In a major decision with far-reaching implications for U.S. trade policy, the Supreme Court ruled Friday to strike down most of the tariffs imposed by President Donald Trump under emergency economic powers, finding that the statute he relied upon did not grant him authority to enact broad import taxes.
The 6–3 ruling upheld an earlier federal circuit court decision that concluded the International Emergency Economic Powers Act (IEEPA), a law passed in 1977 to allow presidents to respond to foreign threats through economic measures, does not authorize the imposition of sweeping tariffs. Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh dissented.
Writing for the majority, Chief Justice John Roberts rejected the administration’s legal interpretation of the law.
“Based on two words separated by 16 others in . . . IEEPA,” Roberts writes, “‘regulate’ and ‘importation’ — the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time. Those words cannot bear such weight.”
Scope of the Ruling
The decision does not invalidate all tariffs imposed during Trump’s presidency. Tariffs on steel and aluminum enacted under different statutory authorities remain intact.
However, the ruling directly affects tariffs imposed under IEEPA, including:
A 34 percent levy on goods from China
A 10 percent baseline tariff applied broadly to imports from other countries
A 25 percent tariff targeting certain goods from Canada, China, and Mexico tied to concerns over fentanyl trafficking
These tariffs were part of what Trump described as “reciprocal” measures intended to counter what he viewed as longstanding unfair trade practices and to encourage domestic industrial growth.
Trump was the first president to attempt to use IEEPA to create new tariffs through executive action. Traditionally, the law has been used for sanctions, embargoes, and other emergency economic restrictions rather than import taxes.
White House Reaction
In remarks from the White House following the decision, Trump called the ruling “deeply disappointing” and said he was “ashamed of certain members of the Court … for not having the courage to do what’s right for the country.”
He also warned that foreign governments benefiting from the ruling “won’t be dancing for long,” signaling his intention to pursue alternative legal pathways to reimpose tariffs.
Trump pointed to Kavanaugh’s dissent, which suggested the decision might not significantly limit presidential authority in the long run.
“That is because numerous other federal statutes authorize the President to impose tariffs and might justify most (if not all) of the tariffs at issue in this case—albeit perhaps with a few additional procedural steps that IEEPA, as an emergency statute, does not require,” Kavanaugh wrote.
He referenced several existing trade laws that could provide alternative legal justification for tariffs, including statutes passed in 1962, 1974, and 1930.
Trump said the ruling opens the door to pursuing “a different direction which is even stronger than our original choice,” adding that he may ultimately be able to “charge much more than I’m charging.”
Potential Financial and Trade Impacts
One of the immediate questions raised by the decision is whether businesses that paid tariffs under IEEPA will be entitled to refunds.
Kavanaugh’s dissent highlighted this possibility, noting:
“The United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others.”
The ruling itself does not clarify whether refunds will be mandated.
According to reporting by the Washington Post, the federal government had collected nearly $134 billion in tariffs under IEEPA through mid-December.
The uncertainty surrounding refunds has already prompted legal and political pressure. More than 1,000 firms have filed lawsuits seeking repayment.
A coalition of over 800 small businesses, We Pay the Tariffs, called on the administration to act quickly.
“The administration’s only responsible course of action now is to establish a fast, efficient, and automatic refund process that returns tariff money to the businesses that paid it,” said executive director Dan Anthony.
“Small businesses cannot afford to wait months or years while bureaucratic delays play out, nor can they afford expensive litigation just to recover money that was unlawfully collected from them in the first place. These businesses need their money back now.”
Trade Agreements in Question
Beyond financial concerns, the ruling could introduce new uncertainty into trade agreements negotiated during the tariff period.
Kavanaugh noted that tariffs enacted under IEEPA played a role in facilitating agreements with several trading partners, including China, the United Kingdom, and Japan.
He warned that the Court’s decision could complicate those arrangements, stating that revisiting them may prove difficult.
“A second issue is the decision’s effect on the current trade deals,” he wrote.
Because tariffs were used as leverage in negotiations, their removal may alter the balance of commitments made by foreign governments.
Broader Political Context
The ruling arrives amid longstanding debate over the scope of presidential authority in trade matters.
Trump has consistently defended his tariff policies as essential tools for protecting national security and economic independence.
In December, he wrote on Truth Social that a ruling against the tariffs would be a “total disaster” for the country.
“Everybody should pray that the United States Supreme Court has the Wisdom and Genius to allow Tariffs to GUARD our National Security, and our Financial Freedom!” he said at the time.
He also warned in August that refunding tariffs could trigger severe economic consequences, stating it “would be 1929 all over again, a GREAT DEPRESSION!”
What Comes Next
While the Court’s decision limits the use of IEEPA for tariff policy, it does not eliminate the president’s broader trade powers.
Legal analysts expect the administration to explore other statutory authorities referenced in Kavanaugh’s dissent.
At the same time, businesses and trade partners are likely to monitor how the government addresses potential refunds and how ongoing trade agreements may be affected.
The ruling underscores the continuing tension between executive flexibility in responding to economic threats and congressional authority over trade policy.
