The Supreme Court’s ruling that the president does not have the authority to impose many of the sweeping tariffs he implemented last year has significant implications for small businesses, which have been disproportionately affected by the tariffs. The ruling has sparked a mix of reactions, with some small businesses welcoming the decision as a relief, while others are concerned about the potential impact on their operations.
The Supreme Court’s decision to limit the president’s tariff power has significant implications for small businesses, which have been disproportionately affected by the tariffs. The ruling, which was issued on February 20, 2026, found that the president does not have the authority to impose many of the sweeping tariffs he implemented last year, a detail confirmed by USA TODAY.
Immediately following the decision, a coalition of 800 small businesses known as “We Pay the Tariffs” published a national sign-on letter calling for “full, fast, and automatic” tariff refunds, as reported by We Pay the Tariffs. The letter highlights the significant burden that the tariffs have placed on small businesses, which have been forced to take out loans, raise prices, or delay investments to pay the tariffs.
Tariffs Hit Small Businesses Differently
Prior to the ruling, some small businesses and larger corporations, including Costco, Revlon, and Goodyear Tires, had already entered the legal arena, hoping to secure their refund rights if the Supreme Court ruled against Trump’s tariffs. However, it’s not a legal fight every business can afford, according to Yahoo Finance.
In 2025, tariffs forced small businesses to make tough decisions. Some limited or ceased operations, while others passed higher costs to consumers, according to Small Business Majority founder and CEO John Arensmeyer. The tariffs have had a disproportionate impact on small businesses, which often have limited resources and are less able to absorb the increased costs.
Why the Ruling Comes ‘Too Late’ for Some
Melkon Khosrovian, a spirits maker and co-founder of Greenbar Distillery in Los Angeles, said he is “excited and still a little hesitant” following the ruling. He said he doesn’t have the resources to file a lawsuit to secure refund rights, but hopes other legal action sets a precedent that will apply to his business, as reported by Yahoo Finance.
Tariffs and Tariff Payments Continue
After the ruling, Trump made clear he will do all he can to implement similar tariffs in other ways. At the press conference, he said he would impose the 10% global tariff using the 1974 Trade Act, which under Section 301, grants the U.S. Trade Representative, under the discretion of the president, the ability to impose tariffs in response to actions by foreign governments that burden or restrict U.S. commerce, as reported by Congress.gov.
While uncertainty persists, the Feb. 20 ruling offers “some semblance of a longer-term vision of what is happening,” according to Jacob Bennett, CEO and co-founder of Crux Analytics, a small business banking platform. Despite all of these changes that have happened, there is still growing positive sentiment across the small business economy, Bennett said.
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