What the Supreme Court’s tariff decision means for small businesses

Summary

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Podcast Summary: Consider This from NPR

Episode: What the Supreme Court’s Tariff Decision Means for Small Businesses

Air Date: February 20, 2026
Host: Scott Detrow
Guests: Nina Totenberg (NPR Legal Affairs Correspondent), Scott Horsley (NPR Chief Economics Correspondent), Robert Leo (Trade Lawyer), Victor Schwartz (Wine Importer)

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Overview

This episode breaks down the Supreme Court’s landmark decision declaring a significant portion of former President Trump’s tariffs unconstitutional, analyzing what this means for small businesses, U.S. trade policy, and the broader economy. The discussion covers both legal and economic implications, including how Congress and the presidency share powers over tariffs and what may be next for U.S. businesses and tariff payers.

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Key Discussion Points & Insights

1. Supreme Court Rules Against Trump’s Tariffs

• Main decision: The Supreme Court ruled 6–3 that the President cannot unilaterally impose sweeping tariffs under the International Emergency Economic Powers Act (IEEPA); that power resides with Congress.
• Historical context: Chief Justice John Roberts’ majority opinion cited the constitutional allocation of taxing and tariff authority to Congress, referencing the Founders’ desire to avoid taxation without legislative accountability.
  • Quote: “Having just fought a revolution motivated in large part by taxes imposed on them by the King of England… the framers wrote a constitution that gives Congress the taxing power because the members of the legislature would be more accountable to the people.” (Nina Totenberg, 03:44)

2. Economic Impact on Businesses

• Small businesses particularly hit: Many import-dependent businesses, such as Victor Schwartz’s wine business, struggled with sudden and shifting tariffs, disrupted cash flow, and confusion over pricing.
  • Quote: "Finding the money to pay the tariffs, it put a big hole in our cash flow. For us, it's like in the six-figure range. Where's that money gonna come from?" (Victor Schwartz, 01:10)
• Tariff burden: U.S. mid-sized businesses paid three times as much in tariffs as before Trump’s return to office, costing tens of billions annually.

3. The President’s Response and Possible Next Moves

• Trump's reaction: President Trump denounced the ruling, called the court “fools and lapdogs for the RINOs and the radical left Democrats,” and vowed to seek other statutory pathways to impose tariffs.
  • Quote: "Other alternatives will now be used to replace the ones that the court incorrectly rejected." (Donald Trump, 01:39)
• Legal reality: Nina Totenberg explained that while other statutes do allow for some presidential tariff powers, they are much more limited—often requiring Congressional approval after six months and lessening executive flexibility.

4. Broader Economic Effects

• Federal revenue: The government was collecting ~$30 billion/month in tariffs, and the ruling wipes out about half. This will raise the federal deficit but isn't a crippling fiscal blow (tariffs = approx. 5% of revenue).
• Market reaction: Markets responded mutely, perhaps expecting the White House to replace outlawed tariffs with other measures, though with more constraints.
• Economic resilience: Despite tariffs, U.S. GDP grew 2.2% in 2025; imports increased slightly as businesses sought non-targeted foreign suppliers.

5. Refunds and What’s Next for Businesses

• Refund issue: Companies are expected to seek refunds for improperly collected tariffs. The process’ details are yet undecided and will likely be clarified by a lower court.
  • Quote: "It won't be a mess. Customs has all this information electronically, and...our clients...know how much they paid." (Robert Leo, 07:19)
• Advocacy: The National Retail Federation urges a “seam[less] process” for refunds.

6. Court’s Reasoning & Judicial Dynamics

• Deference to congressional authority: Nina Totenberg notes the majority opinion is a “John Roberts special,” respectful of Congress’ constitutional prerogative over raising revenues.
  • Quote: “The decision clearly, clearly tells the president to stay in his constitutional lane.” (Nina Totenberg, 07:50)
• Fractured court: Though the split was 6–3, justices were divided not just along ideological lines but in their reasoning—yielding five separate opinions, described as “everybody had something to say.”
  • Roberts’ opinion joined by Gorsuch, Barrett, Kagan, Sotomayor, Jackson; Kavanaugh dissented.
  • Memorable moment: “Everybody had something to say.” (Nina Totenberg, 09:09)

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Notable Quotes & Memorable Moments

• “The tariffs changed so many times...we had to go through and change our entire price book, many hundreds of items four times.”
  — Victor Schwartz (00:47)
• “They're just being fools and lapdogs for the RINOs and the radical left Democrats.”
  — Donald Trump (04:22)
• “Stocks rose, but not very much. It was a pretty muted reaction compared to the big sell off last year...”
  — Scott Horsley (05:48)

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Important Timestamps

• 00:47–01:20: Small business challenges with tariff unpredictability (Victor Schwartz)
• 03:44–04:27: Supreme Court’s reasoning and Trump’s reaction (Nina Totenberg, Trump)
• 05:08–05:37: Economic scale and implications of the ruling (Scott Horsley)
• 06:24–06:51: Tariffs’ limited impact on trade and GDP (Scott Horsley)
• 06:55–07:19: Prospects for tariff refunds and logistics (Scott Horsley, Robert Leo)
• 07:50–08:25: What the decision says about the Court’s current philosophy (Nina Totenberg)
• 08:28–09:09: Court dynamics and judicial opinions (Nina Totenberg)

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Conclusion

This concise yet far-reaching Supreme Court decision reasserts Congressional authority over tariffs while introducing practical uncertainty for businesses—especially those pursuing refunds. President Trump’s options for future executive-imposed tariffs are sharply constrained, and any further moves will require more Congressional involvement. Despite the political volatility and market disruptions triggered by the tariffs, U.S. economic fundamentals remain strong, and the process for repaying affected importers is technically manageable. As the legal and policy landscape shifts, small businesses are left awaiting the next developments—both in Washington and in the courts.

