【By Observer Net Columnist Shen Yi】

Hello everyone, I wish you all a dragon spirit and success in the Year of the Horse! Welcome back to the first episode of "Yi Yu Dao Po" after the Spring Festival. Today we'll talk about the latest ruling of the U.S. Supreme Court.

The U.S. Supreme Court ruled on February 20th with a vote of 6-3 that the large-scale global reciprocal tariff measures implemented by the Trump administration under the International Emergency Economic Powers Act (IEEPA) of 1977 lacked clear legal basis, and most importantly, it determined that it exceeded presidential authority, constituting an overreach, and its actions were essentially unconstitutional, thus the ruling was invalid.

The majority opinion was drafted by Chief Justice John Roberts of the U.S. Supreme Court, who, along with the other five judges, agreed that the U.S. Constitution Article I clearly states that Congress has the power to levy taxes and tariffs, and the executive branch (i.e., the president) cannot independently impose taxes or tariffs without congressional authorization.

The majority opinion cited what is called the "major questions doctrine," stating that when it comes to major economic and political issues, explicit authorization from Congress is required. However, the IEEPA allows the president to regulate imports and exports during emergencies, but does not explicitly mention the imposition of tariffs, only the regulation of imports and exports, so it cannot be used as a basis for taxation.

Judges supporting the majority opinion include liberal justices Sonia Sotomayor, Breyer, and Ketanji Brown Jackson, as well as two judges nominated by Trump who also joined this camp, forming a 6-3 majority (out of nine justices).

The three dissenting conservative judges are Brett Kavanaugh, Clarence Thomas, and Samuel Alito. Kavanaugh wrote the dissenting opinion, arguing that the wording of the IEEPA and long-standing administrative practice should be understood as allowing the president to use tariffs as a routine tool for regulating imports. Kavanaugh argued that tariffs are not a big deal, and once it comes to regulating imports, tariffs are inherently included as a tool, and criticized the majority opinion for taking a literal, narrow interpretation of the IEEPA—being overly focused on wording, because the word "tariff" is not mentioned, they believe tariffs are not included.

Thomas and Alito also concurred with Kavanaugh's view, arguing that the president's tariff powers should not be limited in this way by the U.S. courts. Both sides noted that the reorganization of liberals and conservatives in this ruling did not completely follow party lines or the principle of presidential nominations. It is interesting to note that among the three conservative judges nominated by Trump, two joined the majority opinion, while the conservative judges nominated by George H.W. Bush and George W. Bush remained in the dissenting camp, together with one judge nominated by Trump, forming the so-called dissenting camp.

This indicates that the impact of this case may be more reflected in the domestic political level in the United States, especially regarding the constitutional powers of the U.S. president, and its impact on U.S. tariffs or foreign policy may be smaller than many people imagine.

On February 20, 2026, in Washington, D.C., the U.S., Trump held a press conference on the same day after the U.S. Supreme Court ruled his tariff policy illegal, stating that he would sign an order based on Section 122 of the 1974 Trade Act to impose a 10% import tariff on global goods for 150 days, replacing some emergency tariffs previously deemed illegal by the U.S. Supreme Court.

Specifically, it is clear that the U.S. Supreme Court only conducted a constitutional review and will refer part of the cases back to lower courts or maintain the original judgment. As a result, in the specific cases, because it confirmed that the IEEPA did not grant the U.S. president the power to impose tariffs. These cases, which were consolidated for trial, include the case of Learning Resources v. Trump and U.S. Selection v. Trump, both of which focused on questioning whether the tariffs imposed by the Trump administration under the IEEPA were legal.

This ruling will have the following impacts: First, in terms of law and institutional framework, it reinforces the confirmation of the principle of separation of powers in the U.S. Constitution, clearly limiting the president's (i.e., the executive branch's) power to impose tariffs under the pretext of emergency without congressional authorization. It reconfirms and strengthens the Congress's leading role in taxation and foreign trade policy.

From the perspective of foreign relations and strategic games, the situation that Trump is facing now is that his main legal basis for taxation has been declared illegal in the domestic politics of the United States and can no longer be sustained. Will the frameworks that benefit the United States through the use of tariff sticks with other countries and regions be overturned? Honestly, it depends on whether they (such as Japan, South Korea, and Taiwan) dare to do so. Generally speaking, they won't dare, unless you are as strong and capable as China, with systematic abilities to engage in a game with the United States—The reality is that regardless of whether the United States overturns the rationality of the tariff collection, we have already obtained a 10% reciprocal tariff. This method is achieved through struggle, based on strength and capability.

For other countries and regions that lack the ability to conduct systematic games, this ruling will not bring immediate substantial impacts. Of course, it will bring some subtle effects, such as giving those entities that have paid tariffs a new space to negotiate within the U.S. judicial system. Similarly, it will give these partners more leverage if they are willing to negotiate with the United States. For example, for China, this is certainly good news, and our negotiation space with the U.S. government will increase.

However, the impact of this matter in the United States is more complex. First, for those commercial groups, consumers, and Democrats who actually collected tariffs, they welcomed it and started to maximize the benefits of the ruling at the practical and political levels, demanding the Trump administration to refund the collected tariffs. This means a long judicial litigation, and at the same time, using this method politically to suppress Trump and limit his almost unrestricted presidential privileges in the United States. These things will make the next step of political games and political struggles in the United States more complicated.

