On February 20, 2026, the U.S. Supreme Court delivered one of the most significant trade rulings in a generation. In a 6-3 decision, the Court held that the International Emergency Economic Powers Act — IEEPA — does not give the President authority to impose tariffs.

The ruling strikes down the legal foundation for the Trump administration's "Liberation Day" and "fentanyl tariffs," two of the most disruptive trade measures of the past year.

Lead plaintiff's counsel Neal Katyal put it plainly outside the Court: “Tariffs are taxes. And only Congress can impose taxes on the American people.”

It's a landmark moment. But Canadian shippers should read past the headlines before celebrating.

What the Court Actually Decided

Chief Justice John Roberts wrote the majority opinion, joined by five colleagues across the ideological spectrum. The core finding: IEEPA authorizes the President to “regulate...importation” in response to a declared national emergency — but “regulate” does not, in law or plain language, include the power to tax.

As Roberts wrote, when Congress addresses both the power to regulate and the power to tax, it does so separately and expressly. Imposing tariffs of this magnitude under an emergency powers statute had no historical precedent in IEEPA's 50-year existence — and that absence mattered to the Court.

Three justices — Gorsuch, Barrett, and Roberts — also applied the “major questions doctrine,” which requires Congress to speak clearly when delegating authority over matters of vast economic and political consequence. The three liberal justices reached the same result through standard statutory interpretation. The vote was 6-3. Justices Thomas, Alito, and Kavanaugh dissented.

What This Means for Canada — Specifically

Here's where the picture gets more nuanced for Canadian shippers.

Canada was among the first countries hit with IEEPA tariffs — a 25% levy on most Canadian goods, later raised to 35%, framed around fentanyl trafficking and border security concerns. But two days after those tariffs were announced, the administration granted a broad exemption for Canadian goods that comply with the Canada-United States-Mexico Agreement (USMCA). That carve-out allowed more than 90% of Canadian exports to continue crossing the border duty-free, which is why U.S. Customs and Border Protection collected approximately US$2.4 billion in IEEPA tariff revenue on Canadian imports — less than 2% of the US$130 billion collected globally through mid-December.

More importantly for Canada: the tariffs doing the most damage — on steel, aluminum, automobiles, and lumber — are imposed under entirely separate legal authorities. Today's ruling doesn't touch them.

CIBC chief economist Avery Shenfeld was direct in a client briefing: this ruling “doesn't eliminate the most significant tariffs currently in place” for Canada, including those on autos, steel, aluminum, lumber, and some copper products. What it does remove is the threat of that 35% tariff being used as a negotiating weapon against Ottawa, which meaningfully improves Canada's position heading into USMCA renewal talks.

The Tariff Wall Isn't Coming Down

Trade experts are nearly unanimous: the Trump administration will move quickly to reconstruct its tariff regime under other statutes. The administration has already signaled this intent, launching Section 232 investigations into aircraft, critical minerals, and pharmaceuticals. Three additional tools remain available — Section 301 of the Trade Act of 1974, Section 122 (which allows tariffs of up to 15% for 150 days), and Section 338 of the Tariff Act of 1930 (which authorizes duties up to 50% in specified circumstances).

The Court's ruling amounts to telling the administration it checked the wrong statutory box. The tariff agenda continues — it just needs a different legal vehicle.

The Refund Question

For U.S. importers who paid IEEPA tariffs, a refund pathway exists — but it requires action. A protest must be filed with U.S. Customs and Border Protection within 180 days of the liquidation of each entry. The Court of International Trade has exclusive jurisdiction over these claims. Hundreds of companies reportedly filed protective protests ahead of today's ruling specifically to preserve their place in line.

If you haven't filed yet, the clock is running. This is a conversation to have with U.S. trade counsel today, not next week.

For Canadian exporters whose U.S. customers absorbed IEEPA duties, it's worth raising with your buyers. If they have recoverable claims, it affects landed cost history, pricing expectations, and the commercial relationship going forward.

What StraitLink Global Is Doing

We're reviewing cross-border entry records for clients who moved goods into the U.S. during the IEEPA tariff period, identifying entries that may give rise to refund opportunities or reclassification considerations, and monitoring CBP for guidance on how protests will be administered in the wake of today's ruling.

The situation is still moving. The most important thing Canadian importers and exporters can do right now is to get clarity on their exposure before the next round of tariff measures is shaped under a different legal authority.

That's exactly what we're here for.

Contact StraitLink Global to review your cross-border duty exposure and talk through what this ruling means for your shipments.