[CTC] Rethink Trade: Supreme Court Limits Trump’s Power, Constraining His Ability to Unilaterally Punish Enemies, Reward Allies with Tariffs

[Arthur Stamoulis]

*For Immediate Release:* February 20, 2026

*Press Contact: *Doug Farrar douglas at maywoodstrategies.com



*Supreme Court Limits Trump’s Power, Constraining His Ability to
Unilaterally Punish Enemies, Reward Allies with Tariffs*



*Blow to Trump, but U.S. Tariffs Rates Unlikely to Decline Broadly*



Washington, D.C. — In response to today’s Supreme Court ruling on the
consolidated cases challenging President Trump’s imposition of expansive
tariffs using theInternational Emergency Economic Powers Act (IEEPA), *Lori
Wallach, Director of the Rethink Trade program at the American Economic
Liberties Project, said:*



“A Supreme Court otherwise inclined to endlessly expand Trump’s authority
just restricted his go-to tool, ruling that U.S. presidents do not have the
power to unilaterally deploy tariffs and dole out punishment and favor to
specific companies and economic sectors, friends and family, and entire
countries.



Trump’s tariff malpractice and abuse of the IEEPA statute to impose
expansive and ever-changing tariffs has led the court to deny all future
presidents speedy emergency tariff authorities that, applied in a more
strategic, targeted, and judicious manner, could be useful.



This decision is unlikely to alter U.S. tariff rates or policies much
because there are other statutes that could provide broad authority for
Trump to impose tariffs.



In the immediate term, Section 122 of the Trade Act of 1974 explicitly
authorizes a president to impose tariffs up to 15% for up to 150 days on
any and all countries related to “large and serious” balance of payments
issues, which relates to the huge chronic U.S. trade deficit. Section 122
does not require investigations or impose other procedural limits. The most
open-ended potential source of presidential tariff authority, Section 338
of the Trade Act of 1930, allows a president to proclaim tariffs of up to
50% with no time limit on any countries that the president determines
discriminate against U.S. trade or commerce by action or regulation. The
unbounded presidential tariff authority of Section 338 could trigger
another round of court challenges, even if in contrast to IEEPA Section 338
explicitly authorizes tariffs. But like the IEEPA challenge that would take
time to resolve.



With the loss of 88,000 American manufacturing jobs since Trump returned to
office and the 2025 trade deficit remaining stubbornly high, to date the
results of Trump’s often mistargeted, on-off tariffs are the opposite of
his campaign promises. Trump’s tariff malpractice includes lowering tariffs
on China, a country with mercantilist trade practices that fuel the U.S.
trade deficit, while imposing 50% tariffs on Brazil, a nation with which
the United States has a trade surplus, because the country held a
Trump-allied former president accountable for a failed coup. Rather than
prioritizing more balanced trade and the rebuilding of domestic
manufacturing, the Trump administration is using tariffs to attack other
nations anti-monopoly laws on behalf of Big Tech, with Commerce Secretary
Lutnick even offering to cut U.S. steel tariffs that domestic manufacturers
and unions support if the European Union eliminates Big Tech regulations.



*Read Rethink Trade’s **analysis*
<https://protect.checkpoint.com/v2/r01/___https:/rethinktrade.org/article/supreme-court-tariff-case-whats-at-stake/___.YzJ1OmFlbHBlY29ub21pY2xpYmVydGllczpjOm86MDMzOWRiNmM2YjkzOTYyZGJhNDZmZGFjZTQwY2RkYTQ6NzozNjBlOjA5ZTkzYmJjNTQxOGFlMzAyMDYyMzM0NjU0ZjViNjVmZWNlNjlkZWFiZDlkNzU2YmExODVhM2Y4OTI3YTUzNjU6cDpUOkY>*
of
the issues and stakes of this case.* Rethink Trade supports the strategic
use of tariffs to achieve various policy goals. However, as our analysis of
the stakes in this case notes: “*It was not an accident that the Founders
granted sole control over the substance of trade policy to Congress. A
trigger for the Revolutionary War and U.S. independence from England was
the unilateral imposition of tariffs on the colonies by King George to
raise funds for his European wars. The Boston Tea Party was our nation’s
first trade war! Having tariff and trade policy not set by one person — the
president — but rather by a group elected by geographically distinct blocs
of Americans — Congress — reflects the enormous impact international
commercial policy has on a nation and the power associated with setting
it.”*



*See Rethink Trade’s analysis of manufacturing and trade outcomes under
Trump **here*
<https://protect.checkpoint.com/v2/r01/___https:/rethinktrade.org/trumptrademanufacturing/___.YzJ1OmFlbHBlY29ub21pY2xpYmVydGllczpjOm86MDMzOWRiNmM2YjkzOTYyZGJhNDZmZGFjZTQwY2RkYTQ6Nzo3NDYxOjRlOWI4YzNkN2NmMGYzZGRhNzY0ZThlNjNmZjI4NGZmNWY1OGI0YjQyNTk3MjJlOTRiNzc2ODg0YTNkMmI1MGU6cDpUOkY>
*. *
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