Return to Transcripts main page

The Situation Room

Now, Trump Hosting Governors at White House for Annual Meeting; Supreme Court Rules That Trump's Sweeping Emergency Tariffs are Illegal; Supreme Court Strikes Down Trump's Tariffs in 6-3 Vote. Aired 10-10:30a ET

Aired February 20, 2026 - 10:00   ET

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

(COMMERCIAL BREAK)

[10:00:00]

PAMELA BROWN, CNN ANCHOR: Happening now, breaking news, media kicked out, President Trump telling reporters and cameras to leave a breakfast with governors. What's usually a bipartisan event has become a political showdown.

Plus, active search police at Andrew Mountbatten-Windsor's former home this morning. Investigators laser focused as the former prince is released from custody. We are live right outside of Buckingham Palace.

WOLF BLITZER, CNN ANCHOR: And happening now, President Trump's ultimatum to Iran, will there be a deal before his deadline?

And decision day at the U.S. Supreme Court on cases including emergency tariffs and birthright citizenship, we're standing by for developments.

Welcome to our viewers here in the United States and around the world. I'm Wolf Blitzer with Pamela Brown. And you're in The Situation Room.

Right now, President Trump is hosting governors from across the country, but he broke with tradition when he officially revoked invitations to two Democratic governors for Saturday's dinner, Wes Moore of Maryland and Jared Polis of Colorado. They decided to attend this morning's breakfast. The National Governors Association had said it would no longer help with participation, while other Democrats said they would skip the gathering in protest. Here's what the Kentucky governor, Andy Beshear, told us yesterday.

(BEGIN VIDEO CLIP)

GOV. ANDY BESHEAR (D-KY): The president has turned what was a bipartisan tradition into a 12-year-old's birthday party, you're invited, you're not invited, and creating so much drama around it. In the end, Wes Moore and Jared Polis are friends of mine. Wes Moore's the only black governor in the entire United States. If they're not invited, I'm not going. I stand with my friends.

(END VIDEO CLIP) BLITZER: President Trump only moments ago just kicked things off by kicking out the news media. Listen to this.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: We're going to be asking the press to leave, and that way we're going to talk very candidly and take questions.

Thank you very much for being here. It's a great honor. And the media, thank you, you can leave now.

(END VIDEO CLIP)

BLITZER: Let's go to our CNN Senior White House reporter Kevin Liptak. Kevin, I spent seven years as a White House correspondent for CNN. I don't remember a time when the White House officially opens up a meeting like this to the news media, invites reporters, camera crews to come in, but then the president of the United States goes ahead and kicks them all out. How extraordinary is this?

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: You know, President Trump is quite unpredictable. And, certainly, I think there is a sense that perhaps he wanted to keep whatever disagreements he has with the governors who are there up on the state floor of the White House behind closed doors.

And it is a difference, at least from what we saw last year. And you'll remember at this very meeting one year ago, that was when the president got into that very heated back and forth with the Democratic governor of Maine, Janet Mills. You know, they were going back and forth about the president's executive order to withhold federal funding from states due to transgender participation in sports. And she uttered, you know, what became quite famous words at the time that she would see him in court.

So, if one of those interactions occurs today, I think the White House and President Trump sort of gambled that it was better to keep those private. And even heading into this meeting, it was pretty evident that there was going to be contention. You know, the president, at one point, had declined to invite two Democratic governors, Jared Polis from Colorado, Wes Moore from Maryland. When it came to Polis, the president is disputing Colorado's detention of Lisa Peters, who is an election denier. She was an election worker in that state.

BROWN: We're interrupting Kevin at the White House because we have breaking news from the Supreme Court. It has reached a major decision.

CNN Chief Legal Affairs Correspondent Paula Reid has the details. What's this case about Paula?

PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: This is one of the most significant cases that the justices have decided in recent years here.

[10:05:04] The Supreme Court ruling that President Trump's use of these emergency tariffs that he has implemented are illegal. It's the most significant economic case to reach the high court in years, sweeping implications for the economy and, of course, for presidential power. And at stake here are billions of dollars in revenue that have already been collected by the government.

