# DECODING: IEEPA struck down by the Supreme Court — Trump bypasses, innovates, threatens still

> On February 20, 2026, the United States Supreme Court issued a ruling that shook American trade policy to its foundations. By a vote of 6 to 3, the nine justices ruled that the International Emergency Economic Powers Act (IEEPA) did not authorize the president to impose tariffs. This emergency law, used by Trump to impose sweeping tariffs — including a 10% baseline rate on all

- Author: Maxime Marquette
- Publisher: MadMax (https://mad-max.co)
- Section: Analysis
- Published: 2026-06-27
- Canonical URL: https://mad-max.co/en/article/decryptage-l-ieepa-annule-par-la-cour-supreme-trump-contourne-innove-menace-enco

## Introduction: The Supreme Court as the last commercial safeguard

### February 20, 2026: a historic 6-3 ruling

On **February 20, 2026**, the **United States Supreme Court** issued a ruling that shook American trade policy to its foundations. By a vote of **6 to 3**, the nine justices ruled that the **International Emergency Economic Powers Act** (**IEEPA**) did not authorize the president to impose tariffs. This emergency law, used by **Trump** to impose sweeping tariffs — including a **10%** baseline rate on all foreign imports and additional duties on the three largest US trading partners — was found to exceed constitutional presidential authority.

Chief Justice **Roberts**, writing the majority opinion, noted that the "extended list of powers" under **IEEPA** could not be read as authorizing the president to impose tariffs "unlimited in their scope, amount, and duration." The **Federal Circuit Court of Appeals** had already affirmed this point on appeal. The **Supreme Court** confirmed it. In theory, this is a resounding victory for the rule of law and the separation of powers. In practice, **Trump** had already found other avenues before the ink on the decision was dry.

### Trump versus the Constitution: an immediate bypass reflex

**Donald Trump** has never accepted an institutional constraint without immediately seeking to circumvent it. Following the **Supreme Court**'s ruling on **IEEPA**, his administration rapidly mobilized other legal instruments. **Section 122 of the Trade Act of 1974** authorizes the president to impose a blanket **15%** tariff on all imports to remedy a "severe balance-of-payments deficit." **Trump** used this provision to maintain a **10%** floor tariff on global imports — but with a constraint: these tariffs expire after **150 days** unless **Congress** extends them.

In parallel, the administration launched investigations into the "unfair trade practices" of several countries under other legal statutes, opening the door to sectoral tariffs that could circumvent **IEEPA**'s limitations. And on **June 26, 2026**, **Trump** threatened to impose a **100%** tariff on any European country that imposed a digital services tax on American technology companies such as **Meta**, **Alphabet**, or **Amazon** — without specifying the legal basis for such a tariff following the **IEEPA** ruling.

*The Supreme Court's ruling on IEEPA is a perfect example of what I call "constitutional whack-a-mole." Close one door, and Trump opens three others. This doesn't mean the ruling is without value — it has real value. But the legal creativity of his administration in bypassing constitutional limits is remarkable, and troubling.*

## IEEPA: anatomy of a hijacked law

### An emergency law designed for geopolitical crises, not tariffs

The **International Emergency Economic Powers Act** was adopted in **1977** to allow the American president to block economic transactions with foreign countries in situations of national emergency — originally conceived for geopolitical crises such as embargoes, freezing the assets of hostile governments, or responding to acts of economic warfare. It was used to freeze Iranian assets after the **1979** hostage crisis, to sanction **Iraq** after its invasion of **Kuwait** in **1990**, and to block transactions with regimes such as **North Korea** or **Russia**.

**Trump**, during his first term and especially his second, interpreted **IEEPA** expansively to include the power to impose general trade tariffs on grounds such as the trade deficit or fentanyl. Lower courts had begun invalidating these tariffs before the **Supreme Court** rendered its definitive ruling in February **2026**. The court concluded that the list of **IEEPA** powers — "to investigate, regulate, or prohibit transactions" — did not include the power to impose tariffs, which is traditionally a prerogative of **Congress** under the US Constitution.

### What the ruling means for trade policy

The **Supreme Court**'s ruling on **IEEPA** has implications that go beyond **Trump**'s tariffs. It reaffirms the constitutional principle that commercial powers belong to **Congress**, which can delegate them to the president — but only within precise limits. It restricts any future president's ability to use emergency laws to bypass the normal legislative process on trade matters. And it signals to the international business community that American tariffs imposed by presidential decree are susceptible to legal challenge, reducing their predictability and therefore their effectiveness as negotiating instruments.

