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Supreme Court Strikes Down Trump's Sweeping Global Tariffs; Court Doesn't Say Whether Tariffs Already Paid Must Be Refunded. Aired 12-12:30p ET

Aired February 20, 2026 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[12:00:00]

DANA BASH, CNN HOST, INSIDE POLITICS: Welcome to Inside Politics. I'm Dana Bash. And the breaking news we are covering is a huge blow to President Trump dealt by the conservative Supreme Court he helped build. The president's global tariffs, his signature economic policy, which he imposed on nearly every country in the world, struck down six to three.

It was Chief Justice John Roberts who wrote the majority opinion, stating plainly that the president exceeded his constitutional authority. Roberts writing quote, the president asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration and scope.

In light of the breadth, history and constitutional context of that asserted authority, he must identify clear congressional authorization to exercise it. In dissent were conservative justices, Clarence Thomas, Samuel Alito and Brett Kavanaugh. President Trump called the decision a quote, disgrace, but says, he has a backup plan.

I want to go straight to the White House -- CNN senior White House correspondent Kristen Holmes, is there. What are you hearing from your sources about what that backup plan might be?

KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, before we get to the backup plan, just seconds ago, Dana, the press secretary posted on X, that President Trump is going to be giving his own press conference today at 12:45 to talk about the Supreme Court's tariff decision.

Now, we knew that he wanted to respond to this, whether it was going to be a video or bringing reporters in, but clearly, he wants to bring all of the press pool together to respond to this in front of the podium here, so we will be bringing you any information on that as it comes in. This just happened just one second ago.

We know that President Trump has been enraged by this decision, while there were plenty of people around him who had warned that this could happen, who were bracing for this to happen. President Trump learned of this while he was in a meeting with governors, both Democrat and Republicans.

And I was told that during this breakfast, breakfast meeting that it was cordial, that people were getting along, it was productive. And then President Trump learned about this ruling. At that point, he grew enraged. Not only did he say that it was a disgrace that they had ruled this way, but at one point he started ranting against the courts.

A source telling me that he said these effing courts, when he was talking and then essentially he cut the meeting short or the breakfast short, leaving and saying that he was going to go craft a response to this tariff ruling.

One thing to keep in mind here, Dana, this is really at the core of so much of President Trump's agenda. It's not just the financial aspect here, the economy here, which we know, this is central to -- these tariffs are central to, it's also how he has navigated almost all of his foreign policy. He has dangled tariffs. He has used tariffs in negotiations. This would strip him of all of this.

Now you mentioned just now this idea that President Trump said in the meeting that he had a backup plan, and we do know that there have been a number of officials, both within the White House and advisors to the White House who have been working on some kind of backup plan. We're not entirely clear what that is, and if that's something he's going to present today.

But I will tell you, I spoke to a number of Trump's allies in the aftermath of this. They pointed, in particular to Kavanaugh's dissent on this, specifically saying that they believe Kavanaugh wright -- wrote an outline for how President Trump could move forward with tariffs by categorizing them under a different entity than the one that he had. Unclear, if that's the direction the White House is going to go in. We're keeping our ears to the ground, and, of course, asking as many officials as we can for more updates on that.

BASH: All right, Kristen, thank you so much. Really interesting point about Kavanaugh, which we'll discuss here with our esteemed panel, and thanks for bringing us that news. So, in just under 45 minutes, we are expecting President Trump to hold a press conference to talk about this major, major defeat that the Supreme Court dealt him. Thanks again, Kristen.

Thanks, one and all for being here. Going to my panel now. Paula, I want to start with you, and I want to read another part of the majority opinion written by the Supreme Court, the chief. It is also telling that in IEEPA's half century of existence, no president has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope. The lack of historic precedent, coupled with the breadth of authority that the president now claims, suggests that the tariffs extend beyond the president's legitimate reach.