Pamela, Wolf, the other significance here is that this is the first time that the 6-3 conservative court has ruled against President Trump in one of these major cases that have gone before the court since he returned to power in January.

Now, we are still going through this case but this is something we have been waiting for. The court said that it would take up this case on an expedited basis. So, they're deciding even though it's a significant case now, because of course this has enormous invocations.

So, as we go through this opinion now with our team, another outstanding question is what now happens to all that revenue that had been collected. This is something -- it really wasn't clear from the arguments what they would say about that if they're going to lay out a plan, so we will continue to go through this. But this is an, an enormous decision and a rare loss for President Trump before this conservative court.

BLITZER: This is, Paula, a major slap at the president of the United States who has made a major effort over these many, many months to impose all of these tariffs. And just to do, look at some of the background I have here, over these many months, the administration has collected $150 billion in these tariffs. So, what happens to that money? Do they have to refund that money to the firms, to the people who paid for those tariffs?

REID: That's one of the big questions that came up at arguments, and it's something that we are looking through now in this opinion. The top line is that these are illegal, that the president cannot rely on this 1977 emergency law to impose tariffs without authorization from Congress, because this question is really about the extent of presidential power.

And we know in both his terms in office, President Trump has really worked at the edges of what has largely been recognized as executive authority. But in these arguments back in November, they went on for two and a half hours, it was clear that the justices were skeptical that President Trump could rely on this vague federal law to impose global tariffs.

Now, they did appear to likely be willing to decide that these were illegal. But what is not clear, and we haven't gotten to this part of the opinion, is what happens to all that revenue that has been collected by the government. And President Trump has said himself that this is -- you know, this is a massive decision for him. So, we're waiting for reaction both from the Justice Department that argued this on his behalf and also from the White House.

But we're going to keep going through this, Wolf, to try to see if the justices laid out any plan for what happens to that revenue.

BLITZER: All right. Paula, stand by. I know you're going to be reading all these opinions and everything. I want to get back to you, but I want to bring in our Senior Legal Analyst Elie Honig right now. Elie, as I said, this is a huge setback for the president of the United States, and this has been a traditionally conservative Supreme Court, but they ruled that all of these tariffs that Trump has imposed over these many months are illegal. It's a big deal.

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Well, Wolf, it's a monumental ruling, and the bottom line is that the tariffs Donald Trump announced back in April on Liberation Day are gone. They have been ruled illegal by this U.S. Supreme Court. An interesting array of justices here, in the majority ruling that the tariffs are illegal is Chief Justice Roberts, Justice Gorsuch and Justice Amy Coney Barrett, three conservatives who teamed up with the three liberal justices, Sotomayor, Kagan and Jackson, to rule these tariffs unconstitutional. The dissenters are Justices Thomas, Alito and Kavanaugh. And the basis for the ruling is this Congress, not the president, Congress typically holds the tariff power.

Now, Congress passed this law back in 1977 called the International Economic Emergencies Act, and Donald Trump tried to use that law to say, well, I'm declaring an international economic emergency, therefore I'm imposing tariffs. But the majority here said no. That law does not authorize you to impose tariffs. And, no, there is not a valid international economic emergency here. So, the end result, and we are still going through this, but the end result is that Donald Trump's tariffs have been struck down by the U.S. Supreme Court.

But really important point I want to make, Donald Trump has said, various White House officials have said if he loses on this basis, he will try to re-implement other tariffs through other laws, which he can try to do. However, those other laws are much more restrictive. They would not allow him to apply the type of sweeping, massive, across the globe tariffs that he tried to impose here, but have now been struck down.

Look, Donald Trump said these tariffs are the single most important thing he has done in his presidency. He said that, and now they've been struck down by the court.

BROWN: So, you're right, the administration has made clear that if the court strikes this down, that they'll look at other tariff authorities to use. But bottom line here, Elie, how big of a mess does this ruling create given the fact that the administration says it has already received $150 billion in revenue, largely paid for by American businesses?

[10:10:11]

Do they get a refund? What happens now?

HONIG: Yes. So, it's hard to think of a case that has broader implications politically and legally and economically than in this one. I know a lot of people are watching for this one. We don't yet have the answer.

