Decision Affirms Only Congress May Tax Americans; Ends Unlawful "Emergency" Tariffs That Are Driving Up Consumer Prices

LOS ANGELES, Feb. 20, 2026 /PRNewswire/ -- In a landmark decision safeguarding consumers and the Constitution, the Supreme Court of the United States today struck down President Donald Trump's sweeping "emergency" tariffs, holding that the President lacked authority under the International Emergency Economic Powers Act (IEEPA) to impose tariffs. The Court concluded that IEEPA "does not authorize the President to impose tariffs" and that the President must "point to clear congressional authorization" for such extraordinary power — which he could not do.

Lead counsel for Consumer Watchdog's amicus brief, Alan B. Morrison, Adjunct Professor at George Washington University Law School, called the ruling "a resounding victory for the principles of separation of powers." Morrison said the decision "returns to Congress the question of whether tariffs are good for America and, if so, how much and on what imports, where it belongs." He emphasized that the Court rejected the President's claim that IEEPA "allowed him to impose massive taxes on American businesses and consumers, in whatever amount he decided, for whatever products he selected, and for however long he preferred."

The ruling adopts the core arguments advanced by Morrison on behalf of Consumer Watchdog in its amicus curiae brief, concluding that the International Emergency Economic Powers Act (IEEPA) does not permit a President to unilaterally impose massive tariffs that function as taxes on the American people. 

The Court rejected the notion that two words in IEEPA — "regulate" and "importation" — could bear the weight of "a sweeping delegation of Congress's power to set tariff policy." It held that such extraordinary authority requires "clear congressional authorization," which IEEPA does not provide. The Court emphasized that tariffs are "very clear[ly] . . . a branch of the taxing power," and that the Framers gave "Congress alone" the power to impose tariffs during peactime. The Court concluded that the President claimed "the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope" — authority that IEEPA simply does not confer. 

The Court rejected the argument that emergency statutes should be read expansively, warning that emergency powers can become a "ready pretext for usurpation" of congressional authority "This is a decisive victory for consumers and for the Constitution," said William Pletcher, Litigation Director of Consumer Watchdog. "The Court made clear that no President can use emergency powers as an end-run around Congress's exclusive taxing power. Americans cannot be taxed by executive fiat."

A Win for Consumers

Consumer Watchdog argued that the tariffs operated as a regressive tax on families while bypassing the constitutional checks that protect the public from unchecked executive power.

The challenged tariffs drove up prices on everyday goods — from household essentials to school supplies — hitting working families the hardest. According to customs officials, more than $133.5 billion in tariffs were collected in 2025. Although the Court did not order refunds in this case, refund litigation is already underway. Californians have felt that burden acutely: businesses in the state paid at least $11.3 billion in tariffs just through May — more than any other state — and California's economy has already absorbed multibillion-dollar hits to state revenue and broader economic activity tied to tariff cost increases. 

"The tariffs raised prices across the economy, and consumers paid the price every time they went to the store," said Pletcher. "Today's decision restores a basic constitutional rule: the power to tax belongs to the people, exercised through Congress — not to the President acting alone."

Refunds Must Not Bypass Consumers

With the unlawful tariffs now invalidated, businesses that paid tariffs at the border are expected to pursue refund claims. However, the Supreme Court did not itself order refunds.

As Alan Morrison explained, "Today's decision did not order any refunds of the illegally collected tariffs because the plaintiffs only asked the Court to stop tariffs that had not yet been collected." He added that "Litigation is underway to seek refunds of some of these tariffs, with other cases certain to follow." 

Morrison further noted that, in defending the tariffs pending appeal, "the Trump administration argued that the plaintiffs could always seek full refunds," and said "it remains to be seen whether they will still fight to keep the more than the estimated $100 billion in collected tariffs that the Administration is using to plug holes in its budget." 

Consumer Watchdog cautioned that companies that passed tariff costs on to consumers must not be allowed to retain windfalls at consumers' expense.

"Many companies explicitly passed these tariffs through in higher prices — sometimes even labeling them as 'tariff surcharges,'" said William Pletcher, Litigation Director of Consumer Watchdog. "What was passed up should be passed back down. If businesses receive refunds for costs they already shifted onto families, basic fairness and consumer-protection law may require that those savings be returned down the chain."

"Refunds should not become a corporate windfall," Pletcher added. "Consumers paid these unlawful tariffs. They deserve to see the benefit when those tariffs are undone."

A Constitutional Line Reaffirmed

In its brief, Consumer Watchdog warned that reading IEEPA to allow unlimited tariffs would hand the President a blank check — with no limits on rate, scope, duration, or meaningful judicial review. The Court agreed, concluding that IEEPA does not clearly delegate such sweeping authority and that Congress must speak clearly before transferring that kind of power.

A plurality of the Court applied the major questions doctrine, explaining that Congress would not delegate such "highly consequential power" through ambiguous language. Three Justices agreed with the result based on ordinary statutory interpretation. The Court affirmed the Federal Circuit's invalidation of the tariffs and vacated the parallel District Court case for lack of jurisdiction, holding that challenges to tariff measures fall within the exclusive jurisdiction of the Court of International Trade.

The decision reinforces the principle that emergency statutes designed for sanctions and national crises cannot be transformed into permanent revenue-raising tools.

What Comes Next

With the unlawful tariffs now void, policymakers, regulators, and courts will face questions about how refund relief is implemented — and whether consumers who bore the brunt of higher prices are made whole.

"Today's ruling makes clear that constitutional limits still matter," Pletcher said. "The next step is ensuring that the people who paid the price for these unlawful tariffs are not forgotten."

About Consumer Watchdog

Consumer Watchdog is a nonprofit, nonpartisan public-interest organization dedicated to protecting consumers from unfair business practices and unlawful government action. The organization frequently appears before state and federal courts to defend consumer rights and constitutional accountability.

Acknowledgements

Consumer Watchdog acknowledges Alan Morrison of George Washington University Law School, a nationally recognized Supreme Court litigator and constitutional law expert, and Will Planert of Morris, Manning & Martin LLP, an experienced international trade lawyer, for their work on the case.

View original content to download multimedia:https://www.prnewswire.com/news-releases/supreme-court-strikes-down-trump-tariffs-vindicating-consumers-and-the-constitution-says-consumer-watchdog-302693864.html

SOURCE Consumer Watchdog