[12:05:00]

PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: There it is, the bright line. We have found where the Supreme Court is willing to draw that line because the defining characteristic of President Trump's first and second terms are his expansive definition of executive power. And so, often when that was challenged, it would go before the Supreme Court, and there were even times when his own lawyers were surprised how far they were going to let him go.

So, there's been this question about, whether there still is a respect for the separation of powers, and that's what I think really matters. There's obviously economic consequences here that need to be -- those need to be handled. But here what this is, is an affirmation of the separation of powers and that matters so much at this moment in the Trump administration, because right now, I think we're seeing a lot of questions about how he might use his office to take -- he has taken over the Justice Department. Used that to pursue his enemies, use that to try to put his thumb on the scale in the elections.

Will there be a check on President Trump? People had questions about the Supreme Court after they saw all these decisions, but today, it shows that this six-three majority for the first time decided against Trump. There are limits and they are willing to show him where those are.

BASH: And Elliot, I would say, yes, it's about the separation of powers but I think you were getting at that. It's this is a president who has pushed the boundaries of executive power more than we have seen and at least a generation, would even say multiple generations.

ELLIOT WILLIAMS, FORMER DEPUTY ASSISTANT ATTY GENERAL FOR LEGISLATIVE AFFAIRS, DOJ: Right. And two leading voices on the court, one that was in majority and one that was in the dissent, that's at Kavanaugh and Roberts have been at the forefront of this question of how powerful executive authority ought to be. And it's interesting to see not a fight brewing, but an intellectual fracas of sorts between the conservatives on the court over this idea.

And you're going to hear these words again over the years, this major questions' doctrine, this idea that in order for the executive to act, Congress needs to have explicitly given it the authority to do so. Well, they're in disagreement about it today. Kavanaugh saying, no, this is clearly squarely within the authority of the president.

Roberts and Amy Coney Barrett and Neil Gorsuch saying, no, not quite. Congress did not delegate this authority. And so, I think the next several years of debates between the conservatives over what the reach of conservative jurisprudence ought to be. You know, we saw the roadmap for it here.

BASH: And Zolan, this is one of the many topics that you discussed with the president during that very lengthy interview that he gave you last month. I'm going to read a quote. I'll have to find -- this is the question about what happens if this happens that the Supreme Court strikes down tariffs.

I'll have to find some other alternative. It won't be as clean, it won't be as pretty as it is right now, you have a lot of alternatives. You could take a look at the word license. You know what I mean by that? Do you know what I mean? You could take a look at the word license. License is a very pretty word. It's sort of strange. I'm allowed to license because when you license, you get, you know, you get money for licensing things. Can you put that into English when it comes to because we know what it means. I mean, and he used this, you know, to make a lot of money in his private life to license the word Trump on a lot of different products. How does that pertain to how he could save tariffs?

ZOLAN KANNO-YOUNGS, WHITE HOUSE CORRESPONDENT, THE NEW YORK TIMES: Sure. He's referring to one of a number of authorities that his officials have been looking at for some time now, right, before this decision, in anticipation of this potential outcome. There he was referring to licensing but different imports to basically try and regulate what could come into the United States. Two, they state, encourage more domestic manufacturing.

Another authority that they could look at is Section 301, which they used to also tear China in the first term. Remember, there were tariffs in the first term, right?

BASH: Right.

KANNO-YOUNGS: Not as sprawling and at the scale that we've seen in this term. And just what I also saw in that comment, when we asked him about this, he was very candid on just how disappointed he would be in the justices that he helped put on the Supreme Court. It almost seemed like he would be personally insulted by this. But there was also the fact that he was just acknowledging when he talks about it won't be as clean.

You know, he has used tariffs, not just as an economic tool, but as almost a diplomatic sledgehammer, right? This is what he hangs over nations when they don't do what he want -- what he wants. It was his threat before Greenland.

BASH: I mean, it's a carrot and a stick.

KANNO-YOUNGS: That's right, that's right.

BASH: Yeah.

KANNO-YOUNGS: And often, when he talks about different peace deals, he's trying to get tariffs or the tool that he's using, even though that's disputed, just how much peace he has obtained. But this is extraordinary here. This decision doesn't just impact the economic agenda, but really throughout President Trump's foreign policy and domestic agenda.

