A recent US Supreme Court ruling has eliminated the legal basis for imposing unilateral tariffs under the International Emergency Economic Powers Act, significantly affecting the trade agreement between Ecuador and the United States.
On February 20, 2026, the United States Supreme Court ruled in the case of Learning Resources vs. Trump that the International Emergency Economic Powers Act (IEEPA) of 1977 does not authorize the Executive branch to impose unilateral tariffs. This ruling effectively nullifies a system that had raised $160 billion through tariffs imposed under the IEEPA and dismantles the foundation of the Reciprocal Trade Agreement (ART) finalized between Ecuador and the United States on February 13, 2026. As a result, the legal requirement for tariffs has disappeared, diminishing the incentive for the Ecuadorian government to make painful concessions in trade negotiations.
The ruling has caused Ecuador to adopt a cautious 'wait and see' approach to its trade strategy, mirroring the stances already taken by countries like India, Russia, Mexico, the European Union, and Canada. With the legal framework that supported tariff imposition now invalidated, Ecuador faces challenges in negotiating favorable terms with the US. The implications of this decision extend beyond bilateral relations and could impact broader international trade dynamics, as other nations reassess their own agreements and obligations in light of this judgment.
While the Ecuadorian negotiation has the merit of securing favorable and definitive access to a significant portion of the export offer, the respect and adherence to such agreements now face legal uncertainties following the Supreme Court's decision. This situation raises questions about the future of trade relations between Ecuador and the United States, particularly in light of the need for greater stability and predictability in international trade arrangements.
