This is the fifth installment in a new series we launched in September that highlights opportunities for taking a third side approach to difficult decisions about the most pressing issues of the day. Our hope is to provide support for navigating disagreement in a constructive, principled way during this period of heightened conflict. (To see what we mean by the Third Side, please see our Guiding Principles here.)
The Supreme Court Ruling: On February 20, 2026, the Supreme Court handed down one of the most consequential trade rulings in a generation. In a 6-3 decision, the Court ruled that the President exceeded his authority under the International Emergency Economic Powers Act, which is the legal authority the current administration had cited when he imposed sweeping tariffs on a broad range of countries. State of U.S. Tariffs: SCOTUS Ruling Update. Within hours of the decision, the administration replaced the invalidated tariffs with a new 10% global surcharge under a different statute, shortly raised to 15%, set to expire in 150 days. State of Tariffs: February 21, 2026. Over the last year, 330,000-plus businesses paid $166 billion in tariffs; shifted supply chains; adjusted operations, including labor decisions; and paused long-term strategy planning altogether. NPR
The Debate: Although many focus on the debate about whether to impose tariffs and if so, at what rates and on which countries, there is a parallel debate going on that arguably may have bigger ramifications for business and the economy. And that is what the Supreme Court ruling addressed: how trade policy gets made in the United States.
In Support of Broad Executive Authority: Those supporting broad executive authority on trade decisions argue that decades of open trade hollowed out American manufacturing. The trade deficit is real, foreign subsidies are real, and without credible economic leverage, diplomatic promises ring hollow. If the U.S. can't use executive authority to move fast, rivals will simply wait out lengthy congressional processes. The tariff regime, whatever its short-term costs, has already spurred re-shoring conversations and other positive changes.
Against Broad Executive Authority: Those supporting more limited executive authority argue that businesses cannot invest, hire, or price products in a policy environment that can shift by executive order overnight. For example, in a single year, companies had to deal with a tariff rate on Chinese imports that swung from 2.5% to a peak above 145% and back. Trump Tariffs & Trade War by the Numbers. Voting against a resolution that would have prohibited Congress from cancelling Trump’s tariffs, Republican Representative Don Bacon said, "Congress needs to be able to debate on tariffs. Article I of the Constitution places authority over taxes and tariffs with Congress for a reason, but for too long, we have handed that authority to the executive branch." NBC
The Third Side: Regardless of one's views on specific trade policies, all business leaders most likely can agree that the U.S. needs effective trade relationships and a policy environment that allows for long-term planning. Although there are legitimate debates to be had about the best way to achieve those goals, there is common ground to be found. What most businesses need right now is a tariff policy-making process that is transparent and predictable in a way that allows companies to make longer-term capital commitments and strategy decisions with more confidence. This past year, business leaders across sectors described spending extraordinary time analyzing tariff schedules, trying to read congressional signals, and holding back on investment, hiring, and new product lines. The State Economies Most Vulnerable to Shifting Tariffs, One place that business leaders can come together on trade policy regardless of which policy they support, is on stabilizing the trade policy-making process in a way that will allow them to go back to running their business.
Share Your Thoughts
As you think about where your company sits in the current debate, some questions that may be helpful to consider are:
- How much policy uncertainty can your supply chain absorb before you start making permanent structural changes such as moving sourcing, shifting production, that would be hard to reverse even if the policy environment stabilizes?
- If Congress were to take back tariff authority, would you trust it to act faster or more coherently than the executive branch has? Or is the real ask simply for more advance notice and clearer legal basis, regardless of who is setting the rate?
This stuff isn’t easy. The more we talk and share best practices, the better we all will get at finding new ways to the third side, especially during these challenging times. Let us know what you think: please share your thoughts.