For **America**'s trading partners — the **European Union**, **Canada**, **Mexico**, **Japan**, **South Korea** — this ruling cuts both ways. It reduces immediate exposure to unpredictable presidential tariffs. But it does not change the fundamental trade policy of the **Trump** administration, which is actively seeking other legal bases to maintain tariff pressure. The trade war is still on. It has simply changed its ammunition.

*The Supreme Court's ruling does not change Trump's political psychology toward trade. He fundamentally believes tariffs are the ultimate negotiating instrument, that trade deficits are an injustice, and that America is "losing" in global trade. These convictions survive every court ruling.*

## The 100% threat against European digital taxes

### A June 26, 2026 threat with no clear legal basis

On **June 26, 2026**, **Trump** posted an explicit threat on social media: any European country imposing a digital services tax on American technology companies would face a **100%** tariff on its exports to the **United States**. **"This tariff will supersede any past trade agreements with the country, whether implemented, signed or unsigned,"** he wrote.

The immediate problem is that the **Supreme Court** just invalidated **IEEPA** as a basis for this type of tariff. The **Washington Times** notes explicitly that "the legal basis on which the president would use this threat if European countries impose the tax is uncertain." **Trump** can lean on **Section 122 of the Trade Act of 1974** for general tariffs, or launch unfair practice investigations under other statutes. But a **100%** tariff targeted at a specific country in response to a national fiscal measure would likely be challenged in court — and in the post-**IEEPA** context, these challenges now have a stronger chance of success.

### The digital tax: the dispute that never ends

The digital services tax — which hits the gross revenues of American technology companies operating in a given country — has been a longstanding dispute between the **United States** and its allies. **France** had proposed such a tax in **2019**. It suspended implementation under American pressure in **2021**, pending an international agreement through the **OECD** on a global minimum tax. This **OECD** agreement was adopted in principle but its implementation is fragmented — some countries have enacted it, others are waiting.

**Trump** had convinced **Canada** to drop its digital tax during trade negotiations the previous year. Several European countries face similar pressure. The **100%** threat aims to deter European governments from moving forward with national taxes while awaiting an international agreement that is not materializing. It is a classic economic coercion strategy — but its legal effectiveness in the post-**IEEPA** context is now more uncertain than before.

*Trump's tactic on digital taxes reveals a coherent worldview: he considers large American technology companies to be economic ambassadors to be protected, and any European tax on them to be an act of aggression. It is a vision of American capitalism as an instrument of national power. Cynical, but logical on its own terms.*

## The constitutional arm-wrestling around commerce

### Congress: legitimate but absent

The **Supreme Court**'s ruling on **IEEPA** reaffirms that tariffs are constitutionally a prerogative of **Congress**. But **Congress** is not eager to reclaim this prerogative. For decades, both parties have accepted a growing delegation of trade authority to the executive branch, because trade negotiations are technically complex and representatives and senators prefer to avoid difficult votes on tariffs that create winners and losers in their districts.

Following the February **2026** ruling, several members of **Congress** discussed legislating to explicitly grant the president broader tariff authority — a law that would circumvent the constitutional limitations the **Supreme Court** just identified. This is a legally available option: if **Congress** explicitly delegates tariff power to the president with defined limits, the **Supreme Court** would be obliged to respect that delegation. But politically, legislating to give **Trump** the tariff powers the **Court just stripped from him** is a difficult position to assume publicly. This option is therefore discussed but not actively advanced.

### Section 232 and Section 301 tariffs: the instruments that survive

The invalidation of **IEEPA** for tariffs does not leave **Trump** without tools. **Section 232 of the Trade Expansion Act of 1962** allows tariffs on imports that threaten national security — the basis on which **Trump** imposed tariffs on steel and aluminum during his first term. **Section 301 of the Trade Act of 1974** allows tariffs in response to "unfair" trade practices by a foreign country — the basis on which tariffs on Chinese imports were imposed. These instruments are slower and more limited than **IEEPA**, but they are constitutionally solid. **Trump** will use them actively in the months ahead.

The great question is **Section 122** — the **10%** balance-of-payments tariffs that expire in **150 days**. If **Congress** does not extend them, they disappear automatically. If **Trump** wants to maintain them, he will have to either convince **Congress** to legislate or find a new emergency basis — which would recreate exactly the scenario the **Supreme Court** just invalidated. This cycle is at the heart of the American constitutional arm-wrestling around trade.

