Consider This from NPR - What the Supreme Court’s tariff decision means for small businesses

Episode Date: February 20, 2026

Nearly a year ago, Trump announced his “Liberation Day” tariffs, slapping high import taxes on goods from countries around the world. The sweeping tariffs hurt the New York-based wine importer VOS Selections, one of several plaintiffs that challenged the Trump administration in court, arguing the president lacked the ability to impose the tariffs under the International Emergency Economic Powers Act.Today, the Supreme Court agreed, ruling that many of President Trump’s tariffs are unconstitutional. NPR’s Scott Detrow talks with NPR Chief Economics Correspondent Scott Horsley and NPR Legal Affairs Correspondent Nina Totenberg about the court’s decision and what it means for businesses and consumers.For sponsor-free episodes of Consider This, sign up for Consider This+ via Apple Podcasts or at plus.npr.org.  Email us at [e-mail] episode was produced by Tyler Bartlam, with audio engineering from Ted Mebane. It was edited by Christopher Intagliata, Courtney Dorning, Scott Horsley and Krishnadev Calamur. Our executive producer is Sami Yenigun.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

The Supreme Court's ruling on tariffs is deeply disappointing, and I'm ashamed of certain members of the court. That was President Trump reacting to the Supreme Court's decision ruling that many of his tariffs are unconstitutional. It was nearly a year ago when Trump announced sweeping tariffs on goods from countries all over the world, a day he called Liberation Day. The day American industry was reborn. America's destiny was reclaimed, and the day that we began to make America wealthy again. Trump argued the tariffs would strengthen the international economic position of the U.S. But American businesses that import goods and had to pay the new taxes had a different reaction. The tariffs changed so many times.

We had to deal with so many different shipping issues. We had to go through and change our entire price book, many hundreds of items, four times. Victor Schwartz is the founder of the New York-based wine importer VOS selections. He said in addition to confusion for his customers, the tariffs pummeled his company. Finding the money to pay the tariffs, it put a big hole in our cash flow. When you have to come up with that kind of money, you know, for us, it's like in the six-figure range. Where's that money going to come from? According to the J.P. Morgan Chase Institute, mid-sized U.S. businesses paid three times as much

in tariffs last year as they did before Trump returned to the White House, costing those. businesses and consumers tens of billions of dollars. Now, about half of Trump's tariffs are out, but Trump has vowed to forge ahead with tariffs. But other alternatives will now be used to replace the ones that the court incorrectly rejected. Consider this. The Supreme Court has shot down one of President Trump's signature economic policies. So what comes next? From NPR, I'm Scott Detrow. It's Consider This from NPR. Nearly a year ago, President Trump followed through on one of his campaign promises, imposing sweeping tariffs on goods from dozens of U.S. trading partners. Using the International Emergency Economic Powers Act, known as AEPA, Trump argued he had the

constitutional power to impose tariffs in order to address trade imbalances and to stop the flood of fentanyl coming into the U.S., both of which, he said, were national emergencies and threats to national security. But the Supreme Court disagreed, ruling his use of AEPA unconstitutional and wiping out a big chunk of the tariffs Trump said in place. To break down this landmark decision and what comes next, we have NPR Chief Economics Correspondent Scott Horsley and NPR Legal Affairs correspondent, Nina Totenberg. Hello. You're with you.

Nina, I'm going to start with you. What are the courts said? Writing for a hefty six to three majority, Chief Justice John Roberts said that the nation's founders deliberately and explicitly placed the power to impose taxes, including tariffs, with Congress, not with the president. As the Chief Justice put it in his announcement from the bench this morning, having just fought a revolution motivated in large part by taxes imposed on them by the King of England without their consent, the framers wrote a constitution that gives Congress the taxing power

because the members of the legislature would be more accountable to the people. President Trump reacted to the decision today with fury. They're just being fools and lapdogs for the rhinos, and the radical left Democrats. And I will just note that's an insult in Republican world, Republican and name only that Trump was citing. Trump says he can just use other statutes to do what he wants to do anyway. Is that true, Nina? Yes and no.

There are several statutes that allow him to impose some tariffs on his own, but they're limited. For example, one of the key statutes he cited allows him to impose certain tariffs on his own, but only for six months. And after that, he has to get approval from Congress. And don't forget that all the money raised by the tariffs was supposed to offset the tax cuts, the Trump tax cuts, but now the money isn't going to be there. Scott, how much money is at stake here? There's a lot of money at stake. The federal government's been collecting about $30 billion a month in tariffs, and this ruling strikes down about half those import taxes. So it's a big deal, especially for the U.S. businesses that have been paying the lion's share of these tariffs.

But as big as this ruling is, tariffs are still just a fairly small slice of overall government revenues, about 5%. So if half that tariff money goes away, it will mean a larger federal deficit, but it's not a crippling blow for the U.S. Treasury. These tariffs in the erratic way that they were introduced at so many points really, really jolted the economy around the world so many times. How did the market react to the news from the court? Stocks rose, but not very much. It was actually a pretty muted reaction compared to the the big sell-off last year when the worldwide tariffs were announced. Maybe that's because investors believe the White House is going to replace a lot of these outlawed tariffs with other taxes using statutes where the president's authority is more clear. But as Nina points out, those other

statutes do come with more strings attached. They don't give the president the power he claimed to have under IEPA to impose unlimited tariffs on goods from any country for any reason. And another thing that happened today is that we got some new numbers on economic growth. What did they tell us about the effective tariffs on the economy? The economy weathered Trump's tariff campaign in relatively good shape last year. We learned today the GDP grew 2.2% in 2025. That's a little bit slower than the year before, but perfectly respectable. Even with all the taxes Trump piled on, though, imports did not go down last year. They actually went up a little bit. In some cases, importers are buying from different countries, as they try to sidestep the highest tariff rates,

but overall trade has been pretty resilient. Are the companies that paid these tariffs going to be lining up for refunds now? Oh, yeah, given the money at stake, I think you can bet on it. Chief Justice Roberts did not spell out today how refunds might work, so a lower court's going to have to work that out. Justice Kavanaugh, in his dissent, warned it could be a mess, echoing comments that came up during oral arguments. But I spoke today with veteran trade lawyer at Robert Leo.

He says refunding all those tens of billions of dollars will take some work, but he says it's very doable. It won't be a mess. Customs has all this information electronically, and I've talked to a number of our clients, and they know how much they paid. You know, for most folks, filling out your taxes is no fun, but if you know you're going to get a refund, you will certainly make the effort. The National Retail Federation put out a statement today, urging the lower court to ensure what it called a seamless process to refund the money that was wrongly collected from those importers. Nina, this court has been so deferential to executive power, especially in recent years. What does this opinion tell you about the court? That it's particularly vigilant about what it views as the government picking people's pockets.

In other words, it's a money case. And the majority opinion is what I would call a John Roberts special. He wrote a concise decision, accommodated the justices the majority as much as necessary, and got the job done in Supreme Court terms quite quickly. The decision clearly tells the president to stay in his constitutional lane, but at the same time, Robert's opinion only decides what has to be decided. decided and gives the lower court's clear guidance on how to limit any Trumpian efforts to circumvent the opinion. It was a six-three split. How did that split break down?

Roberts' opinion was joined by two of the court's other conservatives, Trump appointees Gorsuch and Barrett and the three liberal justices, Sotomayor, Kagan, and Jackson. At the same time, what you see is a court that's deeply fractured, not so much about who wins and loses, but how they win or lose. So today, for instance, Roberts wrote a 21-page opinion but there were four concurring opinions, one by Justice Gorsuch, totaling 46 pages. And the dissent that Justice Kavanaugh wrote a 63-pager. And all of these, of all of the justices, only two of them, Sotomayor and Kagan, did not write an opinion. Everybody had something to say.

Exactly. That is NPR Legal Affairs correspondent Nina Totenberg, as well as Scott Horsley, our chief economics correspondent. Thanks to both of you. Thank you. You're welcome. This episode was produced by Tyler Bartlam with audio engineering from Ted Mebain. It was edited by Christopher and Taliata, Courtney Dorning, Scott Horsley, and Christianev Kalamor. Our executive producer, Sammy Yannigan.

It's Consider This from NPR. I'm Scott Detra. Want to hear this podcast without sponsor breaks? Amazon Prime members can listen to consider this sponsor-free through Amazon music. Or you can also support NPR's vital journalism and get Consider This Plus at plus.npr.org. That's plus.npr.org.