The Supreme Court on Feb. 20 ruled that President Donald Trump’s tariffs imposed under a law used for national emergencies are unconstitutional, marking a rare loss for the administration at the conservative-majority court.
The trade measures, which affected hundreds of billions of dollars of imports, took effect early last year and prompted cost concerns from health systems, drug companies and devicemakers reliant on imported devices and medications.
Seven things to know:
1. In a 6-3 vote, the justices determined that President Trump exceeded his authority by imposing the tariffs under the International Emergency Economic Powers Act. The law, enacted in 1977, allows the president to regulate economic activities following the declaration of a national emergency. Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh voted in dissent.
2. In a Feb. 20 opinion, Chief Justice John Roberts said the Trump administration could not identify any statutes in which Congress has previously determined “that IEEPA should be interpreted to grant the President an expansive peacetime tariff power.”
“We hold that IEEPA does not authorize the President to impose tariffs,” Mr. Roberts wrote.
3. President Trump invoked the IEEPA in early 2025 to impose sweeping tariffs to reduce the nation’s trade deficit, decrease the reliance on foreign goods and encourage more domestic manufacturing. The move quickly faced legal resistance, with a dozen states and a coalition of small businesses suing to block the tariffs, arguing the president exceeded his authority.
Meanwhile, U.S. Commerce Department data shows the U.S. trade deficit grew to $70.3 billion in December, up from $53 billion in November. In 2025, the overall trade gap was $901.5 billion, down $2.1 billion from 2024 but still one of the largest annual deficits seen since 1960. Some economists say the figures suggest the tariffs have had limited influence on the trade balance.
“After all the tariff headlines and swings in the data, the trade deficit barely budged in 2025,” Oren Klachkin, a financial market economist at Nationwide, wrote in a note cited by Bloomberg.
4. The decision blocks reciprocal tariffs the White House implemented in April, including a 10% baseline tariff for all counties and a 34% tariff for China. It also upends a 25% tariff on certain goods from Canada, China and Mexico the administration imposed for the countries’ alleged failure to block the flow of fentanyl into the U.S. Tariffs on steel and aluminum will remain in effect, as they were enacted under different laws, according to NBC News.
5. Within hours of the ruling, President Trump signaled that he would pursue alternative legal avenues to reinstate tariffs in Feb. 20 Truth Social post and during a White House news conference. The President said he would sign an executive order imposing a 10% global tariff under Section 122 of the Trade Act of 1974. He also condemned the Supreme Court’s ruling, saying he was “absolutely ashamed” of the justices who voted to strike down his tariff authority.
6. Medical devices and generic drugs have been particularly exposed to tariffs given the sector’s reliance on overseas manufacturing. About 69% of U.S.-marketed medical devices are manufactured entirely outside of the U.S., including significant volumes from Mexico and China. The pharmaceutical supply chain is similarly global, with the U.S. relying heavily on China for active ingredients used in many generic drugs.
7. The ruling puts more than $175 billion in tariff collections at risk of refunds, Penn-Wharton Budget Model economists told Reuters. Companies that have already paid the blocked tariffs may be able to seek refunds from the Treasury Department, though the process and timeline remain unclear. The Trump administration may also reimpose tariffs under different laws, The New York Times reported.
Editor’s note: Becker’s has reached out to the White House for comment.
