The Supreme Court of America has given a big blow to President Donald Trump. The court has canceled the huge global tariff (import duty) imposed by Trump. In this historic decision taken on 20 February 2026, the court clearly said that the President has misused the National Emergency laws. According to the court, imposing taxes on one’s own free will without the approval of the Parliament is beyond the President’s jurisdiction and is against the rules of the Constitution.
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What is this big decision of the Supreme Court?
The Supreme Court has given this decision with a majority of 6-3. Chief Justice John Roberts wrote in the judgment that the Constitution has given the power to impose taxes only to the Parliament and not to the President. Trump had imposed these taxes with the help of the ‘Emergency Economic Powers Act’ (IEEPA) of 1977, which the court refused to accept. The court said that if the President is given such powers, it would be a huge and wrong expansion of his powers. After this decision, the Trump administration will not be able to suddenly impose taxes on any country as per its wish.
Which taxes will be removed and which will not be affected?
After this decision, the ‘Liberation Day’ tax imposed in April 2025 will end, in which duty ranging from 10% to 50% was imposed on many countries. Apart from this, special taxes imposed on Canada, Mexico, China and Brazil for different reasons have also been cancelled. However, the old security taxes (Section 232) and unfair trade taxes (Section 301) imposed on steel and aluminum will still continue. After this deduction, the average tax on goods imported into America will reduce from 16.9% to 9.1%.
Impact on market and return of money
This decision of the court has brought great relief to the traders. About $ 133 billion (estimated to be around $ 200 billion) deposited so far in the US treasury can be refunded back. The refund process will be monitored by the Court of International Trade. As soon as this news came, the stock market jumped and Dow Jones saw a rise of 200 points. Small traders have also heaved a sigh of relief and the prices of tea, baby items and clothes may stop rising. At the same time, President Trump has called this decision ‘shameful’.