Omnichannel

Tariff court ruling brings uncertainty, big questions for retail industry

The Supreme Court's tariff decision draws applause and uncertainty regarding impact on the retail segment.

Generated by AI/Adobe Stock

February 23, 2026 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com

Summarize with

The Supreme Court decision on Feb. 20 striking down the Trump administration's use of the 1977 International Emergency Economic Powers Act to impose across-the-board tariffs is delivering certainty or uncertainty for the retail industry depending on who is queried about the potential impact going forward.

In a 170-page decision and a 6-3 vote, the court ruled that Trump's use of IEEPA was not lawful, reported Connect CRE.

The ruling comes at around the time of the year when many retailers are starting to plan for the end-of-year holiday season.

President Donald Trump began enacting new tariffs in January 2025, a legislative strategy that has continued into 2026. The court struck down the tariff policies by a 6-3 decision with the majority stating the Constitution "very clearly gives Congress the power to impose taxes and tariffs. "The Framers did not vest any part of the taxing power in the Executive Branch," Chief Justice John Roberts wrote, according to an AP report.

American importers and customers are bearing the brunt of enacted tariffs. Importers and customers are paying 96% of the tariffs, while countries importing goods are paying 4%, according to a report from the German Kiel Institute for the World Economy. A report in early February revealed the tariffs will amount to an average tax increase, per U.S. household, of $1,300 in 2026, according to data from the Tax Foundation organization. Tariffs cost U.S. households $1,000 in 2025.

Big questions ahead

The decision raises big questions regarding impact on the retail segment, according to John Mercer, head of global research for Coresight Research.

Mercer, as a senior analyst, undertakes research with a focus on European retailing, as well as U.S .food retailing

"The decision reinjects substantial uncertainty over trade policy and the tariff rates that will be paid by retailers and brands," Mercer said in an email interview.

While the Supreme Court's ruling is significant, Mercer said it is unlikely to resolve the tariffs issue entirely.

"There is a potential upside to this uncertainty, in that it reduces the probability of full tariff implementation, but with the expectation that this Supreme Court decision will be challenged," said Mercer.

"Retailers and brands have spent the past year planning for currently announced tariffs, which now effectively become the worst-case scenario," said Mercer, noting that on the consumer side there was negative reactions to tariff news in 2025.

Around two-thirds of consumers (65.6%) hold significant concerns that new tariffs increase the price of goods, he said.

"The decision reinjects substantial uncertainty over trade policy and the tariff rates that will be paid by retailers and brands. It adds further complexity to planning for sourcing. Companies have had substantial time to adjust to the previously announced tariffs and are likely expecting to incorporate those adjustments into holiday orders with manufacturers," said Mercer.

Trump's respond to ruling

Shortly after hearing the court's decision President Trump responded in several ways. He launched derogatory comments about the court describing them a "disgrace to the nation" and ordered an immediate 10% tariff on all imports. A day later, he raised that temporary rate to 15% citing section 122 of the Trade Act of 1974., according to a report at The Guardian.

"They're very unpatriotic and disloyal to our Constitution," Trump said, noting he was "ashamed of certain members of the court." He also accused the justices of being swayed by foreign interests and unnamed "slimeballs," according to a New York Times report.

The Trade Act of 1974 allows the president to impose a levy of up to 15% for 150 day s, and that, the administration has to seek congressional approval, according to a report at The Guardian.

Industry groups respond

The National Retail Federation called the Supreme Court ruling a "much-needed certainty for U.S. businesses and manufacturers," in a statement released the day of the court ruling.

"Clear and consistent trade policy is essential for economic growth, creating jobs and opportunities for American families. We urge the lower court to ensure a seamless process to refund the tariffs to U.S. importers. The refunds will serve as an economic boost and allow companies to reinvest in their operations, their employees and their customers," Executive Vice President of Government Relations David French said in the statement.

The Tariffs Cost Us group called the court's decision "welcome news" for both businesses and American families who have struggled with unpredictable trade policy.

"By restoring limits and accountability to how tariffs are imposed, the court has taken an important step toward greater stability and clarity for American businesses and families," Alex Wolf, founder of Spielcraft Games in Omaha, Nebraska, said in the group's statement.

Retailer, politicians response

New York Democratic Senator Chuck Schumer called the court's ruling a "win" for the American consumer.

"Now Trump should end this reckless trade war for good and finally give families and small businesses the relief they deserve," Schumer told the New York Times.

Chicago Gov. JB Pritzker is demanding the administration refund the state of Illinois more than $8 billion given the court's ruling, according to a CBS News report.

In a letter to Trump Pritzker wrote, "On behalf of the people of Illinois, I demand a refund of $1,700 for every family in Illinois. There are 5,105,448 households in my state, bringing the total damages you owe to $8,679,261,600."

Anthony Ferry, CEO of Wayvia, a company that works with 2,000-plus brands and 32,000 retailers globally, said the court's ruling has "unleashed chaos."

"The first thing many brands and retailers will be asking is how they get their money back. They've paid billions of dollars in tariffs over the past few months. Nobody knows what that process will look like or if the government will pay up," Ferry said in an email.

"One thing is clear: The big e-commerce beasts like Amazon and Walmart have proven themselves capable of playing tariff roulette. They know exactly where their supply chains reach, what taxes they will pay, and they have the scale to choose where they absorb costs and where they pass them along to the consumer. But smaller players will continue to feel the pain. Their capacity to absorb costs is much more limited, and simply calculating customs duties is a time suck many cannot afford."

About Judy Mottl

Judy Mottl is editor of Retail Customer Experience and Digital Signage Today. She has decades of experience as a reporter, writer and editor covering technology and business for top media including AOL, InformationWeek, InternetNews and Food Truck Operator.

Connect with Judy: