The Supreme Court of the United States held on 20 February 2026 that the International Emergency Economic Powers Act of 1977 or IEEPA does not grant the U.S. president the authority to unilaterally impose tariffs. While the law allows a president to “regulate” importation during a national emergency, the Court ruled that this does not include the power to “tax” or set duties, which remains a core constitutional power of the U.S. Congress.
Learning Resources versus U.S. President Donald Trump
Background
Note that the case was generally named Learning Resources versus Trump. Learning Resources is a family-owned educational toy company based in Vernon Hills, Illinois. Its legal filings provided a stark example of how the tariffs functioned as a massive tax hike.
Specifically, as discussed in its filings, it reported that its import-related costs were projected to skyrocket from USD 2.3 million in 2024 to over USD 100 million in 2025. This marked an increase of more than 44-fold in costs due to tariffs alone.
Rick Woldenberg, the chief executive of Learning Resources, argued that the extreme costs were asphyxiating the business. This provided the court with concrete evidence of how the controversial Trump Tariffs have impacted American businesses and consumers.
Legal Reasoning
Chief Justice John Roberts, writing for the majority, emphasized two main points:
• Textual Limits
He argued that the words “regulate” and “importation” in the IEEPA cannot be stretched to give the president “independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time.”
Roberts further noted that the U.S. Code is full of statutes where Congress explicitly uses the words “tariffs” or “duties” when it intends to delegate that specific power.
• Major Questions Doctrine
A portion of the opinion, joined by Associate Justice Amy Coney Barrett, invoked the “major questions” doctrine.
The particular principle states that if Congress intends to delegate authority over an issue of vast “economic or political significance,” it must do so with clear and explicit language. The high court found that the IEEPA lacked this clarity.
The ruling targeted two types of tariffs. These are traffic tariffs, intended to pressure countries like Canada, Mexico, and China on fentanyl flow, and reciprocal tariffs, which start with a baseline of a 10 percent tariff on almost all imports coming to the U.S.
Judicial Lineup
• Majority
Chief Justice Roberts was joined by the three liberal associate justices, Sonia Sotomayor, Elana Kagan, and Ketanji Brown Jackson, and two conservative associate justices, Neil M. Gorsuch and Amy Coney Barrett.
They all agreed that the IEEPA did not authorize the tariffs, though they differed slightly on whether the major questions doctrine was necessary to reach that conclusion.
• Dissent
Associate Justices Brett M. Kavanaugh, Clarence Thomas, and Samuel A. Alito Jr. dissented.
The dissent from Justice Kavanaugh was the most extensive, arguing that “regulate” historically includes the power to impose tariffs and that the president was acting within the sweeping emergency powers Congress intended to provide in the 1977 law.
Outcome
Interestingly, although Learning Resources won the legal argument, the Supreme Court technically ordered their specific case to be dismissed for lack of jurisdiction. The justices ruled that such challenges should have started in the U.S. Court of International Trade.
Note that the companion case, V.O.S. Selections, was moving through the Court of International Trade. Learning Resources filed a petition for certiorari before judgment to effectively ask the Supreme Court to pluck the case directly from the lower courts.
The high court justices ruled that such challenges should have started in the Court of International Trade rather than a regular district court. However, because the Court ruled on the merits of the issue in the consolidated case, Learning Resources still achieved its goal.
Nevertheless, by ruling that the U.S. president cannot use broad emergency statutes to seize the power of the purse from the U.S. Congress, the Supreme Court ruling demonstrates a significant check on executive power and reaffirms the separation of powers.
FURTHER READING AND REFERENCE
- United States Supreme Court. 20 February 2026. “Learning Resources, Inc. v. Trump, 607 U.S.” Justia. United States Supreme Court. Available online