US Supreme Court blocks tariff authority, triggers $166 bn refunds

On 20 February 2026 the US Supreme Court ruled in a 6‑3 decision that the International Emergency Economic Powers Act does not give the president authority to impose tariffs, confirming that only Congress can levy taxes and duties. The ruling invalidated the tariffs imposed in April 2025 under President Donald Trump’s “Liberation Day” policy and set in motion the repayment of roughly US$166 billion in tariff collections. More than US$85 billion has already been returned to businesses, including a six‑figure, interest‑bearing refund to Australian clothing company Nashie.

The refund programme adds about US$120 billion to the federal deficit in June 2026, contrasting with a US$27 billion surplus a year earlier. While the court halted the broad tariff authority, the administration has shifted to other measures: a temporary 10 % global tariff that expires on 24 July 2026, and a forthcoming 12.5 % tariff on forced‑labour goods from 54 countries, including Australia, China, New Zealand and the United Kingdom.