*Section 122, Section 232, Section 301: the alphabet of American tariff instruments is richer than most commentators acknowledge. The invalidation of IEEPA is not the end of the trade war — it is simply a change of terrain. America's trading partners must adapt to this new legal reality.*

## Implications for America's trading partners

### The European Union: a window of respite, not a victory

For the **European Union**, the **IEEPA** ruling offers a partial window of respite. The tariffs **Trump** had imposed via **IEEPA** were invalidated, creating a period of legal uncertainty regarding potential refunds for importers. But the **EU** must not interpret this ruling as a lasting victory in the trade war with **Washington**. **Trump** immediately signaled his willingness to find other avenues — **Section 122**, unfair practice investigations, and now the direct threat against digital taxes.

The optimal European strategy in this context is threefold: first, keep its own retaliatory measures ready to deploy; second, work with American allies in **Congress** who oppose **Trump**'s trade policy to strengthen legislative constraints on presidential tariff powers; third, accelerate the conclusion of alternative trade agreements with non-American partners to reduce dependence on the American market in the most vulnerable sectors. This is a multi-front strategy that demands European coordination — something Brussels sometimes struggles to organize.

### The certainty of the American trade war

The **IEEPA** ruling must not create the illusion that a normalization of American–European trade relations is imminent. **Trump** deeply believes trade deficits are a form of loss, that allies are freeloading off **America**, and that tariff pressure is the best way to renegotiate relationships he considers unbalanced. These convictions are not alterable by a court ruling. As long as **Trump** remains in power, the trade war with **Europe** will continue — the instrument will change, not the intent.

The real change the **IEEPA** ruling produces is structural: it forces the administration to go through slower and more visible processes to impose tariffs, giving businesses and trading partners more time to adapt and challenge them. This is a slowdown in the rhythm of tariff shocks, not their elimination. For companies planning investments and supply chains, this increased predictability — even partial — has real economic value.

*The real lesson of IEEPA for America's partners: American institutions can constrain even a president as determined as Trump in certain domains. But this constraint is slow, partial, and does not change political intent. We must adapt to this reality rather than wait for a return to normalcy.*

## IEEPA and the US Constitution: legal analysis of a contested power

### The legal foundation of IEEPA: scope and limits

The **International Emergency Economic Powers Act** (IEEPA), enacted in **1977**, grants the American president extraordinary economic powers during "an unusual and extraordinary national emergency." It has been used by virtually every president since **Carter** to impose economic sanctions, block transactions, and control foreign assets. **Trump**'s use of it to impose general trade tariffs represents, however, an unprecedented extension of the law's scope.

The courts had to determine whether IEEPA authorized trade tariffs or whether this use exceeded the presidential powers **Congress** had intended to confer. The **Federal Circuit Court of Appeals** had initially validated the use of IEEPA for tariffs, before the **9th Circuit Court of Appeals** challenged this interpretation. The **Supreme Court** ultimately had to resolve this circuit conflict — a classic situation justifying the intervention of the highest American jurisdiction.

### The Youngstown precedent: when the Court limits presidential powers

The constitutional analysis of presidential economic powers inevitably returns to **Youngstown Sheet and Tube Co. v. Sawyer** (1952), in which the **Supreme Court** invalidated President **Truman**'s seizure of American steel mills during the **Korean War**. Justice **Jackson**, in his concurring opinion that has become doctrinal reference, established a tripartite framework for evaluating presidential powers: they are at their maximum when **Congress** explicitly authorizes them, in a "twilight zone" when **Congress** is silent, and at their minimum when **Congress** opposes them.

In the case of **IEEPA** applied to tariffs, the question is precisely which category applies. Supporters of the **Trump** administration argued that **IEEPA** constitutes explicit legislative authorization — first category, presidential powers at their maximum. Opponents argued that **Congress**, in adopting **IEEPA**, did not intend to give the president the power to set general trade tariffs — that this would be a usurpation of legislative power over commerce that the **Constitution** explicitly assigns to **Congress**.

*This legal debate about **IEEPA** is not purely academic — it touches on the fundamental question of separation of powers in American democracy. Who decides trade policy: a president elected by 51% of voters who can act by decree, or a **Congress** representative of the country's diversity that must forge compromise? The **Constitution**'s answer is clear — **Congress**. What the **Supreme Court**'s recent ruling clarifies is how far a president can use declared emergencies to circumvent that constitutional assignment.*

## Trump's trade tariffs: economics, politics, and consequences

### The economics of tariffs: who really pays?

A persistent misconception in the public debate about **Trump**'s tariffs deserves correction: it is not the foreign countries that pay the tariffs — it is American importers, and ultimately American consumers. A **25%** tariff on Mexican products does not mean **Mexico** pays **25%** of the value of goods to the American Treasury — it means the American importer pays **25%** more, a cost that is then partially passed on to consumer prices.

