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Supreme Court Rule 6-3 That Trump's Tariffs Are Illegal. Aired 11-11:30a ET

Aired February 20, 2026 - 11:00   ET

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

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[11:00:19]

PAMELA BROWN, CNN ANCHOR: Back to our breaking news. The Supreme Court is striking down President Trump's emergency tariffs, calling them illegal and a major setback for his economic agenda.

WOLF BLITZER, CNN ANCHOR: And the Department of Homeland Security's new directive to ramp up investigations into voter fraud.

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.

And we begin this hour with truly historic breaking news. The United States Supreme Court ruling that President Trump's emergency tariffs are, in the words of the Supreme Court, illegal.

The decision is arguably the most significant loss the second Trump administration has had under the conservative court. President Trump calls it, and I'm quoting him now, a disgrace.

BROWN: And he also says he has a backup plan. We'll wait to see what that is. Chief Justice John Roberts wrote the majority opinion stating, "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.

BLITZER: CNN's chief legal affairs correspondent, Paula Reid, has been going through this lengthy document, has all the details. So what happens with the money the administration has already collected, Paula, billions and billions of dollars? What happens to all that money that the U.S. collected from these tariffs?

PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: And that is the question right now, Wolf, because not only is this a rare loss for President Trump before the six-three conservative court, it has not only implications for his presidential powers, but also for the global economy. And in his dissent, Justice Kavanaugh acknowledges that this opinion really doesn't give specifics on how exactly they are supposed to refund that money that's already been collected. He writes, "Nothing today in this opinion about whether and if so how the government should go about returning the billions of dollars that is collected from importers." The justices knew this would be an issue. This came up at arguments.

Obviously, if they strike down these tariffs, the administration is faced with this logistical challenge of issuing these refunds. It is expected that this will have to be decided by the lower courts. And Kavanaugh predicts in his dissent that this process will likely be a, "mess."

BROWN: All right. Well, on that note, I'm going to go to Joan Biskupic, who was right inside the Supreme Court when this came out. I mean, this is the most significant opinion to date of the high court. And there was, as you put it, 10 minutes of high drama.

JOAN BISKUPIC, CNN SENIOR SUPREME COURT ANALYST: It was. You know, the chief comes out, and this is the first time they've all been together for a month. Comes out with his eight associate justices, sits down, and he says, I have the opinion to announce in this case. And you could feel that he kind of wanted to take down the drama, but it could not help but permeate the room.

Sitting right in front of him was Solicitor General John Sauer, the man who argued this case for Donald Trump and argued it with the same sort of aggressiveness that Donald Trump talks about on policy. He was talking about legal terms. You know, this definitely should be a power of the President.

Also in the room, coincidentally, happened to be Neal Katyal, who had argued for one of the challengers. He was there on other business, you know, but also obviously hoping that we could finally hear what the court said about this challenged policy. The chief, it was a classic chief opinion in these three ways.

First of all, a real separation of powers issue here. Who has the authority to tax? And that's what tariffs are. He noted tariffs are taxes. That is congressional authority and Congress's alone. He stressed that. He also stressed that in the past, that same court has had struck down initiatives of President Joe Biden that violated what a doctrine they're calling the major questions doctrine that holds that if you're going to do something major in policy, economic or monetary, Congress needs to have written a law that is absolutely clear that the President has this authority.

And he said there was no clear authorization here, just as we said for President Biden in cases involving, for example, the student loan rollback and environmental protection issues that just like we did for our past president, we're doing for this president, Donald Trump. He also went to his go to justice, the great Chief Justice John Marshall, to say to kind of cite important, important guardrails between the two branches, Pam.

BROWN: Yes. You know, we were talking earlier, Joan, you said this could be a case where Chief Justice Roberts was looking to say no to the President's power. We all remember the immunity case that brought a lot of scrutiny on the justices, right? And then, of course, I believe it was last year at the State of the Union, President Trump walked up to Chief Justice Roberts and I'm sure he was horrified and said, thank you.

[11:05:14]

BISKUPIC: Thank you very much. Yes.

BROWN: You know, a lot of people read into that in however way they wanted to. In light of that opinion, in this case, you not only have Chief Justice Roberts signing on with the liberals saying that the President violated the law with these tariffs, but you have two of the President's appointed justices to the high court.

