Court Rules Presidential Tariffs Exceed Authority
The Supreme Court of the United States on Friday struck down Donald Trump’s sweeping global tariffs, ruling that he overstepped his power by relying on emergency legislation. The 6–3 decision focused on tariffs imposed under the International Emergency Economic Powers Act (IEEPA), which Trump invoked to levy broad duties on nearly every US trading partner.
Chief Justice John Roberts wrote that the Constitution clearly grants Congress — not the president — the authority to impose taxes, including tariffs. Justices Samuel Alito, Clarence Thomas, and Brett Kavanaugh dissented, arguing the tariffs were legally valid even if their policy merits were debated.
Legal and Economic Fallout
The ruling does not prevent Trump from imposing tariffs under other statutes, though such measures carry stricter limits. The emergency tariffs, known as “reciprocal tariffs,” were originally justified as responses to trade deficits and alleged national emergencies, including issues involving Canada, China, and Mexico.
The legal challenges came from a mix of Democratic-leaning states and small businesses, which argued that the emergency powers law does not authorize tariffs. The tariffs have raised roughly $240 billion for the Treasury, with potential refund liabilities estimated around $120 billion, or 0.5% of US GDP, if courts require repayments. Companies including Costco have already sought refunds, and Justice Kavanaugh warned the process could become complicated.
Market Reaction and Political Implications
Markets responded positively to the ruling, with the S&P 500 rising as much as 1% immediately after the decision before settling around 0.3% higher. Investors have generally welcomed moves to limit tariffs, though many expect Trump to continue pursuing his trade agenda through alternative legal avenues.
Trump himself had framed the case as historic, warning of “hundreds of billions of dollars to pay back” if the court ruled against him. The decision now curtails his use of emergency powers in trade policy, reinforcing the constitutional principle that Congress holds taxing authority and shaping the future limits of presidential action in international commerce.
