Trump's Judicial Attacks on Tariff Ruling Expose Separation of Powers Crisis

Why it matters: The U.S. Supreme Court, in a 6-3 decision, ruled that President Trump's tariffs based on IEEPA (International Emergency Economic Powers Act) were unconstitutional, overturning a tariff regime exceeding $134 billion. Trump stated, "We have to deal with the courts," openly attacking two justices he himself appointed. As the foundation of the separation of powers is shaken, the market reacted violently with a weaker dollar, a temporary surge in BTC, and higher stocks, entering a phase where trust in the "rule of law" is being tested.

📝 Summary: The U.S. Supreme Court, in a 6-3 decision, ruled that President Trump's tariffs based on IEEPA (International Emergency Economic Powers Act) were unconstitutional, overturning a tariff regime exceeding $134 billion.

What Happened

• Supreme Court Ruling Details — On February 20, 2026, the U.S. Supreme Court issued a 6-3 decision in 'Learning Resources, Inc. v. Trump,' ruling that President Trump's tariffs, invoked under IEEPA (International Emergency Economic Powers Act), were unconstitutional. Chief Justice Roberts authored the majority opinion, joined by Justices Gorsuch and Barrett, both appointed by Trump himself. The Court held that tariff authority rests with Congress under Article I of the Constitution, and IEEPA does not provide a basis for tariffs.
• Trump's Defiant Stance — Immediately after the ruling, Trump, receiving a note during a meeting with state governors at the White House, declared it "a disgrace" and stated, "We have to deal with the courts." In a press conference, he attacked the justices as "unpatriotic and disloyal to the Constitution," and called Gorsuch and Barrett "a shame to their families." He immediately signed an executive order for a 10% global uniform tariff under Section 122 of the Trade Act, rather than IEEPA, announcing its effective date as February 24.
• Market Reaction — The S&P500 rose +0.69%, and Nasdaq +0.9%. BTC temporarily surged above $68,000 but retreated to around $67,000 due to profit-taking. The dollar declined, while gold remained firm. The market digested the ruling itself as "expected," but Trump's judicial attack remarks and the legal sustainability of the alternative tariffs emerged as new uncertainty factors.

Overall Picture

Historical Context

Clashes between the President and the Supreme Court are the most dramatic testing grounds for the separation of powers designed by the U.S. Constitution. Historically, three precedents structurally resonate with the current situation.

In 1832, President Andrew Jackson is said to have told Supreme Court Justice Marshall, regarding the Worcester v. Georgia case concerning Native American rights, "John Marshall has made his decision; now let him enforce it" (though the authenticity of this quote is debated). Jackson effectively ignored the ruling. Notably, Vice President J.D. Vance quoted Jackson's words in a 2021 podcast, and Trump also suggested he should "stand like Jackson before the people."

In 1937, Franklin D. Roosevelt (FDR), facing a Supreme Court that repeatedly struck down New Deal policies as unconstitutional, proposed a "court-packing bill" to add six justices. Public support remained at 39%, and the bill was defeated in Congress. However, the pressure proved effective, and the Supreme Court subsequently shifted to supporting New Deal legislation (the "switch in time that saved nine"). FDR ultimately appointed eight justices during his tenure, changing the direction of the judiciary.

In 1974, President Richard Nixon complied within eight hours with a unanimous Supreme Court ruling ordering him to submit the Watergate tapes. He resigned 16 days later. It was a moment that affirmed the principle that "no one, not even the President, is above the law."

What is unique about this ruling is that Trump was repudiated by two conservative justices he himself appointed (Gorsuch and Barrett). This is proof that judicial independence is functioning, but it also carries the risk of further escalating the conflict as the President perceives himself as "betrayed." CNN reporters have reported that Trump privately fumed, calling it "this damn court." In the history of the separation of powers, a president publicly calling Supreme Court justices "a shame to their families" is an unprecedented event.

Stakeholder Map

Structure Seen in Data

• 6-3 — The Supreme Court's vote count. Three conservative justices (Roberts, Gorsuch, Barrett) joined three liberal justices, with two Trump-appointed justices siding with the majority.
• $134 billion — Total tariffs collected under IEEPA tariffs by December 2025. Over 301,000 importers paid, and the burden was ultimately passed on to consumers.
• $1.5 trillion — Projected revenue over 10 years if tariffs were maintained. This revenue source disappeared due to the ruling, raising concerns about its impact on the fiscal deficit.
• 10% — The alternative tariff rate immediately invoked by Trump under Section 122 of the Trade Act. However, this law provides for a temporary measure of up to 150 days, and extension requires congressional approval.
• +0.69% — The S&P500's rise on the day of the ruling. The market reacted positively to the tariff repeal, but the increase was limited, suggesting the ruling was "priced in."
• $68,000 → $67,000 — BTC's price movement after the ruling. It temporarily rose 2% but retreated due to profit-taking, showing no consistent reaction as "digital gold."
• 150 days — The maximum duration for tariffs under Section 122 of the Trade Act. It will expire in late July 2026, and if Congress does not extend it, the alternative tariffs will also disappear.

