On February 20, 2026, the U.S. Supreme Court issued a landmark 6-3 ruling striking down President Donald Trump’s “reciprocal” global tariffs. The Court ruled that the administration exceeded its authority by using the International Emergency Economic Powers Act (IEEPA) to bypass Congress’s constitutional power over taxes and trade.
In response, Treasury Secretary Scott Bessent appeared on Fox News to outline the administration’s strategy moving forward:
1. The “Draconian Alternative”
Bessent argued that while the Court restricted specific tariffs under IEEPA, it reaffirmed the President’s right to a complete embargo.
- The Leverage: Bessent noted, “The Court has made the President’s leverage more draconian… he does have the right to a full embargo. He can just cut countries off or cut whole product lines off.”
2. Seamless Transition: “The Toolbox is Full”
The administration plans to maintain tariff levels using alternative legal authorities:
- Section 122 (Trade Act of 1974): Used immediately to sign an executive order for a 10% global tariff (valid for 150 days).
- Sections 232 & 301: These security-focused authorities remain intact to ensure trade goals are met without interruption.
3. Economic Stability & Growth
Despite the ruling, Bessent projected confidence, stating that 2026 revenue estimates remain “virtually unchanged.” The administration continues to target 3.5% growth through its “parallel prosperity” agenda, linking trade, tax, and energy policy.
4. The Refund Contention
With $133B–$175B in collected tariffs now potentially illegal, a “convoluted” battle for refunds looms. Bessent signaled that the refund process could take years, urging partners to honor existing trade agreements rather than seeking immediate repayments.