This was a question that came up during the oral argument. Amy Coney Barrett in particular asked the lawyers, well, what do we do with the a hundred plus billion dollars that have already been paid by American importers, by American manufacturers?

We're going to look carefully at this. I know Paula is reading this very carefully, but that's a huge question. Will there be some sort of mass refund program? Will the court rule that the tariffs are dead from here on out, but there are no repayments? We will let you know as soon as we get an answer to that one.

BROWN: All right. As you noted, Paula has been reading through the opinion. I want to go back to Paula Reid because we know that three conservatives sided with the liberals on the court and you have a quote from one of those conservatives, right, Paula?

REID: That's right. Well, this is Chief Justice John Roberts, who wrote the majority opinion where the court agreed 6-3 that President Trump's tariffs exceed his power under the law. He wrote, 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. And we knew that the chief justice would be a key vote after what we saw at arguments.

Now, we are still going through this. I want to show you, this is about a third of the opinion. It's 170 pages long. This is just a fraction of it. So, we're going through it very carefully to try to understand what, if anything, the court said about what happened to all that revenue the government has already collected. I know that's a big question right now. We are carefully going through this to see if they laid out a plan, if this goes back to the lower courts, that's what we're working figure out right now.

BLITZER: And a quick question from me, Paula. Do the tariffs immediately go away as of right now, or does it take a few days or at least maybe a few weeks for them to be removed?

REID: Well, they've been declared by the Supreme Court to be illegal. So, we're going through to see if they laid out some sort of plan. But as of right now, people should not have to pay a tariff today or tomorrow, one would think. But we're looking to see, because the logistics of this are so complicated to see if the justices waited into that, or if all of that is going to be something that's now going to be tossed down to lower courts, now that the justices have ruled on the larger constitutional question here, the separation sort of a powers and who has the authority to do this, right, because while this has enormous economic implications, really, this was a question about the extent of executive power.

We know President Trump really plays at the edges of that, and, again, this is a rare loss for President Trump since he has returned to office before this conservative court. So, we're going to keep wading through what they said to work out the details. BROWN: All right, Paula, I will let you continue to read through that.

I want to bring in our Chief National Affairs Correspondent, Jeff, because this is a ruling that has implications for the everyday American, anyone who buys goods, right, especially those imported from overseas. How are you looking at this from a political perspective, especially as you look at those Republicans running ahead of the midterms?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: It's such a great question, Pamela, because, yes, this is the biggest legal setback for President Trump, who, in his first year in office, has -- really, one through line has been just expanding his executive authority. I remember back on the day of Liberation Day, he called it. He used the International Emergency Powers Act, IEEPA to say that that a tariffs must be imposed. The court is saying the President does not have the authority to do that.

It is the biggest defeat, there's no doubt, but tariffs have also been hanging over this White House in a kind of mixed way for the politics of it all. Many Republicans who are running in these midterm elections, I think Mike Rogers are running for Senate in Michigan, has been worried about defending the president's tariff policy. So, this ruling right now to make it illegal could offer some Republicans relief in the sense that they would not have to defend this tariffs policy.

But it is a huge setback for the White House. The president, even yesterday, he was campaigning in Georgia, talked about how tariffs are his favorite word in the English language. He loves the idea of tariffs. But the trade deficit has not gone down. We saw that report yesterday as well.

So, politically speaking, this is a huge blow for the president, but there could be a silver lining in it for some Republican candidates out in America running in the midterm elections who do not have to defend this tariff policy. So, that is one of the sort of ironic pieces of a fallout here.

But without a doubt, the White House is going to be sort of furious by this 6-3 ruling. This is a conservative Supreme Court, and Amy Coney Barrett --

BLITZER: Two of them are conservatives that he appointed, ruled in favor with the liberals.

ZELENY: Exactly. And Amy Coney Barrett, I'm thinking of her. I mean, she already has been under fire for many rulings by the MAGA, right, if you will.

[10:15:02]

So, as we read through this ruling, that is certainly going to be one of the justices will be taking a look at.

But bottom line, huge blow for the president but potential silver lining for some Republicans out there.