BISKUPIC: That's right. Neil Gorsuch, his very first appointee in his first term, and Amy Coney Barrett, who has made such a difference on this court. And they were also with the chief on this majority opinion, essentially saying we cannot this. This -- what President Trump had tried to do here was just went just too far. The President has some authority in the tariff area, but he cannot go it alone. And that's what he tried to do here.

And Neil Gorsuch specifically had said during oral arguments, or at least suggested during oral arguments, and then he reinforced in this concurrence that Congress has this authority and if Congress is allowed to cede that authority, it will never get it back. And the court did not want to be party to that.

BROWN: It's so interesting. As David Sanger said, it seems like the court in this case is more concerned about Congress and separation of powers than some members of Congress.

All right. Let's bring in Natasha Sarin, who served as a former counselor to Treasury Secretary Janet Yellen during the Biden administration. Natasha, a big question here is what this means for the American consumer. You have this dynamic where a lot of tariffs are now going to be rolled back because the high court found them illegal under this law.

But there were other tariffs being implemented under other presidential authorities. And now you have President Trump saying he has a backup plan. What do you think? Is this a win for consumers' wallets?

NATASHA SARIN, FORMER COUNSELOR TO TREASURY SECRETARY JANET YELLEN: I think it's very unlikely that in the long term we're going to see this as being a win for consumers' wallets for two reasons. One is that so far consumers have paid in something like $150 billion in the form of these tariffs that were just ruled unlawful. But there's no guidance in this opinion about exactly what's supposed to happen with those refunds.

And even if refunds are ultimately issued, they're not going to be issued to consumers. They're going to be issued to firms. And then you're, depending on firms, ultimately passing those back to the consumer. And the other piece of this is that, and you started to see it laid out by Justice Kavanaugh in his dissent, there are a whole host of other authorities that this administration is going to turn to, to try to effectuate exactly these same tariff rates on exactly these same countries.

And so although I think there's going to be a fair degree of volatility and uncertainty between now and when you ultimately see those ideas effectuated, and I think it's incredibly good for the rule of law that we're in a place where the court has been very clear that the power to tax and spend is Congress and Congress is alone, I think there's a lot of volatility and uncertainty that make me suspicious that consumers are going to see real gains from this decision in the short run.

BLITZER: Yes. One of the justices said it's going to be a mess right now. We'll see how it unfolds. Stand by. I want to bring in our senior legal analyst, Elie Honig, into this conversation. Elie, in his dissent, Justice Kavanaugh wrote about how any potential refund process, as I said, if there is one, would be a mess, his word, a mess. I'm curious what you make of that assessment.

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Well, he's certainly right that it will be a mess, Wolf. And I think the way this is likely to play out is we will see a raft of lawsuits from American-based importers who've had to pay tariffs over the last eight, nine months since Trump imposed them. In fact, the name plaintiff in this case is a midsize company that imports toys and educational devices from overseas. So I think you're going to see a bunch of companies like that file lawsuits.

They're going to have to start off in the district courts, work their way up through the courts of appeals. But this thing could well end up back at the U.S. Supreme Court to decide whether those refunds have to be paid from the U.S. government back to the importers who paid them in the first place. And as we said earlier, we're talking about over $200 billion that have already been paid into the U.S. Treasury. So the stakes of what I expect will be a round two of litigation here are going to be massive.

[11:09:16]

BLITZER: Yes, totally enormous indeed. Elie Honig, standby. Natasha Sarin, thank you very much, Joan Biskupic, Paula Reid. We're going to have much more. I don't want any of you to leave. Much more reaction coming in, including more reaction coming in from the White House. Standby. We'll take a quick break.

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BROWN: All right, let's go live now to CNN senior White House correspondent Kristen Holmes with a reaction to the Supreme Court decision on tariffs. Kristen, what are you hearing from the Trump administration about this?

KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, Pamela, we still have no official reaction from the White House or President Trump. We are waiting. I am told that they are meeting discussing how they are going to respond. But we have learned more about what happened in the room when President Trump was with those governors and he learned of the Supreme Court decision. Apparently the breakfast had been going well. They were working together.

And then President Trump became enraged. He started ranting about the decision. Not only calling it a disgrace, but started attacking the courts. At one point saying these effing courts, but using the actual language there. We know that President Trump does use expletives on quite often when he is enraged in particular.

[11:15:01]

Now, this, of course, comes as this tariff policy. This could not be a bigger decision for President Trump. This could not be a bigger loss for President Trump. Not only is so much of his economic agenda based on these tariffs, so much of his foreign policy is based on these tariffs. He has used these tariffs as leverage in almost every meeting that he has had around the world. He has touted them as the most important part of the economic agenda. So, clearly, a huge loss and he recognizes that today. Pamela?