Reading Between the Lines — What the News Isn't Saying

While President Trump outwardly advocates for correcting the trade deficit, his true motive is the maximization of presidential power through tariffs and an appeal to his support base. The Supreme Court seeks to protect judicial independence but faces the risk of public trust being shaken by attacks from the President. Congressional Republicans want to avoid internal party division, but the conflict between Trump supporters and free trade advocates is deepening, leaving them in a bind.

NOW PATTERN

Imperial Overreach × Institutional Decay

Imperial Overreach × Institutional Decay

Trump's judicial attacks against the Supreme Court's unconstitutional tariff ruling made visible the institutional friction in the separation of powers and exposed a structure where policy uncertainty itself is being institutionalized as America's new "normal."

Imperial Overreach: "Betrayed by Justices I Appointed" — An Unprecedented Presidential Attack on the Judiciary

President Trump openly attacked Supreme Court justices he himself nominated, calling them "a shame to their families." In the history of the separation of powers, there is no precedent for a sitting president personally attacking justices he appointed.

The Supreme Court's ruling on February 20, 2026, in 'Learning Resources, Inc. v. Trump,' was not merely a trade law precedent but an event that challenged the very governance structure of the United States.

First, let's clarify the legal framework of the ruling. Chief Justice Roberts applied the "major questions doctrine," ruling that IEEPA (International Emergency Economic Powers Act) does not provide a basis for tariffs. This doctrine states that "if Congress wishes to assign an agency decisions of vast economic and political significance, it must do so clearly," and that IEEPA has historically been used for asset freezes and sanctions, not for indefinite tariffs.

Justice Gorsuch's concurring opinion delved into deeper principles. He stated that "the legislative process ensures that each of us has a stake in the laws by which we are governed," emphasizing the importance of congressional legislation. Justice Barrett also clearly concluded that "the most natural reading of IEEPA does not grant the President the power to impose tariffs."

However, even more shocking than the legal content of the ruling was Trump's reaction. In a press conference, he denounced all six majority justices as "a national disgrace," "unpatriotic and disloyal to the Constitution," and personally attacked Gorsuch and Barrett as "a shame to their families." He further questioned the justices' motives, claiming they were "influenced by foreign interests and political forces" without providing specific evidence.

The unusual nature of this attack stands out in historical comparison. FDR clashed with the Supreme Court but sought to counter it through institutional means (increasing the number of justices), not by attacking individual justices. Nixon reluctantly complied with the ruling. Trump's method is a "dual strategy of compliance and attack," where he attacks the very legitimacy of the judiciary, thereby undermining its authority while formally complying with the ruling.

Of note is Justice Kavanaugh's 63-page dissenting opinion. Kavanaugh argued that tariffs are a "traditional and common means of regulating imports" and that IEEPA permits them. He further contended that the "major questions doctrine should not apply to foreign affairs cases." However, Kavanaugh also added that "this ruling may not substantially constrain future presidents' tariff capabilities," suggesting room for tariffs under other legal bases (e.g., Section 301 and Section 232 of the Trade Act). This observation ironically aligns with Trump's immediate action to invoke alternative tariffs under Section 122 of the Trade Act.

Institutional Decay: 150 Days of the Time Bomb——A Structure Where "Uncertainty" Becomes America's New Normal

The ruling declared the tariffs "unconstitutional," but it did not end uncertainty in trade policy. Rather, uncertainty has been institutionalized, and a structure where crisis will return in 150 days has been established.

Immediately after the Supreme Court ruling, Trump signed an executive order for a 10% global uniform tariff under Section 122 of the Trade Act. While this alternative measure is legally valid, it contains three structural constraints.

First, Section 122 permits a "temporary import surcharge" of up to 150 days to address "large and serious balance-of-payments deficits," but an extension requires congressional approval. This means a "time bomb" is set to expire in late July 2026. Congressional Republicans are divided between Trump supporters and free trade advocates, making the success of an extension bill highly uncertain.

