Supreme Court strikes down Trump's tariffs

Summary

Podcast Summary

Marketplace Morning Report

Episode: Supreme Court strikes down Trump's tariffs
Date: February 20, 2026
Host: David Brancaccio

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Episode Overview

In this edition of the Marketplace Morning Report, host David Brancaccio covers a week-defining Supreme Court decision that declared major Trump-era tariffs illegal, the economic consequences of this ruling, and what it may mean for future policy. The episode also touches on sluggish GDP growth, shifts in corporate diversity practices, and the growing presence—and challenges—of autonomous vehicles on American streets. Each segment provides informed analysis and expert voices, offering listeners a brisk but thorough update on today’s top business and economic headlines.

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Key Discussion Points & Insights

1. Supreme Court Rules Against Trump-Era Tariffs

[01:00]

• Ruling Summary: The Supreme Court’s 6-3 decision found that President Trump’s tariffs did not meet the legal requirements under the International Emergency Economic Powers Act (IEEPA).

  • Many tariffs, especially those announced in April on “Liberation Day,” are rendered illegal.

• Consumer Impact: Tariffs raised prices for everyday Americans; a New York Fed report shows U.S. consumers and businesses pay almost 90% of the costs.

• Uncertain Refunds: Billions collected under the now-illegal tariffs may have to be refunded, a process described as potentially chaotic by Justice Brett Kavanaugh.

  • Notable Quote:
    “Refunds of billions of dollars would have significant consequences for the U.S. treasury, and the process would likely be a mess.”
    — Brett Kavanaugh, referenced by Nancy Marshall Genzer ([01:29])

• Next Steps for Tariffs: Trump (or future presidents) still has some legal tools to reimpose tariffs, but some key strategies now require Congressional approval after a waiting period.

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2. Economic Slowdown: Weak GDP Growth

[02:14]

• Report: U.S. GDP grew just 1.4% (annualized) in Q4 2025—less than half expectations.
• Reason:
  • The government shutdown during part of the quarter drove up spending without actual economic production.
  • Notable Quote:
    “There was a big increase in spending that did not translate into production.”
    — Christopher Lowe, FHN Financial ([02:46])

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3. Corporate Diversity Initiatives Under Pressure

[03:15]

• Goldman Sachs: The investment giant is dropping its board-level diversity requirements amidst significant political pressure, especially from the Trump administration.

• Trends:

  • Some firms are rebranding DEI (Diversity, Equity & Inclusion) efforts as “belonging” or “inclusion” to avoid backlash.
  • Others quietly maintain or shift focus based on shareholder or political influence.

• Expert Insights:

  • Carlis Chatman (SMU): DEI rollbacks are often headline-driven, so actions matter more than statements.
  • Atinuque Adidiran (Fordham): Replacing DEI-related language is a common tactic.
  • Mae McDonnell (Wharton): Potential direct costs and fear of government retaliation keep companies and shareholders quiet.
    • “That threat...scares a lot of companies from being vocal and scares a lot of shareholders from being vocal in this space right now.” ([03:42])
  • John Solorzano (Vinson and Elkins): Firms face conflicting pressures—to avoid government targeting and to retain core customers.
    • “You're trying to avoid being kind of targeted by the federal government, but at the same time you're also not trying to be boycotted by your core customer base or consumer base.” ([04:58])

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4. The Challenge of Regulating Autonomous Vehicles

[06:23]

• Scene Setter: David Brancaccio describes the surreal presence of driverless Waymo taxis—“There was an empty one creepily staring at me on my street…”—highlighting how quickly AVs are becoming part of city life.

• Key Issues:

  • AVs struggle with complex, unpredictable situations—e.g., Waymo cars “bricked” during a San Francisco power outage, unable to handle darkened intersections ([06:54]).
  • Jeffrey Tumlin (former San Francisco transit chief) cites AVs’ inability to recognize emergency scenes or construction dangers.
  • Federal AV regulations lag behind the technology; current bills aim to close gaps by standardizing safety requirements.
  • Notable Quote:
    “Without federal oversight, we risk a fragmented patchwork of state laws that could undermine safety, innovation and American competitiveness.”
    — Sen. Ted Cruz ([07:50])
  • Matthew Wood (May Mobility): Federal rules would enforce a uniform “safety case” for AVs, covering unexpected scenarios and failures.