BLITZER: And potentially the economic implications are enormous right now.

I want to go to our Senior Reporter Matt Egan, who's following the economic ramifications of this historic move by the U.S. Supreme Court of 6-3 decision, the ruling that Trump's tariffs are illegal, important word, illegal.

Matt Egan, what are the economic business ramifications will all those tariffs that are imposed, let's say on Canada, China, European allies simply immediately go away?

MATT EGAN, CNN SENIOR REPORTER: Well, look, Wolf, this is a gut punch to the White House on a signature issue, right? The president has become almost synonymous with tariffs, more than any other president in modern history, he's used this shock and awe strategy of blanketing the world with historically high tariffs.

So, this is definitely a setback. As Jeff was saying, this is likely the biggest economic setback to the Trump agenda to-date. And, importantly, this will limit the president's ability to slap tariffs on imports on an unchecked basis by citing emergency powers.

However, this is not a fatal blow to his tariff regime all together, because some tariffs, like the ones on steel and aluminum and copper, they relied on different emergency power. So, those are likely not impacted. Those are likely not changing based on this decision.

Now, the White House has said that they had backup plans already in the works. This decision was not a shock, and investors, economists, many people on Wall Street had been anticipating that the Supreme Court was going to strike this down. And so the White House has had weeks, if not months, to try to prepare other tariff authorities that they can rely on to try to impose tariffs once again.

Now, those other authorities, they come with more restrictions in terms of the size and scope and the timing of tariffs. But a lot of economists, they do suspect that the overall tariff rate, it may not change all that much.

Now, one of the really important economic factors here is what the Supreme Court says, if anything, about refunds. Because the president's tariffs, they have in fact collected, they've generated hundreds of billions of dollars of tariff revenue. And if the government were forced to refund all of those tariffs, that would cause a significant budget impact and issue, and that could actually drive up bond yields.

But our teams are still reviewing this order. This is 170-page decision, so it's going to take some time to figure out exactly what happens on the refund front. But looking at how the markets have reacted, they've been kind of all over the place. U.S. stocks were solidly in the green earlier. The Dow has moved a little bit lower, but not dramatically lower as investors, like the rest of us, are still sorting through exactly what all of this means. But, clearly, it is a significant economic setback for this White House.

BROWN: All right. Matt Egan, thank you so much.

And according to our very thorough right online about the tariffs and how much has been collected through them, the total collected is actually $292 billion collected during Trump's second term.

So, I want to go now back to Paula Reid because this big question is what happens now with all this money that these businesses have paid for these tariffs.

REID: That is the question right now, Pamela. And we believe we have an answer from Justice Kavanaugh. He said, quote, it is going to be a mess because the court here offered no clarity on this specific practical question of what to do with the money the administration has already collected through the president's tariffs. This will likely need to be sorted out now by lower courts.

And this is something that Justice Kavanaugh really focused on in his dissent. He noted that, quote, the court said nothing today about whether and, if so, how the government should go about returning the billions of dollars that it has collected from importers. And this issue, of course, loomed large over this case. It came up during arguments, and the Trump administration, they have said that potential repayments could have devastating consequences for the U.S. economy. So, in his dissent Kavanaugh said, quote, that process is likely going to be a mess.

So, while today the court has given us an answer on the limits of President Trump's power, what we don't have and what will continue to have to be litigated is this question of what happens to all that money. That is, again, to quote the justice, going to be a mess.

BLITZER: Certainly, it looks like it's going to be a mess. And it comes on a day -- And I want to go back to Matt Egan if he's still with us, if he's still with us. Matt, this comes on the same day that new economic numbers were just released, pretty dismal numbers, depressing numbers on the economy and inflation, right?

EGAN: Yes, that's right, Wolf. We did get new numbers out this morning on gross domestic product, GDP.

[10:20:01]

It's the widest measure of economic growth in the United States. We were bracing for a slowdown during the fourth quarter, and it was a bigger slowdown than anticipated, GDP coming in at 1.4 percent on an annualized basis. That's a pretty significant slowdown from 4.4 percent in the third quarter.

