Supreme Court Invalidates Trump Tariffs, Exposing US to $175bn Refund Bill

The U.S. Supreme Court ruled on February 20, 2026, that President Donald Trump exceeded his authority by imposing tariffs under the International Emergency Economic Powers Act. The decision invalidates more than 60% of tariffs imposed since 2025, potentially exposing the federal government to $175 billion in refund claims from businesses including Costco and Revlon. Fitch Ratings estimates the ruling will reduce the effective tariff rate from 13% to 6%, eliminating over $200 billion in expected annual revenue. The Treasury faces a projected $1 trillion revenue loss over the next decade. While the administration seeks alternative legal avenues under the Trade Act of 1974, the ruling creates immediate fiscal uncertainty and disrupts existing trade agreements ahead of the November midterm elections.