• Big Picture Challenge:

  • Even as regulations evolve, cities are grappling with the immediate practical learning curve as self-driving vehicles expand.
  • Memorable Closing Line:
    “Human drivers kill over 40,000 people a year in the U.S. Whether federal regulation can reduce that toll without creating new risks is the question.”
    — Julia Picard ([08:54])

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Notable Quotes & Memorable Moments

• On Tariff Refunds:
  “Refunds of billions of dollars would have significant consequences for the U.S. treasury, and the process would likely be a mess.”
  — Brett Kavanaugh, via Nancy Marshall Genzer ([01:29])

• On GDP and Government Shutdowns:
  “There was a big increase in spending that did not translate into production.”
  — Christopher Lowe ([02:46])

• On DEI Pressures:
  “You're trying to avoid being kind of targeted by the federal government, but at the same time you're also not trying to be boycotted by your core customer base or consumer base.”
  — John Solorzano ([04:58])

• On Federal vs. State AV Rules:
  “Without federal oversight, we risk a fragmented patchwork of state laws that could undermine safety, innovation and American competitiveness.”
  — Senator Ted Cruz ([07:50])

• On Human vs. AV Safety:
  “Human drivers kill over 40,000 people a year in the U.S. Whether federal regulation can reduce that toll without creating new risks is the question.”
  — Julia Picard ([08:54])

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Timestamps for Major Segments

• Supreme Court Tariff Ruling: [01:00] – [02:14]
• GDP Growth Report: [02:14] – [03:15]
• DEI in Corporate America: [03:15] – [05:13]
• Autonomous Vehicle Regulation: [06:23] – [09:19]

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Overall Tone & Takeaways

The episode smoothly delivers urgent national news with a balance of concise facts and thoughtful commentary. While the tone is brisk and anchored in analysis, David Brancaccio and Marketplace’s correspondents use memorable, relatable language and expert voices to keep listeners engaged and informed on events shaping the economic and regulatory landscape.

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For more information or related stories, visit Marketplace.org.

Transcript

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[David Brancaccio]

President Trump had no legal right to impose many of those tariffs the way he did. I'm David Brancaccio in Los Angeles. The U.S. supreme Court just ruled that the cornerstone of the president's tariff policy is illegal. The 6 to 3 ruling says the International Emergency Economic Powers act is not designed for this. Among tariffs rendered illegal are the ones Trump announced last April on what he called Liberation Day. Marketplace's Nancy Marshall Genzer covers Washington.

[Nancy Marshall Genzer]

The tariffs now ruled illegal increase prices for consumers. A report from the Federal Reserve bank of New York says US businesses and consumers end up shouldering nearly 90% of the cost of all import taxes. Some businesses are vowing to go to court to get a refund. An enormous amount of money has been collected by the U.S. treasury under these tariffs, which are now deemed illegal. We don't know yet if that money will be refunded and if so, how. In the opinion, Justice Brett Kavanaugh notes that refunds, if it comes to that, would be an issue. He adds that, quote, refunds of billions of dollars would have significant consequences for the US treasury, and the process would likely be a mess. I'm Nancy Marshall Genser for Marketplace.

[David Brancaccio]

President Trump has other tools under law to reimpose some tariffs without prior consent of Congress. But at least one key strategy would need congressional approval after some months had passed. What a miss. The economy grew at less than half the rate expected as 2025 wound down. That's from today's calculation of gross domestic product, which grew at an annual rate of 1.4% in the October to December quarter, when economists were expecting twice that Christopher Lowe of FHN Financial Government shutdown

[Christopher Lowe]

In a nutshell, it's because we measure government activity based on the money they spend and usually that works really well. But of course, with the government shut down for half of the quarter and non essential workers literally not allowed to do any work but still paid for it, well, there was a big increase in spending that did not translate into production.

