6 min readFeb 26, 2026 08:16 AM IST
First published on: Feb 26, 2026 at 08:16 AM IST
Learning Resources Inc. is a small business in Illinois that imported educational toys from China. It filed a suit in the US District Court for the District of Columbia challenging the imposition of tariffs. Another small business joined this litigation. Meanwhile, five other small businesses and 12 states filed suits before the United States Court of International Trade (CIT) challenging the tariffs. These cases eventually led to the landmark 170-page ruling in Learning Resources Inc. v. Donald J. Trump on February 20, 2026. By a majority of 6:3, the tariffs imposed by President Donald Trump were held unconstitutional.
The International Emergency Economic Powers Act (IEEPA) was enacted in 1997 and sections 1701 and 1702 give the President wide powers to, among other things, investigate, regulate, nullify, prevent or prohibit any acquisition or transportation or importation or exportation of any property in which any foreign country or a national thereof have an interest. But this power can be exercised only when there is a declaration of a national emergency under the National Emergency Act.
Soon after assuming office, Trump declared a national emergency to address two foreign threats. The first was the influx of illegal drugs from Canada, Mexico and China and the second was the “large and persistent trade deficits” that had led to the hollowing out of the American manufacturing base and the undermining of critical supply chains.
To address the second threat, Trump first imposed a duty of 10 per cent on all imports from all trading partners. Several nations suffered higher tariffs, which were frequently increased, reduced or modified. On Chinese goods, for example, the tariffs were increased to 20 per cent and then to 34, 84 and finally to 125 per cent. Similarly, multiple tariff rates were repeatedly imposed on various countries, including India.
The single question in this historic case was whether the power to “regulate” the importation of goods included a power to impose tariffs. Chief Justice John Roberts and five other judges ruled that sections 1701 and 1702 did not confer power on the President to impose tariffs or duties. It referred to Article I, section 8 of the US constitution, which provides: “The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.”
The constitution did not grant any taxing power to the executive branch, that is, the President; this power vested solely with Congress. The majority opinions contain a detailed discussion on the powers of the President even during a national emergency. They hold that the word “regulate” will not include the power to impose tariffs and the IEEPA had never been used to impose them since its inception.
The government pleaded serious economic and political consequences if the tariffs were held unconstitutional. The tariffs were expected to reduce the national deficit by $4 trillion and the amount involved in various international agreements could extend to $15 trillion. The question of whether the US would be a rich or poor nation was hanging in the balance and these staggering amounts dwarfed all earlier precedents. The majority was unmoved by these arguments of fear and held that, in the absence of clear authorisation by Congress, the President could not use his emergency powers to impose tariffs. Indeed, Chief Justice Roberts applied the “major questions doctrine” that requires the executive to have clear authorisation by Congress when dealing with issues that have far-reaching economic and political consequences.
The three dissenting judges held that the power to “regulate” importation of goods would include the power to impose tariffs, particularly during a declared national emergency. The power of regulation must be broadly construed and will include the imposition of quotas, embargoes and tariffs. It referred to earlier tariffs imposed by presidents Richard Nixon and Gerald Ford. The leading minority judgment of Justice Brett Kavanaugh forms 63 pages of the 170-page verdict and has referred to past tariffs imposed by presidents from Abraham Lincoln onwards. The majority, however, pointed out that those were different statutes that enabled the President to act during wartime. On the other hand, the tariffs by Trump were levied at a time of peace. The majority remarked that the US was not at war with every nation in the world.
Justice Kavanaugh notes that this historic ruling may not constrain Trump’s power to impose tariffs in the coming months. He has referred to at least three federal statutes that enable such imposition: Section 232 of the Trade Expansion Act of 1962, sections 122, 201 and 301 of the Trade Act of 1974, and section 338 of the Tariff Act of 1930. The minority judgment has pointed out that holding the tariffs unconstitutional would result in substantial refunds and lead to a “mess”.
It remains to be seen which power is invoked by Trump, what the procedural safeguards are, and whether they require the approval of Congress under Article 1, section 8 of the constitution. Will the US government refund the duties collected? Thus, India and other nations will continue to sail in a sea of uncertainty. However, what is now certain is that tariffs are taxes and can be imposed only with the express statutory authority given by Congress.
The great significance of this judgment is in upholding the rule of law and making it clear that, in a republican democracy, no transgression of a constitutional limitation is permissible. Under the doctrine of separation of powers, it is the judiciary that can alone decide when that limit is crossed.
The writer is a senior advocate
