Could the tariff war be over after the Supreme Court ruling?

President Donald Trump has been imposing levies across broad swathes of the economy since “Liberation Day” in April 2025 after he was sworn in for his second presidential term last January. In his inauguration speech he promised “to tariff and tax foreign countries to enrich our citizens”, claiming this would boost the US economy and reduce the US trade deficit.

Now, however, the Supreme Court has restricted his go-to tool. On 20 February 2026, the US Supreme Court upheld a ruling by the lower courts and struck down the “reciprocal” tariffs imposed in April 2025 that have altered the global goods trade.

But, as I wrote last September, the tariff war is unlikely to be over. Even if the blanket tariffs on all trading partners were deemed to be illegal, the President still has the power to impose double-digit tariffs on some of the most significant traded goods in global trade.

What will all of this mean for business? First, let’s unpack this latest legal decision.

The appeals court decision is consistent with longstanding US separation of powers

Previously, Trump has used a 1977 legislation granting emergency economic powers (the International Emergency Economic Powers Act (IEEPA)) as authority for the reciprocal tariffs. This was struck down by the US Court of Appeals for the Federal Circuit last September. Additionally, imposing tariffs to stop the influx of drugs such as Fentanyl and migrants (the reason given for Canada, Mexico, China) goes beyond the powers granted to the President.

This ruling upholds the decision in May of last year of the US Court for International Trade that the President doesn’t have authority to impose such across-the-board tariffs without the authorisation of Congress. One argument from the White House that was not effective was that lifting the tariffs would leave the US unable to repay the trillions in tariff revenues pledged by other countries.

There is a longstanding principle that Congress makes laws, including trade laws. For instance, the “fast track” authority that had allowed the President to negotiate trade deals, and Congress could only pass it or not, without changes, was not renewed in 2021. Now, the President must receive Congressional approval of the terms of any deal.

But the President can continue to impose tariffs

The President can still impose tariffs, however, under different legal authority. On the same day the Supreme Court decision was made, the President announced a new 10% – later increased to 15% – global tariff under Section 122 of the Trade Act of 1974. The Act allows the President to impose tariffs of up to 15% and up to 150 days to address trade deficits. After that period, Congress has to agree to the tariff.

The President can also continue to use other tariffs which were not part of the Supreme Court decision. Section 232 tariffs are duties imposed on imported goods that threaten national security under the 1962 Trade Expansion Act. The sectoral tariffs on steel and aluminium, for instance, are imposed under this authority. Tariffs may be imposed after a Commerce Department investigation concludes that there are threats to national security.

This 50% tariff for other countries could potentially be expanded to cover other imports, and items such as copper have already been added to the initial list. This is important not just because of the magnitude of the tariffs but in terms of the coverage, due to the amount of goods that use commodities such as copper and aluminium as inputs. For instance, some 400 UK products have steel or aluminum inputs, which will be subject to this tariff (set at a lower 25% due to the UK-US trade deal). The coverage of this set of tariffs is broad and economically damaging to the UK and other US trading partners.

Impact on other countries and the world economy

Although the Supreme Court ruling has deemed the centrepiece of the tariff regime – the reciprocal tariffs – to be illegal, the US administration will likely consider using other legal authority to impose tariffs. This will continue to generate considerable uncertainty to global trade and also to existing trade deals, if companies and countries seek reimbursement from the now-illegal reciprocal tariffs. Also, as the premise of trade deals already agreed is now under question, it could potentially lead to re-opening those negotiations.

For businesses, it will likely mean more delays to shipping to the US as the 150-day limit to the new global tariffs looms large. This uncertainly will continue to dampen international commercial activity and global economic growth.

Takeaways for business

What is certain is that the tariff wars will continue but in a different form and continue to generate significant uncertainty for businesses and the world economy.

For businesses, this means that being nimble is important if a global value chain needs to be moved due to changed tariffs. Executives need to consider if they have a Plan B, Plan C and Plan D.

Supply chain changes are normally costly, so it’s essential to work to different scenarios and monitor for changes that could trigger a change.

In sum, it’s evident that the only certainty is uncertainty. So, companies need to be clear about what’s central for their strategy and can make tactical changes as required in a timely fashion.