US Supreme Court Strikes Down Trump Tariffs in Landmark Ruling
WASHINGTON, 20 February 2026 – In a historic decision that has sent shockwaves through global financial markets, the United States Supreme Court ruled on Friday that several of President Donald Trump’s most aggressive trade tariffs are unconstitutional. The court found that the administration overstepped its authority by using national emergency laws to bypass Congress in the implementation of these duties. This ruling comes at a critical time as the US economy grapples with a record-breaking trade deficit and a cooling industrial sector.
The End of a Trade Era: Supreme Court Intervention
The ruling, delivered just minutes ago, specifically targets tariffs that were justified under the guise of national security and emergency powers. The justices determined that the legal basis for these duties was insufficient, marking a significant legal defeat for the Trump administration’s “America First” trade policy.
Key Implications of the Ruling
- Potential Refunds: Economists estimate that the US government may be required to refund more than $175 billion in collected duties to affected businesses.
- Market Reaction: Despite the geopolitical uncertainty, the German DAX has managed to hold the 25,000-point mark as investors weigh the potential for eased trade tensions.
- Legislative Rebound: While this specific set of tariffs has been struck down, legal experts note that the President still retains other statutory options to pursue protectionist measures, though they will now face stricter scrutiny.
Understanding the US Tariff System: The HTS Framework
For European exporters, navigating the US market requires a deep understanding of the Harmonized Tariff Schedule (HTS). Despite the current legal turmoil, the HTS remains the primary tool for trade classification in the United States.
| Feature | Description |
|---|---|
| Official Name | Harmonized Tariff Schedule of the United States (HTSUS) |
| Effective Date | 1 January 1989 |
| Structure | 10-digit classification code based on name, use, and material |
| Management | U.S. International Trade Commission (USITC) |
The Role of HTS Codes
An HTS code is a unique ten-digit number used to determine the specific customs duties or taxes for items imported into the USA. It is an extension of the international Harmonized System (HS) used by most trading nations, but with two additional digits for national US statistical and duty purposes. Chapter 99 of the HTS is particularly significant for exporters, as it often contains the temporary or “emergency” duties that have been the subject of recent litigation.
Economic Context: 2025-2026 Trade Performance
The Supreme Court’s decision follows a year of contradictory economic signals. In 2025, the United States recorded a new import record despite the high-tariff environment. Data from the last 24 hours indicates that the US trade deficit narrowed only slightly in 2025, leading some economists to label the aggressive tariff strategy a “self-inflicted goal” (Eigentor).
Industrial Growth vs. Trade Barriers
While the US industrial production rose by 0.6% in January 2026—an 11-month high—the broader economy has been hampered by the longest government shutdown in US history and a weakening labour market. Large corporations have had mixed reactions; for instance, the pharmaceutical giant Novartis recently announced multi-billion dollar investments in new US plants, a move President Trump cited as a victory for his trade policies just moments before the court ruling was announced.
Frequently Asked Questions (FAQ)
What is an HTS code?
An HTS (Harmonized Tariff Schedule) code is a 10-digit classification number used by US Customs to identify products and determine the applicable duty rates for imports.
How does the Supreme Court ruling affect current exports?
The ruling declares certain tariffs illegal. While this may lead to a reduction in costs for specific goods, exporters should consult with customs brokers to see if their specific HTS codes are affected by the struck-down emergency duties.
When was the HTS system introduced?
The Harmonized Tariff Schedule of the United States was enacted by Congress and became effective on 1 January 1989, replacing the previous Tariff Schedules of the United States.
Why did the Supreme Court strike down the tariffs?
The court ruled that the administration misused laws intended for national emergencies to impose broad economic tariffs without the necessary Congressional approval, making them unconstitutional.