Justices Rule President Overstepped His Authority
The Supreme Court of the United States has struck down former President Donald Trump’s sweeping global tariffs, ruling 6-3 that he exceeded his authority by invoking emergency powers to impose them.
At the heart of the case were the broad “reciprocal” tariffs Trump introduced on nearly every US trading partner, relying on a 1977 emergency powers law. The court’s majority made clear that the Constitution assigns the power to levy taxes — including tariffs — to Congress, not the president.
Chief Justice John Roberts wrote that the Constitution “very clearly” places taxing authority with lawmakers, emphasizing that the nation’s founders did not grant any portion of that power to the executive branch. Justices Samuel Alito, Clarence Thomas and Brett Kavanaugh dissented, with Kavanaugh arguing that the tariffs were lawful based on legal text and precedent, regardless of whether they were good policy.
Emergency Powers at the Center of the Dispute
The Trump administration had relied on the International Emergency Economic Powers Act (IEEPA), which allows a president to declare a national emergency in response to an external threat and use economic tools such as sanctions and asset freezes. While past presidents have used the law dozens of times, primarily for sanctions, Trump was the first to apply it to impose import taxes.
In April 2025, he declared trade deficits a national emergency and rolled out sweeping tariffs. Earlier duties targeting Canada, China and Mexico were framed as a response to drug trafficking concerns. A wave of lawsuits followed, brought by a coalition of mostly Democratic-leaning states as well as small businesses ranging from plumbing suppliers to toy sellers and apparel brands.
Challengers argued that the emergency law does not authorize tariffs and that Trump’s approach failed established legal standards. Legal resistance came from across the political spectrum, including libertarian and pro-business groups often aligned with Republicans.
Economic Fallout and What Comes Next
The ruling does not completely bar Trump from pursuing tariffs under other trade laws, though those avenues come with tighter procedural limits. Administration officials have suggested they will seek alternative legal pathways to maintain the broader tariff framework.
The financial stakes are high. The Congressional Budget Office has estimated that Trump’s tariffs could have a $3 trillion impact over the next decade. Since early April 2025 — a date Trump branded “Liberation Day” when unveiling his expanded tariff plan — the US Treasury has collected roughly $240 billion in tariff revenue. Analysts at Capital Economics estimate that potential refunds, if ordered, could total about $120 billion, roughly 0.5% of US GDP.
Justice Kavanaugh, in dissent, warned that sorting out possible repayments could become a “mess.” Several companies, including warehouse giant Costco, have already gone to court seeking refunds.
Markets initially responded positively to the decision, with the S&P 500 rising as much as 1% after the news broke before trimming gains. While investors have generally welcomed efforts to rein in tariffs, many still expect Trump to continue fighting to preserve a central pillar of his economic agenda.