BASH: And that's really key, because Mario, this Supreme Court decision doesn't wipe out all the tariffs.

KANNO-YOUNGS: Right.

BASH: But the tariffs that he -- I was just talking to a Republican member of Congress because we can talk about the politics in a second. My suspicion was that there are a lot of them who are not going to be upset about this because it has created some affordability issues for them back home. But when it comes to what you were discussing, it does seem to take that ability to use tariffs, not just as economic policy, but as a foreign policy lever off the table.

[12:10:00]

MARIO PARKER, NATIONAL POLITICS TEAM LEADER, BLOOMBERG: Yes, no. Excuse me, absolutely. A couple of years ago, on the campaign trail in 2024, we interviewed the president and he was outlining his vision for tariffs. He was talking about the historical context, et cetera. What was clear was, and Zolan kind of alluded to this with tariffs and Trump won, was that this was the evolution of his Make America Great Again policy, right?

He looked at the time in history, U.S. history, when we did tariff other nations as a more powerful time, right? He's saying that domestically, this helps taxpayers. This helps the U.S. This protects workers, those blue-collar workers who came out for him over a decade ago.

But then also on the foreign stage as well, being able to negotiate with President Xi in China right, being able to hold the threat of tariffs over the head of some of the U.S.'s allies and using that as a cudgel as well. So, what this robs him of? The reason, I think, that he was so disappointed into this is because he sees it as part and parcel to his political orthodoxy.

BASH: It's also because, you know, Donald Trump used to be a Democrat. Donald Trump thought about running as an independent. So, he has sort of morphed or evolved, however you want to put it over the years. What he has been the most consistent on in his entire life is his love of tariffs and his desire to implement tariffs.

Let's just look at an example or some examples of what he has even said recently about tariffs.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF UNITED STATES OF AMERICA: Without tariffs, this country would be in such trouble right now. We're taking in so much money with the tariffs now that it's such a pleasure. The word tariff, it's more beautiful than love. It's more beautiful than it's the most beautiful word. To me the most beautiful word in the dictionary is tariff and it's my favorite word.

(END VIDEO CLIP)

BASH: And we're going to go in the way, way back machine to a Larry King interview that he did in 1987. So, we're talking about almost 40 years ago, talking about the concept that is effectively tariffs.

(BEGIN VIDEO CLIP)

TRUMP: You can call it a tax. You can call it whatever you want to call it, but those countries should be paying us major billions of dollars, and you won't have any deficits whatsoever and then we'll be able to help the poor and the sick and the homeless and the farmers and everybody else.

(END VIDEO CLIP)

SEUNG MIN KIM, WHITE HOUSE REPORTER, ASSOCIATED PRESS: It's actually funny that he kind of acknowledges that it could be a tax because that is part of what the Supreme Court was arguing. That it was -- because tariffs are effectively a tax. It is Congress's power to do it and that's what a lot of lawmakers, including these pro-trade Republicans have been arguing for some time.

But no, I can't count how many times he has said the word tariff is his favorite word in the dictionary. It is such a core part of his political beliefs and what he -- and what he has pushed during his presidencies, but it is something that has put him so at odds with Republicans, who are traditionally a pro-free trade party. They don't like tariffs.

And you saw a little bit more of that push back in the first term, when you had people like Pat Toomey and Jeff Flake around, who are these very ardent pro-free traders.

BASH: Well, Mike Pence was his vice president.

KIM: And yes, and Mike Pence, you know, the ultimate belief in that policy. Now it's been a lot more quiet from Republicans on this point. Speaker Mike Johnson actually just put out a statement while we went on air, saying that Congress and the administration will find a way forward after this disappointing or, in his view, a decision that he disagrees with. But you know, this is Congress. I mean, this is -- it's not going to -- I think we can bet that something's not going to happen here as regards to the president's tariff policy.