Second, Section 122 prohibits discriminatory tariffs based on country. Trump's IEEPA tariffs set country-specific rates, such as 34% for China and 25% for Canada and Mexico, but Section 122 only allows a uniform 10%. The political centerpiece of "punitive" high tariffs on China has been lost. However, country-specific responses can still utilize existing Section 301 tariffs (7.5-25% on Chinese imports, currently applied to approximately $370 billion worth of goods) and Section 232 tariffs (50% on steel and aluminum), meaning there will not be a complete tariff repeal.

Third, the issue of refunding the $134 billion in already collected tariffs arises. Since the Supreme Court ruled them "unconstitutional," importers may file lawsuits seeking refunds. If a full refund is ordered, the fiscal deficit would rapidly expand. With the disappearance of tariff revenues originally projected at $1.5 trillion (over 10 years), the funding structure for the Republican-backed tax cut bill would also fundamentally collapse.

This "institutionalization of uncertainty" creates unique dynamics in financial markets. The S&P500 rose +0.69% on the day of the ruling, but this was merely the digestion of short-term positive news ("tariff repeal = reduced corporate costs"). As Matthew Sigel of VanEck points out, "the disappearance of tariff revenue could accelerate money printing and currency devaluation to cover the fiscal deficit." In this context, BTC and gold could see demand as a "hedge against currency devaluation," but BTC's movement immediately after the ruling (temporarily above $68,000 → returning to $67,000) indicates that the market has not yet fully priced in this structure.

The true uncertainty lies in congressional movements toward the 150-day expiration. Republican Senator Rand Paul welcomed the ruling, stating that "tariff authority lies with Congress," while Representative Buddy Carter reacted negatively, calling it "judicial overreach." Senator McConnell articulated a principled stance, saying, "Congress's role in trade policy is not an inconvenience to be avoided." It is unlikely that this internal party division will be resolved within 150 days.

Intersection of Dynamics

"Imperial Overreach" and "Institutional Decay" form a vicious cycle. The more the Supreme Court limits presidential power, the more Trump attacks the judiciary and attempts to continue tariffs through alternative means. Since the alternative means (Section 122) are temporary, a new political risk of negotiation with Congress arises every 150 days. With Congress divided, the long-term direction of trade policy remains undefined, and uncertainty becomes "the norm." This structural uncertainty progressively erodes confidence in the dollar. For financial markets, this is no longer a simple binary choice of "tariffs or no tariffs," but has transformed into a fundamental question of "trust in the American governance system." The simultaneous reaction of BTC and gold may be a sign that the market has begun to perceive "anxiety about America's institutional stability" rather than merely "dollar devaluation." If this dynamic persists, diversification away from dollar assets could become a structural trend, accelerating the shift of funds into crypto assets, gold, and non-dollar assets.

Pattern History

1937: FDR's Court-Packing Plan and the "Switch in Time That Saved Nine"

In February 1937, Franklin D. Roosevelt, in response to a Supreme Court that repeatedly ruled New Deal policies unconstitutional, proposed a bill allowing him to appoint an additional justice for each justice over 70 years old. The plan was to expand the Supreme Court to 15 members, adding up to six new justices. Public support remained at 39%, and opposition erupted even from his own Democratic Party in Congress. The plan effectively failed in July 1937. However, this pressure proved effective, leading to the "switch in time that saved nine," where conservative Justice Owen Roberts shifted to supporting the New Deal. FDR ultimately appointed a total of eight justices during his tenure, long-term altering the direction of the judiciary. This is an example where a combination of institutional counter-measures (the court-packing bill) and political pressure achieved results while avoiding direct confrontation.

Structural similarities with the present case: While FDR countered "within the system," Trump is countering "on the periphery of the system" through personal attacks on individual justices and the immediate invocation of alternative legal grounds. Both cases share the same structure of presidential backlash against Supreme Court intervention in economic policy, but the nature of their countermeasures fundamentally differs. FDR's pressure functioned as a "deterrent," prompting a change in the Supreme Court's stance, whereas Trump's attacks carry the risk of undermining the very legitimacy of the judiciary.

1974: United States v. Nixon——The Day "No One, Not Even the President, Is Above the Law" Was Affirmed

On July 24, 1974, the Supreme Court unanimously (8-0, Justice Rehnquist recused) ordered President Nixon, who had refused to submit audio tapes related to the Watergate scandal, to do so. It was symbolic that Chief Justice Burger, appointed by Nixon himself, authored the majority opinion. The Court ruled that executive privilege is not "absolute" and must yield to the need for evidence in criminal prosecutions. Nixon agreed to submit the tapes within eight hours of the ruling and resigned 16 days later. This case became a landmark precedent establishing the principle that "no one, not even the President, is above the law." Compliance with the ruling was swift, and an institutional crisis was averted.

