Quick Facts
- Supreme Court ruled 6-3 that Trump could not use emergency powers to impose tariffs on 180+ countries
- Fashion industry saw tariffs on apparel and footwear jump from 13% to 36% after April 2025 ‘Liberation Day’ duties
- Businesses could receive $175 billion in refunds, with Trump immediately imposing new 15% global tariffs under different authority
The Supreme Court delivered a major blow to President Trump’s trade agenda February 20, ruling 6-3 that he lacked authority to impose sweeping tariffs using emergency economic powers.
The decision invalidates Trump’s ‘Liberation Day’ tariffs imposed April 2, 2025, on imports from more than 180 countries. Chief Justice John Roberts wrote that Trump asserted “the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time.”
The fashion industry felt immediate relief. Apparel and footwear tariffs had spiked from 13% to 36% after Trump’s emergency declaration, according to the BoF-McKinsey State of Fashion 2026 report. Fashion stocks rose modestly following the ruling, with companies from VF Corp to Abercrombie & Fitch gaining up to 4%.
“This ruling provides relief at a time when cost pressures have been significant,” said Matt Priest, president of Footwear Distributors and Retailers of America.
The emergency tariffs generated approximately $130 billion through December 2025, with total collections potentially reaching $175 billion. Analysts estimate refunds could range from $85 billion to $175 billion, depending on final calculations.
Trump responded immediately by signing an executive order imposing a 10% global tariff Friday night, then raising it to 15% Saturday. The new duties rely on Section 122 of the Trade Act of 1974, which limits such tariffs to 150 days without congressional approval.
The Penn Wharton Budget Model estimated the struck-down tariffs would have increased household costs by $1,000 in 2025 and $1,300 annually thereafter. The duties would have reduced economic output by 0.4% and eliminated more than 428,000 jobs.
RSM chief economist Joseph Brusuelas called the economic impact “narrow” but noted “enormous potential winners” in retail and manufacturing sectors.
The ruling only affects emergency tariffs imposed under the International Emergency Economic Powers Act. Steel, aluminum, and automotive tariffs under Section 232 remain in place, as do extensive duties on Chinese imports from Trump’s first term.
Trade Representative Jamieson Greer had previously told The New York Times the administration would “start the next day” to reimpose duties under other authorities if the Supreme Court ruled unfavorably.
The National Retail Federation praised the decision for providing “much-needed certainty for U.S. businesses and manufacturers, enabling global supply chains to operate without ambiguity.”
Read more: US Supreme Court Overturns Trump’s Emergency Tariffs
