-term" data-definition="Section 301 of the Trade Act of 1974 – Empowers the President to act against unfair trade practices by a foreign country (GS3: Economy).">Section 301</span> (Trade Act 1974)</li>
<li><span class="key-term" data-definition="Section 232 of the Trade Expansion Act of 1962 – Authorises tariffs on imports deemed a threat to national security, based on a Commerce Department assessment (GS3: Economy).">Section 232</span> (Trade Expansion Act 1962)</li>
</ul>
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