[David Brancaccio]

One of the most powerful players on Wall street, this is Goldman Sachs is ditching its diversity criteria for its board. According to multiple published there's pressure against these principles by the Trump administration, yet studies indicate that workplaces that include more women, people of color, LGBTQ people and those from other marginalized groups are more productive, innovative and profitable. Here's Marketplace's Carla Javier Carlis Chatman at

[Carla Javier]

SMU says a lot of the high profile announcements and DEI rollbacks are kind of lightning rod headline generating activity. So instead of listening to what companies say, Atinuque, Adidiran et Fordham says watch what they do. Some are indeed backing away from diversity efforts, but in other cases companies are, you know, replacing words like equity with belonging, inclusion, etc. Companies are making these moves because they're afraid that the federal government will retaliate against them if they don't. Mae McDonnell at the University of Pennsylvania's Wharton School says that threat, it introduces direct costs that I think scares a lot of companies from, from being vocal and scares a lot of shareholders from being vocal in this space right now. Some shareholders have pressed companies to abandon diversity initiatives, but others see value in them, McDonnell says. Even in this environment, pro DEI shareholders can have conversations behind closed doors with board leaders. Companies that are trying to navigate these waters have a lot of conflicting forces to take into consideration, says John Solorzano of Vinson and Elkins, who consults firms on DEI issues.

[John Solorzano]

You're trying to avoid being kind of targeted by the federal government, but at the same time you're also not trying to be boycotted by your core customer base or consumer base. And there have been some pretty high profile companies that have been targeted both on the left and the right, which

[Carla Javier]

Solorzano says puts companies in an impossible position. I'm Carla Javier for Marketplace.

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[David Brancaccio]

Los Angeles neighborhood runs thick with driverless Waymo taxis. There was an empty one creepily staring at me on my street when I left the house in the wee hours. Today, fully self driving cars are operating in more than two dozen states, but federal rules have not kept up. Now federal lawmakers are weighing multiple bills focused on safety. Julia Picard has the story.

[Julia Picard]

Last December, during a power outage in San Francisco, an observer filmed lines of Waymo Robo taxis stopped in their tracks and posted it to social media.

[Carla Javier]

Someone's gonna set this thing on fire if it doesn't move soon.

[Julia Picard]

Traffic lights, which guide the self driving cars, had gone dark. Not knowing what else to do, the cars just bricked. Autonomous vehicles, or AVs, have been picking up passengers on the streets of San Francisco since 20. Jeffrey Tumlin led San Francisco's transportation agency. He says the rollout was chaos.

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AV is driving straight into emergency response scenes because they didn't know what a fire truck or a fire hose really was. AVs driving into construction sites and into wet cement.

[Julia Picard]

Tumlin says before AVs scale further, they need to prove they can safely handle real world complexity. And lawmakers in Washington agree. Multiple bills are being debated in Congress. Here's Senator Ted Cruz in early February.

[Marketplace Announcer]

Without federal oversight, we risk a fragmented patchwork of state laws that could undermine safety, innovation and American competitiveness.

[Julia Picard]

Federal regulation for vehicle design, construction and performance already exist. They just haven't been updated. For AVs. Federal regulation would require AV companies to submit a safety case showing clear documentation

[Marketplace Announcer]

and evidence that you followed the process and that you can articulate what the system is designed to do and that it has been validated for doing what it was designed to do.

[Julia Picard]

Matthew Wood is the vice president of autonomy, integrity and validation at the AV company May Mobility. He says engineers already use safety cases, but federal regulation would make them consistent, mandatory and enforceable. That means defining how a vehicle minimizes risk when something unexpected happens, from a sensor failure to a power outage or a protest in the street.

[Marketplace Announcer]

What should the vehicle do if it doesn't know what to do?

[Julia Picard]

But even with federal safety requirements, city streets are still absorbing the steep learning curve of self driving cars. As AV companies strive to prove they're safe, it's worth mentioning human drivers kill over 40,000 people a year in the U.S. whether federal regulation can reduce that toll without creating new risks is the question. I'm Julia Picard for Marketplace.

[David Brancaccio]

Again, there's news the economy grew at an annual rate of just 1.4% last quarter, compared to 4.4% in the summer. It's the Marketplace Morning Report from APM American Public Media.

[Marketplace Announcer]

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