BASH: And Mike Pence, I'm told, just tweeted that this is a victory for the American people.

KIM: Here we go.

BASH: Tia, hold, I know you have a lot of important thoughts and you guys are going to want to hear. We're going to sneak in a quick break. Coming up. We are waiting for President Trump to make his first remarks on this massive Supreme Court ruling on his signature tariff issue.

We're going to bring that to you live, of course. Plus, a lot more to unpack, including, what about the billions of dollars that have come into the federal treasury because of these tariffs? We don't know. We'll try to figure that out after a break.

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[12:15:00]

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BASH: Back to the breaking news. The Supreme Court ruling this morning that President Trump's emergency tariffs are illegal. What is unclear in this ruling is what will happen to the money collected from the tariffs. Either way, the decision is an enormous blow to the president's economic agenda.

CNN, business and politics correspondent Vanessa Yurkevich joins me now. Let's start with that question about the money. You know, one of the dissenters in the Supreme Court, Brett Kavanaugh, made clear in his dissenting opinion that the court is not saying what will happen. So, it's kind of going to be a free for all, it sounds like. What are you hearing from your sources in the business community?

VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: Yeah. Well, I'm hearing from industry groups all the way from the restaurant association to the footwear association. All of them are reacting very positively to this ruling, because if you remember Dana, it is American businesses and importers who have been paying these tariffs for about a year now. And then ultimately having to make the decision to pass those tariffs down to consumers.

[12:20:00]

I'm hearing from the footwear association who is calling for new trade policy that will help take some of the financial pressure off this industry. 99 percent of the shoes on our feet, Dana, are imported. I'm hearing from the distilled spirits' council that is saying, this reversal of these tariffs will help take financial pressure off of restaurants and bars at a time when affordability is so important to many Americans.

And as you said, I'm hearing from so many business groups that are saying they want that money refunded, and they want it refunded very quickly. The National Retail Association, which represents major U.S. retailers like Walmart, Target and Macy's calling for those refunds to happen pretty quickly. But of course, as you raise that is the big question mark, just how and when does that process start to take shape?

Now that these tariffs are off, I am hearing from the Port of Los Angeles, the executive director there, Gene Soroka, saying that they are now bracing for a surge of cargo vessels to come into the United States, landing on the shores of Los Angeles. Right now, we are in the Chinese Lunar New Year, so factories are largely shut down in China.

But he is hearing already from business groups and importers saying that they want to get those factories up and running as soon as possible to bring in key items into the United States that are heavily imported, toys, shoes, electronics, appliances, because they are also nervous, Dana, about the fact that potentially President Trump could find another way to impose tariffs.

So, they see this as a window, and there's going to be a rush of cargo coming into the United States in the next couple weeks. The Port of Los Angeles says they're bracing for it, but they are ready, Dana.

BASH: Thank you so much, Vanessa. I appreciate it. Speaking of Los Angeles. The governor of California, Gavin Newsom, just weighed in on what happens to the nearly $200 billion, that's right, $200 billion. It's estimated to have been already paid by these countries into these tariffs. Quote, time to pay the piper, Donald. These tariffs were nothing more than an illegal cash grab that drove up prices and hurt working families. Cough up.

My panel is back. Elliot?

WILLIAMS: I will let the governor speak for himself. What I will say, though, is that, expect a lot of litigation over this. There have already been, I believe, over a thousand suits filed for recovery of tariffs and different duties that have already been paid. They'd probably be in the court of international trade. But even that, like, you know, we defile in federal district court or wherever else, so even that's complicated.

I think the other tricky thing here is that normally, when you have a lot of plaintiffs suing, you could just join them all in one big class and have a class action for this $200 billion. Well, it's not clear that you could join all of these different international, national, small business, retailers, whatever else, who are the different people who might be suing under one banner.

So, I think what, you know, Justice Kavanaugh might be on to something a little bit that maybe it's not a mess, but it's certainly not getting resolved anytime soon. There's going to be a lot of time for the courts to sort out exactly how to pay people back.