BROWN: All right, Kristen Holmes. Very good point. Live for us from the White House. Thanks so much. Wolf?

BLITZER: Lots going on. I want to discuss what's going on with CNN's senior political and global affairs commentator, Rahm Emanuel. He previously served as President Biden's U.S. ambassador to Japan. He was mayor of Chicago, a member of the House of Representatives, and the White House chief of staff during the Obama administration.

So, Rahm, thanks very much for joining us. First of all, what do you make of this historic decision today by the U.S. Supreme Court ruling that Trump's tariffs are illegal?

RAHM EMANUEL, CNN SENIOR POLITICAL AND GLOBAL AFFAIRS COMMENTATOR: Well, I mean, the first thing is I look at it from a political standpoint. The President is down in the polling numbers on the economy, really way down, and now he's going to go fight for something that the American people think is very unpopular because they see it as directly affecting their pocketbook and raising inflation.

So he's going to continue to fight for something and continue to drive his polling numbers on the economy, which is the focus of this election, further down. Second, it's in the context, just think of this week. Consumer confidence is at a decade low.

The GDP numbers just came out showing the economy sputtered in the back end of 2025, his first full year. Third, you had the deficit numbers come out that showed historic highs. So the central kind of context of the election around the economy and central about the economy is very poor, and now the President is going to double down on something the American people clearly don't want, and he's dependent on a Congress who's proven they can actually not perform.

They put the do-nothing Congress to shame because they have done nothing. So I really think this is the worst politics, let alone on the policy. It's really bad politics for him.

BLITZER: And the latest numbers just out today, I was just going to say, Rahm, the latest numbers just out today show that inflation now, and these are the numbers that were just released, inflation here in the United States is at a 21-month high right now. How's that going to impact the midterm elections coming up in November?

EMANUEL: Well, Wolf, I mean, I don't want to say this, but we all told you so. You can't do what he's doing, increasing tariffs and increase inflation. Now you've got that result. Kicking people out of the country randomly rather than the criminal elements is going to drive also an anemic economy. They have done a series of things that were all going to lead to this result, and now economic data is coming in showing exactly what people told the administration 14 months ago, don't raise tariffs the way you're doing it.

You're going to put an inflationary cost on the economy. You see the results there. Second, the economy is going to sputter down to basically flat-lined, which is what's happening. Consumer confidence, which is the driver of our economy, is really in the tank. And the President of the United States, as for the Republicans, and not that I'm going to give him advice, can't keep a message on the economy. He says, I solved affordability. Well, that will be breaking news to the hard-working American families that he has solved something they're struggling with every day.

BLITZER: Yes, pretty negative economic numbers. Yes, go ahead.

EMANUEL: Yes. The only thing I will say is yesterday in Georgia, I suppose the President called himself a schmuck, and I'm like, well, finally we agree on something because right now the jury's verdict is coming in, and everything that he has done on the economy, let alone the instrument of the tariffs on foreign policy, has basically turned out, the Supreme Court said, you can't do this.

This is going to be really a gauntlet down on the Congress, which has done nothing to actually show up and finally earn their paycheck and actually do something on the economy because this was -- they have been complicit in this role, the Republican Congress.

BLITZER: Yes, from the President's standpoint, not exactly a great way to set the scene for his State of the Union address before a joint session of Congress Tuesday night. The Supreme Court decision and the latest pretty brutal economic numbers just released this morning. Rahm, thank you very, very much. We'll continue this conversation, to be sure, down the road.

[11:19:33]

And coming up here in The Situation Room, we're going to get reaction from a Canadian leader about this major breaking news, the U.S. Supreme Court ruling that Trump's tariffs, including on Canada, presumably, are illegal. Stay with us. Much more coming up.

(COMMERCIAL BREAK) BROWN: All right, more now on the breaking news. The Supreme Court ruling that President Trump's sweeping tariffs are illegal. Let's go straight to CNN's Paula Newton. Paula, you cover Canada for us. How are officials reacting right now to this?

PAULA NEWTON, CNN CORRESPONDENT: Yes, well, Pamela, you'll excuse Canadian businesses that are not dancing in the street at this position. As I've said before, while this is certainly a blow to the Trump administration's efforts on trade, this might be a roadblock that the Supreme Court has put in. Canada is ready that the Trump administration may even come back with a tank to try and get through those as well. Everyone is in position to see what happens next.

