- The ruling was 6 to 3 against the Trump administration’s tariff policy
- In 2025 alone, over $200 billion (approximately €170 billion) in tariffs were levied
- The lawsuits filed by Kawasaki and hundreds of other companies can now proceed in US trade court
On February 20, 2026, the United States Supreme Court handed down a decision that is making waves far beyond the legal world. By a clear 6-3 majority, the highest court in the US declared the tariffs imposed by President Donald Trump by executive order on the basis of the International Emergency Economic Powers Act (IEEPA) to be unlawful. Chief Justice John Roberts wrote the majority opinion, making it clear that the president did not have the authority to unilaterally impose tariffs under this law. For the motorcycle industry, led by Kawasaki, this decision could have far-reaching consequences.
What the IEEPA tariffs were about
The tariffs at the center of the legal dispute had been imposed in several waves by executive order. One group affected products from China, Canada, and Mexico. The government’s reasoning was that these countries had not done enough to stop the influx of fentanyl into the US. A second group, the so-called reciprocal tariffs, imposed an initial tariff rate of 10 percent on imports from almost all countries, with even higher rates applying to dozens of countries. The legal basis for this was the IEEPA, a law passed in 1977 that grants the president far-reaching powers to regulate trade in times of national emergencies. Large trade deficits were classified as an extraordinary threat to US national security and the US economy.
Numerous companies, including Kawasaki, but also big names such as Costco, YETI Coolers, Goodyear Tires, and GoPro, subsequently filed lawsuits with the US Court of International Trade. However, the trade court put these proceedings on hold and waited for the Supreme Court’s final decision.
How the Supreme Court argued
The central question was: Does the IEEPA give the president the right to impose tariffs unilaterally? The Supreme Court clearly answered no. Roberts wrote in the majority opinion that the president was claiming the independent authority to impose tariffs on imports from any country, on any product, at any rate, and for any period of time, based on just two words in the text of the law, namely “regulate” and “importation.” These two words could not carry such weight. The IEEPA contained no reference to tariffs or duties, and until that point, no president had interpreted the law as conferring such authority.
A key part of the reasoning was the so-called major questions doctrine. This legal principle states that Congress must act clearly and unambiguously if it wishes to delegate authority for decisions of enormous economic or political significance to the executive branch. Roberts referred to a 2023 ruling in which the Supreme Court had overturned the Biden administration’s student loan program using the same doctrine. According to Roberts, when Congress has delegated its tariff powers, it has always done so in explicit terms and under strict restrictions, a standard that the Trump tariffs did not meet.
Roberts also emphasized the significance of the matter with a quote from the Trump administration’s own statement. From the president’s perspective, it would determine whether the US was a rich or poor nation. This dimension clearly exceeded previous cases involving the major questions doctrine.
The different opinions of the judges
Although six of the nine judges agreed on the outcome, they arrived at their verdict through different lines of argument. Justice Neil Gorsuch wrote a 46-page concurring opinion, which was more than twice as long as the majority opinion itself. Gorsuch pointed out that, according to Article I of the Constitution, Congress, not the president, has the power to levy tariffs. He argued that Americans had fought the Revolution in part because they believed that only their elected representatives had the right to tax them, not only with direct taxes such as those in the Stamp Act, but also with import duties such as those in the Sugar Act.
Justice Elena Kagan highlighted another aspect in her opinion. She broke down the structure of the IEEPA text: the law lists nine verbs, including “regulate,” “investigate,” “block,” and “prohibit,” followed by eleven objects describing various transactions involving foreign property. Combining all the verbs with all the objects resulted in 99 possible actions that a president could take to defend against a foreign threat. Not a single one of the remaining 98 combinations involved raising revenue.
Justice Ketanji Brown Jackson added that the limited role of the courts in the democratic system requires them to give effect to the will of the people when Congress clearly states why it included certain wording in a law.
The dissenting opinion and an unusual note
Justice Brett Kavanaugh wrote the 63-page dissenting opinion, which was joined by Justice Clarence Thomas and Justice Samuel Alito. Kavanaugh argued that tariffs are a traditional and common tool for regulating imports and that the IEEPA does grant the president this authority.
One unusual section in Kavanaugh’s dissenting opinion stood out in particular. He wrote that the court’s decision might not significantly limit a president’s ability to impose tariffs in the future, as numerous other federal laws grant the president the authority to impose tariffs and could justify most, if not all, of the tariffs at issue here, albeit possibly with some additional procedural steps. He specifically cited the Trade Expansion Act of 1962, the Trade Act of 1974, and the Tariff Act of 1930. In essence, he said, the court had merely found that the president had used the wrong law as a basis.
Kavanaugh also warned of the practical consequences of the ruling. The state could be obliged to reimburse billions to importers who had paid the IEEPA tariffs, even though some of them had already passed on the costs to consumers. In addition, trade agreements negotiated with countries such as China, the United Kingdom, and Japan on the basis of the IEEPA tariffs could be called into question.
What this means for the motorcycle industry and Kawasaki
The concrete impact of the ruling on the motorcycle and powersports industry is significant. Like many other companies, Kawasaki had filed a lawsuit against the tariffs in the US Court of International Trade. Hundreds of lawsuits had already been filed there, all of which were put on hold until the Supreme Court announced its decision.
Now that the Supreme Court has declared the IEEPA tariffs unlawful, the three-member panel of the Trade Court can resume proceedings. In 2025 alone, more than $200 billion (approximately €170 billion) in tariffs are expected to have been levied. For Kawasaki and the other plaintiffs, the question now is whether and when they will be reimbursed for the tariffs they have already paid.
What happens next?
The ruling first and foremost provides legal certainty on one key issue: the president may not use the IEEPA as a basis for tariffs. However, that does not mean that the issue of tariffs is now settled. As Kavanaugh indicated in his dissenting opinion and as the Trump administration has already announced, other legal bases for imposing tariffs are to be examined.
For motorcyclists and the entire powersports industry, the situation therefore remains unclear for the time being. Although the tariffs based on the IEEPA are now invalid as a result of the ruling, and a refund process could be initiated, the government could attempt to impose similar tariffs under other laws, albeit with additional procedural steps. At the same time, the government could attempt to impose similar tariffs under other laws, albeit with additional procedural steps. At the same time, the administration could try to impose similar tariffs under other laws, albeit with additional procedural steps. Whether and how this will affect the prices of motorcycles and accessories imported into the US from abroad will become clear in the coming months.
Roberts concluded his ruling by stating that the court does not claim any special competence in economic or foreign policy matters, but only the limited role assigned to it by Article III of the Constitution. In exercising this role, it finds that the IEEPA does not authorize the president to impose tariffs.