BASH: I mean, it sounds like a mess. There's no way to sugarcoat, it sounds like a mess. Tia, I want to show our viewers an important bit of data, and that is the trade deficit for last year, 2025 at the trade deficit. It was down by only two tenths of a point. So, what that means, is it barely changed last year? And this was one of the main arguments that President Trump, again, has used for decades, that this is going to help with American businesses and it's going to help with the trade imbalance. So far, that has not happened.

TIA MITCHELL, WASHINGTON BUREAU CHIEF, THE ATLANTA JOURNAL- CONSTITUTION: Yeah. And it was always easier said than done, to just say, you know, you put on tariffs and all of a sudden manufacturing in U.S., U.S. jobs just skyrocket, because we know these things take time. It takes time to start up the types of plants and warehouses and businesses that Donald Trump wants on U.S. soil.

Also, I think what we've been talking about throughout this hour is that, yes, there are some businesses that did benefit from the tariff policy because it did require, you know, as the supply chain became more expensive from China or other countries, maybe they did look to U.S. companies. He highlighted one such company in Georgia just yesterday.

That being said, we know that there are many other businesses and industries that had no choice but just to pay the higher prices because their supply chain is still very dependent on international goods. And so, I think that's the trade-off.

[12:25:00]

And I think that's what, you know, there was always an oversimplification that we would hear from the president's office, even the Larry King clip that you just showed, you know, he said, we're going to have tariffs, and then we're going to bring down the cost of goods, and we're going to help the poor. And it's always he's seen a clearer through line that didn't always match the reality of the impact of a tariff policy.

BASH: Yeah. And it does -- I mean, there's so many implications of this. We talked about the legal implications, the constitutional implications, the political implications, but the political implications are very much related to the question of the economics and affordability. Just a reminder, just yesterday, what the president said in Georgia about affordability.

(BEGIN VIDEO CLIP)

TRUMP: And I have to listen to the fake news, talking about affordability. Affordability. You notice, what word have you not heard over the last two weeks, affordability, because I've won, I've won affordability.

(END VIDEO CLIP)

BASH: I mean, the irony is, maybe the Supreme Court helped him get to that point.

KIM: Well, yeah, maybe. I mean, it's also not the press talking about affordability. It's voters who have said over and over that this is their top concern and this is something that policy makers want to address.

But in terms of this becoming a major political cudgel, remember, earlier this month, there was that, you know, procedural, you know, dust up in the House that effectively allows House Democrats or even pro-trade Republicans to push through all of these, you know, symbolic motions to just to disavow the president's tariffs.

This is a vote that Speaker Johnson and his leadership team and the White House did not want, because it could be a rebuke every day, every week, of different parts of the president's policy. Again, these are mostly symbolic, but this is going to show voters just how much of an opposition there is and how much antagonism there is to the president's tariff policy. It's something that Democrats definitely want to show and highlight this coming year.

PARKER: And then in terms of affordability, right? If you look at some of the nuance behind some of these economic numbers, the economy is kind of solid, kind of strong, but what's revealing is this k-shaped economy, right? This economy, who -- those who are benefiting whom the president relates to, right, billionaires, et cetera. We're seeing a lot of spending at the top, not as much at the bottom. And that's where it's to Seung Min's point where you're hearing some of the pain. Those are the people who are voting right now as well.

KANNO-YOUNGS: You know, and also, we talked about the president is going to pursue alternatives here. When it came to these tariffs, he invoked emergency authority. He just did it. For any of those alternatives we talked about, you will need investigations, reports as well. You need to justify the use their steps he's going to need to take. So, this won't be an easy path moving forward.

WILLIAMS: Summertime limited too. They can only be for 150 days or whatever else.

BASH: We're going to sneak in a quick break. Again, coming up. We are expected to hear from President Trump after this big rebuke by the Supreme Court, including two justices who he picked, and the Senate confirmed they struck down his sweeping tariffs. More on the fallout and more on what this majority opinion says. Paula is going to give us more of that when we come back.

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