Supreme Court Strikes Down Most of Donald Trump Tariffs

TL;DR

• Court rules IEEPA does not authorize presidential tariff powers.

• Decision invalidates reciprocal and fentanyl-linked tariffs.

• Steel and aluminum tariffs under other laws remain valid.

• IEEPA tariffs raised about $130 billion by December data.

The Supreme Court has ruled that President Donald Trump exceeded his authority by imposing sweeping tariffs under IEEPA. The law allows regulation during national emergencies but does not mention tariffs.

Chief Justice John Roberts authored the majority opinion. He was joined by three liberal justices and two conservative justices. The ruling held that Congress did not grant tariff authority under IEEPA.

“The president asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration and scope,” Roberts wrote. He added that the administration “points to no statute” authorizing tariffs under IEEPA.

What the Ruling Invalidates and What Remains

The decision voids two categories of tariffs imposed under IEEPA. One includes reciprocal tariffs ranging from 34% on China to a 10% baseline globally.

The other involves a 25% tariff on certain goods from Canada, China and Mexico. The administration had linked those duties to fentanyl control concerns.

However, tariffs on steel and aluminum remain in effect. Those were imposed under separate trade laws that the Court did not review in this case.

The Constitution assigns tariff authority to Congress. Trump relied on IEEPA, which permits regulation of imports during declared emergencies. No prior president had used that law to impose tariffs.

Refund Questions and Treasury Exposure

Businesses that paid the invalidated tariffs may seek refunds. Hundreds of companies filed legal challenges before the ruling. Justice Brett Kavanaugh dissented and raised concerns about refund logistics. “The Court says nothing today about whether, and if so how, the Government should go about returning the billions,” he wrote.

As of mid-December, IEEPA tariffs had generated about $130 billion, based on Customs data. The Court did not specify how refunds should be processed. Business groups welcomed the ruling. Victor Schwartz of VOS Selections called the tariffs “arbitrary, unpredictable, and bad business.”

Dan Anthony of We Pay the Tariffs urged a fast refund process. He said small businesses cannot afford long delays or costly litigation.

Political and Economic Reactions

The ruling represents a rare defeat for the administration before a conservative-majority Court. Trump had previously defended the tariffs and said, “Without tariffs, this country would be in such trouble right now.”

Peter Schiff reacted on social media and supported the ruling. He argued that tariff revenue would stop and the budget deficit could rise. The Court also referenced the major questions doctrine. That principle requires clear congressional authorization for broad national policies.

Lower courts had ruled against the administration in related cases. Both sides sought a final decision from the Supreme Court.

The decision narrows executive authority under IEEPA but does not eliminate presidential tariff powers under other statutes. Trump has stated he has a “backup plan” regarding trade measures.

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