Structural similarities with the present case: Both Nixon and Trump were repudiated by justices they themselves appointed. Chief Justice Burger in the Nixon case structurally corresponds to Justices Gorsuch and Barrett in the current case. The crucial difference lies in their reactions. Nixon, despite his dissatisfaction, complied within eight hours, maintaining institutional order. Trump, while formally complying with the ruling (by invoking alternative tariffs), adopted a "dual strategy of compliance and attack" by openly attacking the justices, thereby eroding judicial authority. This strategy may maintain political cohesion in the short term but erodes trust in institutions in the long term.

Patterns Revealed by History

Clashes between the President and the Supreme Court are a recurring structural pattern in American history. FDR (1937) achieved a long-term victory through institutional countermeasures, and Nixon (1974) protected the system by complying with the ruling. Trump (2026) presents a third type, combining formal compliance with personal attacks. History teaches that these types of conflicts create short-term crises but are ultimately resolved through congressional legislative action. In this case, too, the key lies in whether Congress can legislate tariff authority.

Future Scenarios

Optimistic Scenario (Probability: 20%)

Congress agrees on a bipartisan basis to legislate tariff authority, stabilizing the legal foundation of trade policy. Long-term trade legislation is enacted before the 150-day deadline. Trump's judicial attacks remain rhetorical, and institutional conflict is averted. Dollar depreciation pressure eases, and market risk-on sentiment recovers. Both BTC and S&P500 rise.

Investment/Action Implications: If legal policy stability is confirmed, a return to risk assets would be rational. Gradual accumulation of BTC and tech stocks would be effective. However, congressional agreement is highly difficult given the divisions within the Republican Party.

Base Scenario (Probability: 50%)

The 10% uniform tariff under Section 122 continues for 150 days, but extension talks in Congress face difficulties. Due to divisions within the Republican Party, clear legislation is not achieved, and market uncertainty rises again as the 150-day deadline approaches. Trump continues to attack the judiciary but does not proceed with specific institutional changes (such as court-packing). The dollar gradually declines, and gold remains firm. BTC trades directionlessly within the $60,000-$80,000 range.

Investment/Action Implications: Portfolio construction based on prolonged uncertainty is crucial. Diversification away from dollar-denominated assets into gold, BTC, and non-dollar assets should be pursued gradually. Hedging against increased volatility around the July expiration should also be considered.

Pessimistic Scenario (Probability: 30%)

Trump effectively ignores the Supreme Court ruling by invoking new IEEPA tariffs under the guise of a different "emergency," leading to a full-blown constitutional crisis. Congressional Republicans divide, and discussions of impeachment or judicial impeachment emerge. Markets lose confidence in America's institutional stability, leading to simultaneous sell-offs of the dollar and U.S. Treasuries. BTC and gold could surge as a haven from the "dollar exodus," while in a full risk-off environment, crypto assets could also be dragged down.

Investment/Action Implications: In the worst-case scenario, flight to highly liquid safe-haven assets (gold, short-term U.S. Treasuries) is the top priority. BTC presents both the possibility of serving as a "haven from dollar distrust" and being "sold off as a risk asset," so position sizing should be kept small.

Key Triggers to Watch

• Arrival of the 150-day deadline for Section 122 tariffs of the Trade Act: Late July 2026
• Congressional movements on tariff legislation (support/opposition within the Republican Party): March-July 2026
• Trump's additional judicial attacks or hints at institutional changes: Immediately ~ H1 2026
• Developments in lawsuits for the refund of $134 billion already collected under IEEPA tariffs: Q2 2026 onwards
• FRB's monetary policy decisions (whether interest rate cuts accelerate dollar depreciation): March & May 2026 FOMC

Tracking Points

Next Trigger: The outcome of the 2024 U.S. presidential election and the direction of the next administration's trade policy (January 2025).

Continuation of this pattern: Changes in market confidence in America's institutional stability and the acceleration of capital shifts to crypto assets and gold.

Sources:

• WatcherGuru（元ツイート）
• CNBC - Supreme Court strikes down Trump tariffs
• NPR - Supreme Court strikes down Trump's tariffs
• SCOTUSblog - Supreme Court strikes down tariffs
• NBC News - Trump calls justices 'disloyal'