Supreme Court Strikes Down Trump’s Emergency Tariff Powers in 6-3 Decision

The U.S. Supreme Court delivered a major blow to President Trump's trade policy Friday, ruling 6-3 that he cannot use emergency powers to impose widespread tariffs. The decision invalidates billions in import taxes collected under the 1977 emergency law, though refunds remain uncertain.

WASHINGTON — President Donald Trump suffered a significant setback to his trade agenda Friday when the U.S. Supreme Court rejected his use of emergency authority to implement extensive import taxes across the globe.

The high court’s 6-3 decision determined that Trump’s reliance on emergency powers legislation to establish these trade levies was unconstitutional.

Notably, two of the three justices Trump nominated to the court sided with the majority against this major component of his second-term economic strategy.

Trump had invoked the International Emergency Economic Powers Act of 1977, known as IEEPA, to justify his widespread tariff program, despite the law making no reference to trade duties. The legislation, originally designed to allow presidents to freeze assets and halt financial transactions during national crises, was first implemented during the Iranian hostage situation. Since then, it has been applied to various international conflicts, including responses to September 11th and the conflict in Syria.

The president argued that America’s trade imbalance constituted a national emergency serious enough to warrant such measures, but the Supreme Court rejected this reasoning.

Chief Justice John Roberts, writing for the majority, stated: “The fact that no President has ever found such power in IEEPA is strong evidence that it does not exist.”

The court’s opinion emphasized that the Constitution “very clearly” assigns Congress, rather than the executive branch, the authority to establish taxes, including import duties.

Three justices — Samuel Alito, Clarence Thomas, and Brett Kavanaugh — opposed the majority ruling.

Justice Kavanaugh wrote in dissent: “The tariffs at issue here may or may not be wise policy. But as a matter of text, history, and precedent, they are clearly lawful.”

In early 2024, Trump used IEEPA to establish tariffs on the nation’s top three trade partners: Mexico, Canada, and China. He justified these measures by declaring a national emergency related to illegal border crossings and fentanyl trafficking.

Later, in April during what Trump called “Liberation Day,” he implemented “reciprocal” import taxes reaching 50% on products from numerous nations, plus a standard 10% levy on nearly all other countries, again citing IEEPA authority.

Trump also applied IEEPA to establish significant import duties on Brazilian products, pointing to that nation’s legal action against former President Jair Bolsonaro, and on Indian goods, citing India’s Russian oil purchases.

These IEEPA-based tariffs have experienced frequent changes over the past year, with rates being removed, increased, and reinstated multiple times.

Although the Supreme Court’s ruling eliminates many of these import taxes, other Trump tariffs based on different legal foundations remain in place.

The majority of America’s trade partners continue to face substantial duties on particular industries, including steel, aluminum, automobiles, copper, lumber, kitchen cabinetry, bathroom fixtures, and upholstered goods.

The White House has not yet issued a statement regarding the court’s decision, but tariff opponents are celebrating the outcome.

We Pay the Tariffs, representing small businesses that challenged the import taxes, described the ruling as a “tremendous victory” for companies harmed by the levies.

Group leader Dan Anthony stated: “They’ve taken out loans just to keep their doors open. They’ve frozen hiring, canceled expansion plans, and watched their life savings drain away to pay tariff bills that weren’t in any budget or business plan. Today, the Supreme Court has validated what we’ve been saying all along: These tariffs were unlawful from the start.”

Government records indicate the Treasury Department has gathered over $133 billion from these emergency-power-based import taxes through December.

However, the Supreme Court did not determine whether businesses and individuals who paid these tariffs could receive refunds. Several companies, including warehouse retailer Costco, have already filed lawsuits in lower courts seeking reimbursement.

Justice Kavanaugh, in his dissenting opinion, warned the refund process could prove challenging.

“The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers. But that process is likely to be a ‘mess,’ as was acknowledged at oral argument,” Kavanaugh wrote.