However, we do need a bit of an asterisk for that because this slowdown was largely driven by Washington. In particular, we're talking about the government shutdown last year. It was the longest government shutdown in U.S. history. And the Bureau of Economic Analysis says that it wiped out about one percentage point of GDP growth. Meaning instead of 1.4, it probably should have been 2.4 percent growth.

And the good news is that history shows that GDP that's lost because of a government shutdown, it is almost fully recovered during the next quarter. So, that means that we should see a bounce back during this quarter in GDP because that government shutdown was over, the government spending and investment that was sidelined, it will return.

But still, when you look at the overall outlook for GDP, last year, it was a weaker year. The president has argued that 2024 was an economic disaster that he inherited, a mess, but GDP was actually stronger in 2024 than it was in 2025. But, again, a lot of that has to do with the government shutdown.

And just one other point for you, and this is relevant to tariffs and the Supreme Court ruling is the Federal Reserve's go-to inflation metric, it came out this morning as well for the month of December, and it showed that inflation heated up in December to a 21-month high, the highest level since March of 2024. And, notably, one of the drivers on that was the fact that prices on goods increased significantly. And we know that the president's tariffs have lifted the prices for toys, appliances, and other goods as well, and so that does appear to have been a factor in why the inflation rate has moved in the wrong direction.

Back to you.

BLITZER: Yes. Bad numbers today released coming on the heels of a major, major defeat for the president of the United States when the U.S. Supreme Court ruled 6-3, that the tariffs he has imposed over these many months in his second term as president of the United States are illegal, illegal.

Rana Foroohar is taking a look at the international implications of all of this. We know Trump imposed significant tariffs on all these countries, including friendly countries, like Canada and the European allies, not just China, for example. What's going to be the international impact of this decision?

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Oh boy, hang on to your hat, Wolf, because we are in for months, if not years, now of legal wrangling. You know, just start with the immediate impact, you're going to see a lot of businesses, a lot of countries saying, hey, we want our money back. There's going to be a raft of lawsuits at multiple levels of folks, you know, different entities, countries and companies looking to recoup some of the losses from tariffs.

You know, I think that there are second and third tier impacts too. The fact that the Supreme Court, which, you know, many people have accused of being political under this administration, has said, you know what? Trump overreached. You know, this isn't working. This is not constitutional. I think, in some ways, that's a signal of court independence, and that could be taken as a positive thing for the overall political economy in the U.S., but we are just at the beginning of, frankly, a real mess.

And one more thing I'll say, we shouldn't think that the topic of tariffs is now going away somehow, even beyond potential lawsuits, because the president has any number of other ways that he can continue to try and push for tariffs and impact, you know, levies. So, we'll be watching for that.

BROWN: And just to follow up with you, I know this is a little bit messy but not all the tariffs were under this law that the president used for the emergency tariffs that he announced on Liberation Day. So, can you help us sift through which items, whether it's furniture or toys, electronics, may go down now as a result of this ruling and which items we expect to remain higher because of the tariffs used under other authorities?

FOROOHAR: Yes, it's a great question. So, there are, as you say, any number of ways that the president can levy tariffs. During the first Trump term, for example, we saw tariffs on China going up, and that was because the administration was able to use various legal mechanisms to prove that China was not using market practices, that the trading paradigm wasn't fair. You could still see the president going industry by industry, sector by sector, toys, furniture, shoes.

You know, these are things that I think certainly you could still see tariffs happening, tech products, semiconductors, you may still see tariffs, particularly on China because it is a country that you can say pretty clearly, hey, they're not abiding by market practices.

[10:25:01]

I think what you're going to see a pullback on is these blanket tariffs on adversaries and allies alike, which, frankly, a lot of people, most economists, but also a lot of people in the Republican Party and the president's own party have said, we're worried about that. We don't like that. We don't like the idea of ever changing blanket policies on countries as a whole. And so that's what you're going to see big fights about now.

BROWN: All right. A lot to continue to follow because it's not very clear how this is going to play out. We're going to continue to read through the opinion here. We're going to take a quick break and we'll be right back.

(COMMERCIAL BREAK)

[10:30:00]

BLITZER: We're following breaking news, important breaking news.