Of course, it is still ongoing, mainly revolving around three issues: whether to refund the collected tariffs, how to rebuild a new legitimate Trump-style tariff system, and how the Trump administration's future trade strategy will be further adjusted.

So you can understand it as a major victory for the U.S. Supreme Court through the system of separation of powers against the expansion of administrative power, a significant suppression and constraint. Jokingly speaking, if Trump really had the idea of being the "first citizen" or "first ruler" or even a "Caesar," then this is indeed a major setback. But from the perspective of tariffs, its impact is relatively subtle and complex, and we can continue to observe.

U.S. Supreme Court

Next, let's talk about the characteristics of the U.S. tariff policy and the basis for it before and after the ruling.

After the ruling, Trump quickly found a response measure, namely, finding Section 122 of the 1974 Trade Act, combining the unaffected Section 301 and Section 232 provisions to build a new tariff system.

Section 122 is known as a "short-term emergency authorization," allowing the president to temporarily impose tariffs when there is a large and serious balance of payments deficit or significant pressure on the dollar's depreciation, with a tariff rate cap usually of 15%, and such tariffs can last no more than 150 days unless extended by legislative action by the U.S. Congress — it must be approved by the U.S. Congress, either individually or through special legislation, to extend the term.

Compared to Sections 301 and 232, it does not require a long-term investigation upfront, and can be deployed in a short period of time, which is one of the reasons it was chosen as a replacement. However, this authorization is not applicable to a long-term, broad tariff system — in plain terms, the U.S. has never used it to tax before. Trump recently used this tool for the first time, or rarely used it to tax.

In contrast, the reciprocal tariffs imposed under the IEEPA were not subject to a 150-day time limit, had a broader scope, covered numerous countries and regions with high tariffs and a uniform global rate, and theoretically could be used to adjust import trade on a large scale after the president declares a national emergency, without the need for congressional authorization.

In other words, the president actually opened a loophole for himself, directly exercising the significant power of imposing tariffs, and without any restrictions. Closing this loophole and preventing the misinterpretation of the law was one of the most important reasons why the U.S. Supreme Court made the ruling.

Section 301 targets so-called unfair trade practices. When initiating 301 measures, the U.S. Trade Representative needs to conduct an investigation, attempt negotiations, and possibly initiate formal trade retaliation procedures, which take a long time and must be based on determining that foreign policies violate trade agreements or are unreasonable. Unlike the IEEPA, which allows unilateral and extensive taxation, Section 301 has very clear technical investigations and legal steps. Section 301 is not used to impose a global uniform rate; it mainly targets specific countries, mainly China — the ones they consider to be unfair trade practices. Its logic is to gain concessions in negotiations or dispute resolution, rather than simply collecting taxes or exerting pressure.

Section 232 is the national security clause, allowing the president to impose tariffs on certain imported products based on national security reasons. Using this clause also requires prior investigation measures, i.e., the U.S. Department of Commerce must investigate whether a particular product threatens national security and undergo an official assessment process.

The Trump administration had this authorization during its second term, and had similar actions in its first term, such as imposing tariffs on steel and aluminum; and these tariff measures — whether under 301 or 232 — were not invalidated in the Supreme Court ruling, meaning that this part of the taxation was recognized.

Regarding the blocking by the U.S. Supreme Court, the Trump administration took a firm stance.

In summary, understanding the emergency state authorization under the IEEPA as the ability to impose tariffs is actually a huge operational space given by the President of the United States to himself in the exercise of administrative power, taking a path of administrative expansion. This caused the President's discretion and administrative authority to exceed the scope prescribed by the U.S. Constitution. This is the core consideration of the U.S. Supreme Court from the perspective of constitutional court to reject it.

Subsequent tariff systems composed of sections 122, 301, and 232 have clear legal procedural constraints, time limits, and investigative requirements. Section 122 provides a short-term transitional authorization, but with limited rates and time frames. Section 301 targets so-called unfair trade practices and requires a long time for investigation and proof; Section 232 requires specific industry assessments of national security. In other words, Trump can no longer freely, quickly, and without constraints to implement so-called high taxes. The state of "making a decision on a whim" is no longer possible after this ruling.

Overall, the result of the ruling is a shift to a new tariff system composed of these three sections. First, Trump can still use tariffs as a tool, and the U.S. tariff system can still serve as a barrier, but due to legal authorization, operational procedures, and continuity, it cannot be as free as under the IEEPA, so the U.S. tariff policy will return to some of its original characteristics, such as being more fragmented, targeting specific industries and specific items, rather than imposing broad, non-discriminatory tariffs on all countries. Second, legally, its authorization and path are more explicit. Third, it will become more relationship-oriented and resilient, making it difficult for leaders to quickly change and adjust according to personal needs. This has crucial implications for other countries responding to U.S. tariff shocks and challenges. Of course, subsequent developments can be continuously observed.

That's all for today. Thank you all.

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Original: toutiao.com/article/7610249532919579171/

Statement: This article represents the personal views of the author.