Now, I do have some Canadian reaction here. The Trade Minister Dominic LeBlanc saying that although Canada has concluded the best trade agreement with the United States among all its trading partners, we recognize that there is still much to be done to support businesses and workers. Pam, I want to point out that that trade agreement between Mexico, Canada partners, we recognize that there is still much to be done to support businesses and workers.

[11:25:05]

Pam, I want to point out that that trade agreement between Mexico, Canada and the United States up for review this year, that is the negotiation that everyone is looking towards. And more than that, Pamela, these emergency tariffs that the Supreme Court essentially knocked down do not really get to the heart of the sectoral tariffs, those on steel, those on aluminum, those on lumber, that still are imposed on Canada and, by the way, represent a fairly significant tax for American consumers.

Those are the so-called sectoral tariffs that Canada will be working to at least get a reduction or even get them eliminated. So, as I said, a good day for Canada in terms of trying to go to the table with a stronger hand in negotiations, but this isn't over by a long shot.

BROWN: It certainly isn't. The bottom line is, according to our numbers, the administration raked in hundreds of billion dollars in tariff revenue, right? A lot of that came from American businesses, but some businesses, like in Canada and other countries that were heavily tariffed, would absorb some of the higher costs, right? Is there any indication what those businesses might do in Canada, whether lawsuits will be coming on this?

NEWTON: They can certainly file those lawsuits, add to those lawsuits, if they are incorporated in the United States, but right now they haven't made those kinds of moves, and again, when you look at the significance of the tariffs themselves, they fall under this other section, and so they're going to try and work towards those. I think what's highly significant here, Pamela, is that it's going to be a mess.

The Supreme Court didn't offer a remedy to American businesses, Mexican businesses, or Canadian businesses. In terms of what happens, that's all to be determined in lower courts, and we'll see how much more court action comes forward, given the Supreme Court decision.

BROWN: We certainly will. Paula Newton, thank you so much. Wolf?

BLITZER: All right, Pamela, I want to continue the conversation right now. Joining us, a special guest, Jean Charest, is the former Deputy Prime Minister of Canada, the former Premier of Quebec. Jean Charest, thanks so much for joining us. President Trump recently threatened to impose what he said would be a 100 percent tariff on Canada if it makes a trade deal with China. Does this ruling today by the U.S. Supreme Court take the teeth out of any of Trump's tariff threats, including raising these tariffs against Canada?

JEAN CHAREST, FORMER CANADIAN DEPUTY PRIME MINISTER: It weakens the position of the administration, if only because it makes the point that the tariffs are a competency of the Congress and the House, and not the executive, who used emergency powers that now have been invalidated. That being said, Wolf, 85 percent to 90 percent of all the goods that go back and forth between Canada and the United States are covered under the previous trade agreement negotiated by Donald Trump, called CUSMA, and there is no tariffs on that.

And there are special tariffs that are not affected by this decision today by the Supreme Court of the United States on steel, aluminum, on cars, on softwood lumber, that will continue to be in place and are very damaging to our industry, but also very damaging to the American economy. The good news today is for American consumers, frankly.

I mean, the recent study, I think, of the Fed and another study indicated that they're paying, American consumers paid at least $1,000 more in taxes through tariffs in the last year, in 2025, and in 2026 they're scheduled, if this were to continue, to pay $1,300 more in taxes. And so it's good news for them, and all of this will, you know, bring some pressure on the American administration to look at tariffs in a different way, and hopefully to renegotiate this trade agreement that we have that has been very, very good for both countries.

BLITZER: Related to all of this, are the tariffs and the other threats made on Canada by the Trump administration, and there have been many over these past months, is that what drove Canada closer to China in the first place, this new trade agreement that Canada has with China?

CHAREST: Well, the consequence of the threat of tariffs is that Canada is looking at diversifying its trade relationships and which every other country that deals with the United States is doing right now. Now, we have not done a free trade deal with China. Canada will not do a free trade deal with China. We will do sectoral agreements in very specific sectors, like farming, canola, the Americans do, by the way, Wolf. Or in the automotive sector, we've done something modest by allowing 45 -- 49,000 cars to come in, electric cars at a 6.1 tariff.

[11:29:50]

But that's not a trade deal. What it is, it's an effort to diversify towards other markets with whom we want to work because we want to be less dependent on the American economy, which, by the way, is true for everyone, whether you're Europe, Japan or South Korea, any other country in the world.