Economic studies on the impact of **Trump**'s **2018–2019** tariffs are consistent on this point: the final incidence of tariffs falls primarily on American consumers in the form of higher prices, on American businesses using taxed imported inputs, and secondarily on foreign exporters through margin compression. The benefit for protected sectors exists but is generally concentrated and significantly outweighed by the diffuse costs borne by the economy as a whole.

### The politics of tariffs: signals, negotiations, and leverage

If the economics of tariffs are largely unfavorable to those imposing them, why does **Trump** keep using them? The answer is political rather than economic. Tariffs serve primarily as a signal of strength — "we can hurt you" — and as a negotiating lever. They also allow for targeting visible and concentrated benefits toward politically key sectors — **Pennsylvania** steel, **Midwest** aluminum — even if the dispersed costs across all consumers are greater in aggregate terms.

This political logic is consistent with **Trump**'s negotiating style, as described in his book **The Art of the Deal**: create an intolerable situation for the adversary in order to bring them to the table on your terms. The **100%** threat on European digital taxes fits this pattern. The problem with this approach in the current context is that **Europe** — unlike the less well-equipped trading partners **Trump** faced in his early years — has substantial retaliatory tools and a growing political will to use them.

*The use of tariffs as a foreign policy instrument fascinates me for its economically inefficient but short-term politically effective brutality. It is the definition of populist politics: visible, symbolic gestures that cost more than they yield in terms of overall well-being, but produce immediate political gains for those who deploy them. **Trump** masters this art better than any other contemporary politician. Which does not make it any less harmful to the economies involved.*

## International trade law versus American protectionism

### The WTO: a reference institution under pressure

The **World Trade Organization** (WTO) is the central institution of the multilateral trading system that the **United States** itself helped build after **1945**. Its dispute settlement mechanism — through which member countries can challenge trade practices deemed illegal before an arbitration panel — is the keystone of the system. **Trump**'s tariffs, insofar as they violate **WTO** most-favored-nation rules and negotiated tariff concessions, have been challenged by many members.

But the **WTO** has suffered for years from a blockage of its appellate body — the mechanism that allows appeals of first-instance rulings. The **United States** has blocked appointments of new appellate body members since the **Obama** administration, a blockage intensified under **Trump**. The result is a non-functional appellate body that strips the dispute settlement system of its final avenue of appeal. This is an institutional paralysis that weakens international trade law precisely when it is most needed.

### Bilateral and regional alternatives to multilateralism

Faced with the **WTO**'s paralysis and American unilateral behavior, trading partners have developed alternative strategies. The **European Union** has accelerated negotiation of bilateral trade agreements — with **Mercosur**, with **Japan**, with **New Zealand**, with **India**. These agreements do not replace the multilateral system, but they create networks of preferential trade that reduce dependence on the American market.

The **Trans-Pacific Partnership** — renamed **CPTPP** after the American withdrawal in **2017** — represents the most significant example of this strategy. By pursuing and enlarging this agreement without the **United States**, the eleven founding members created a high-quality trade framework covering economies collectively representing **13%** of global **GDP**. The **United Kingdom**'s application for membership and discussions around Chinese accession illustrate the growing attractiveness of this model in the face of American protectionism.

*International trade law is fracturing into blocs and networks with diverging rules. This is not inevitable — it is the result of political choices. A different American administration could relaunch commercial multilateralism, reactivate the **WTO**, and rebuild partners' trust. In the meantime, **Europe** is right to diversify its trade partnerships and build resilience against the unpredictability of **Washington**. Strategic dependence on a single dominant trading partner is a vulnerability — as **Europe** learned the hard way with Russian gas.*

*The American trade war under **Trump** reminds me of a fundamental principle: multilateral institutions do not defend themselves — they need champions. For decades, the **United States** was that champion for the international trading system. When this champion turns against the rules it helped establish, it falls to **Europe** to take up the torch. This is not a choice — it is a necessity.*

## Conclusion: The Constitution holds, but with cracks

### What the IEEPA ruling says about the state of American democracy

The **Supreme Court**'s ruling on **IEEPA** is a reaffirmation of the principle of separation of powers in American trade policy. It proves that American institutions can resist the temptations of excessive executive power concentration — even when that power is exercised by a president who does not readily acknowledge his constitutional limits. For those concerned about the state of American democracy in **2026**, it is an encouraging signal.

