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The Supreme Court delivered a significant blow to President Donald Trump’s economic agenda on Friday, invalidating sweeping tariffs he had imposed on nearly every country by a 6-3 margin. The ruling determined that Trump’s use of the 1977 International Emergency Economic Powers Act (IEEPA) to justify these tariffs exceeded his authority.
In the majority opinion, Chief Justice John Roberts emphasized that the Constitution “very clearly” assigns the power to impose taxes, including tariffs, to Congress rather than the president. “The fact that no President has ever found such power in IEEPA is strong evidence that it does not exist,” Roberts wrote.
Notably, two justices appointed by Trump himself joined the majority in striking down this cornerstone of his economic policy. Justices Samuel Alito, Clarence Thomas, and Brett Kavanaugh dissented, with Kavanaugh arguing that “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.”
The decision raises complex questions about potential refunds for the more than $133 billion collected through these tariffs as of December. Many companies, including retail giant Costco, have already filed claims seeking refunds in lower courts. However, the Supreme Court did not address the refund process in its ruling.
Justice Kavanaugh acknowledged this challenge in his dissent, noting that any refund system “is likely to be a ‘mess,’ as was acknowledged at oral argument.” Trump similarly predicted years of litigation over refunds. While companies that directly paid the tariffs may eventually receive refunds, ordinary consumers who faced higher prices due to the tariffs are unlikely to see direct relief.
The ruling specifically impacts tariffs Trump imposed using IEEPA as justification. This includes levies on America’s largest trading partners – Mexico, Canada, and China – which Trump had declared necessary due to a “national emergency” involving undocumented immigration and drug trafficking. In April, Trump had also announced what he called “reciprocal” tariffs of up to 50% on dozens of countries and a baseline 10% tariff on almost everyone else, also citing IEEPA.
Other Trump-imposed tariffs remain intact, however. These include sector-specific duties on steel, aluminum, automobiles, copper, lumber, kitchen cabinets, bathroom vanities, and upholstered furniture from various trading partners.
Trump responded forcefully to the decision, calling the majority justices “unpatriotic,” “disloyal,” and “a disgrace to our nation.” He claimed that “foreign countries that have been ripping us off for years are ecstatic… But they won’t be dancing for long.”
Despite the setback, Trump vowed to press forward with his agenda, stating there are “methods, practices, statutes and authorities” that “are even stronger than the IEEPA tariffs.” He promised to sign an executive order imposing a new 10% global tariff under federal law, though this would be limited to 150 days unless extended by Congress.
The decision represents a significant victory for anti-tariff advocates. Dan Anthony, leader of the small business group We Pay the Tariffs, celebrated the ruling, saying it validated their position that “these tariffs were unlawful from the start.” Anthony highlighted the financial strain the tariffs had placed on small businesses, many of which “have taken out loans just to keep their doors open… frozen hiring, canceled expansion plans, and watched their life savings drain away to pay tariff bills.”
The ruling comes at a pivotal moment in the ongoing debate over presidential trade authority and could significantly impact Trump’s economic agenda should he return to office. It also highlights the crucial role the Supreme Court plays in defining the boundaries between executive and legislative powers in U.S. trade policy.
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7 Comments
The ruling seems to affirm Congress’s constitutional role in setting trade policy, even if the President may disagree. It will be worth watching how this affects future trade negotiations and agreements.
Do you think this could lead to more bipartisan cooperation on trade issues, or will it just lead to more political gridlock?
As an investor in mining and commodities, I’m wondering how this could impact the price and availability of key materials like steel, aluminum, and rare earth elements. The tariffs had some intended and unintended effects on those sectors.
Interesting to see the Supreme Court rule against the President’s tariff authority. This decision could have significant implications for trade and economic policy going forward.
I’m curious to see how the administration responds and whether they pursue alternative avenues to impose tariffs.
This ruling is a significant check on the President’s trade authority. It will be interesting to see if Congress takes a more active role in shaping trade policy moving forward, given the Court’s emphasis on their constitutional powers.
The dissenting opinions suggest there is still debate around the President’s trade powers, even if the majority ruled against it in this case. I expect we’ll see continued legal battles over the scope of executive authority on economic issues like this.