Transcript

[Donald Trump]

The Supreme Court's ruling on tariffs is deeply disappointing and I'm ashamed of certain members of the court.

[Scott Detrow]

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

[Donald Trump]

industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again.

[Scott Detrow]

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.

[Victor Schwartz]

The tariffs changed so many times. We had to deal with so many different shipping issues. We had to, we had to go through and change our entire price book, many hundreds of items four times.

[Scott Detrow]

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.

[Victor Schwartz]

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 gonna come from?

[Scott Detrow]

According to the JPMorgan Chase Institute, mid sized US 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.

[Donald Trump]

But other alternatives will now be used to replace the ones that the court incorrectly rejected.

[Scott Detrow]

Consider this, the Supreme Court has shot down one of President Trump's signature economic policy policies. So what comes next. From NPR, I'm Scott Detrow.

[NPR Host (Winter Games segment)]

Today on Up First Winter Games, NPR's daily video podcast, Team USA's Alyssa Liu broke a 20 year medal drought to take home gold in women's figure skating and a thrilling overtime gold medal win for U.S. women's hockey. Reaction and more from behind the scenes today on Up First Winter Games. You can watch us on NPR's YouTube channel.

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This week on Up first from NPR News, funding ran out for the Department of Homeland Security and Congress went home. DHS does a few important things like secure the airports or the coasts or the president. Now their funding is uncertain. And what does this say about the way Congress works or doesn't? Follow us for the latest each morning on up first on the NPR app or wherever you get your podcasts,

[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 iepa, 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 US Both of which he said were national emergencies and threats to national security. But the Supreme Court disagreed, ruling his use of IEEPA unconstitutional and wiping out a big chunk of the tariffs Trump set 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.

[Nina Totenberg]

Hello.

[Scott Horsley]

Good with you.

[Scott Detrow]

Nina, I'm going to start with you. What did the court say?

[Nina Totenberg]

Writing for a hefty 6 to 3 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.

[Donald Trump]

They're just being fools and lapdogs for the RINOs and the radical left Democrats.

[Robert Leo]

And I will just note that's an insult in Republican world, Republican in name only, that Trump was citing.

[Scott Detrow]

Trump says he can just use other

[Robert Leo]

statutes to do what he wants to do anyway. Is that true, Nina?

[Nina Totenberg]

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 Detrow]

Scott, how much money is at stake here?

[Scott Horsley]

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 US 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 US Treas.

[Robert Leo]

These tariffs and the erratic way that they were introduced at so many points really, really jolted the economy around the

[Scott Detrow]

world so many times. How did the market react to the

[Robert Leo]

news from the court?

[Scott Horsley]

Stocks rose, but not very much. It was actually a pretty muted reaction compared to 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 IPA to impose unlimited tariffs on goods from any country for any reason.

[Robert Leo]

And another thing that happened today is that we got some new numbers on economic growth. What did they tell us about the effect of tariffs on the economy?

[Scott Horsley]

The economy weathered Trump's tariff campaign in relatively good shape last year. We Learned today that 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.

[Robert Leo]

Are the companies that paid these tariffs going to be lining up for refunds now?

[Scott Horsley]

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 comments that came up during oral arguments. But I spoke today with veteran trade lawyer Robert Leo. He says refunding all those tens of billions of dollars will take some work, but he says it's very doable.

[Unknown Guest (brief response)]

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.

[Scott Horsley]

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 seam process to refund the money that was wrongly collected from those importers.

[Scott Detrow]

Nina, this court has been so deferential

[Robert Leo]

to executive power, especially in recent years. What does this opinion tell you about

[Nina Totenberg]

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 in the majority as much as necessary and got the job done in Supreme Court terms quite quickly. The decision clearly, clearly tells the president to stay in his constitutional lane. But at the same time, Roberts opinion only decides what has to be decided and gives the lower courts clear guidance on how to limit any Trumpian efforts to circumvent the opinion.

[Robert Leo]

It was a 6:3 split. How did that split break down?

[Nina Totenberg]

Robert's 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, did not write an opinion.

[Robert Leo]

Everybody had something to say.

[Nina Totenberg]

Exactly.

[Robert Leo]

That is NPR legal affairs correspondent Nina Totenberg, as well as Scott Horsley, our chief economics correspondent. Thanks to both of you.

[Nina Totenberg]

Thank you.

[Unknown Guest (brief response)]

You're welcome.

[Scott Detrow]

This episode was produced by Tyler Bartlam with audio engineering from Ted Mebane. It was edited by Christopher Intagliotta, Courtney Dorning, Scott Horsley and Christian Ev Calamore. Our executive producer, Sami Yenigun. It's CONSIDER this from npr. I'm Scott Detrow.

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