But the ruling also reveals the cracks: the fact that **Trump** was able to use **IEEPA** in this manner for several months before being corrected by the courts shows that there is a transition period during which constitutionally dubious measures can have real and lasting economic effects. And the fact that the administration immediately sought other bypass instruments shows that the **Court**'s ruling is not a policy correction — it is a procedural correction. The trade war continues under new forms.

### What the West can learn from this arm-wrestling

For **Europe** and other US trading partners, the lesson from the American constitutional arm-wrestling around trade is this: the best protection against unpredictable trade policy shocks is economic diversification and the reduction of asymmetric dependencies. A **Europe** heavily dependent on the American market for its manufactured or technological exports is vulnerable to tariff threats regardless of their legal basis. Reducing these vulnerabilities — by developing alternative markets, building sovereign industries in key sectors, strengthening the European internal market — is the most resilient strategy in the face of an **America** whose trade policy will remain unpredictable for years to come.

**By Maxime Marquette, columnist**

## Columnist's transparency note

### Editorial stance

I am not a journalist but a **columnist and analyst**. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

I do not claim the cold objectivity of traditional journalism, which stops at reporting facts. **I claim analytical clarity**, rigorous interpretation and a deep understanding of the complex issues that concern us all. My role is to give meaning to the facts, to place them in their historical and strategic context, and to offer a critical reading of events.

### Method and sources

This text keeps the basic distinction between **verified facts and interpretive analysis**. The rule never changes: a factual claim is published only when a verifiable source supports it, and the sources this article actually used are listed under **Sources**, never here.

**Primary source families** used by the publication, when the story has them: official statements from governments and international institutions, public statements by political leaders, reports from intergovernmental organisations, dispatches from recognised international news agencies.

**Secondary source families**: specialised publications, internationally recognised news media, analyses from established research institutions, reports from industry organisations.

When an article cites statistical, economic or geopolitical data, it comes from the institutions that produce it (intergovernmental organisations, central banks, national statistics offices), and the exact institution is named under **Sources**.

### Nature of the analysis

The analyses, interpretations and perspectives in the analytical sections of this article are a **critical, contextual synthesis** based on the information available, the trends observed and the expert comments cited in the sources consulted.

My role is to interpret these facts, to set them in the context of today's geopolitical and economic dynamics, and to give them a coherent meaning within the larger story of the changes shaping our time. These analyses reflect expertise built through continuous observation of international affairs and an understanding of the strategic mechanisms that drive global actors.

This article describes a documented state of affairs on its publication date, not a prediction: later developments may shift its outlook. No update is promised in advance; when an article is corrected or completed, the change is dated in the text.

## Sources

### Primary sources

- [Washington Times — Trump threatens 100% tariff on European nations that impose digital service tax — June 26, 2026](https://www.washingtontimes.com/news/2026/jun/26/donald-trump-threatens-100-tariff-european-nations-impose-digital/)

- [United States Supreme Court — Learning Resources, Inc. v. Trump — IEEPA Opinion — February 20, 2026](https://www.supremecourt.gov/opinions/25pdf/24-1287_4gcj.pdf)

- [New York Post — Supreme Court strikes down emergency Trump tariffs — February 20, 2026](https://nypost.com/2026/02/20/us-news/supreme-court-strikes-down-president-trumps-powers-to-impose-sweeping-tariffs/)

### Secondary sources

- [New York Times — Trump news live coverage — June 24, 2026](https://www.nytimes.com/live/2026/06/24/us/trump-news)

- [Hoodline — Trump Cancels Housing Signing — June 24, 2026](https://hoodline.com/2026/06/trump-blows-up-d-c-housing-win-to-force-filibuster-fight/)

- [Fox News — Trump scores major win as Congress passes housing crackdown — June 23, 2026](https://www.foxnews.com/politics/trump-scores-major-win-congress-passes-housing-crackdown-wall-street-investors)

- [ABC News — Johnson says Congress will send housing bill to Trump — June 26, 2026](https://abcnews.com/Politics/johnson-congress-send-housing-bill-trump/story?id=134222903)

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Source: Maxime Marquette, MadMax. When citing, name the author and link https://mad-max.co/en/article/decryptage-l-ieepa-annule-par-la-cour-supreme-trump-contourne-innove-menace-enco