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 that he exceeded his authority by relying on emergency powers to impose them.
In a 6–3 decision, the court found that the Constitution clearly grants Congress — not the president — the power to levy taxes, including tariffs. Chief Justice John Roberts wrote that the nation’s founders did not give any portion of the taxing power to the executive branch.
Justices Samuel Alito, Clarence Thomas and Brett Kavanaugh dissented. Kavanaugh argued that, regardless of whether the tariffs were good policy, the law in question allowed the president to act as he did.
The ruling marks the first major pillar of Trump’s broader agenda to be squarely rejected by the nation’s highest court — a court he helped shape during his first term.
Emergency Powers at the Center of the Dispute
At the heart of the case was Trump’s use of the International Emergency Economic Powers Act (IEEPA), a 1977 law that allows presidents to regulate economic transactions during national emergencies. Historically, the law has been used for sanctions and asset freezes, not for imposing import taxes.
Trump invoked the statute to justify so-called “reciprocal tariffs” on nearly every US trading partner in April 2025, framing trade deficits as a national emergency. Earlier duties targeting Canada, China and Mexico were tied to what his administration described as a drug trafficking crisis.
Legal challenges quickly followed, brought by a coalition of mostly Democratic-leaning states as well as small businesses ranging from plumbing suppliers to toy retailers. Opponents argued the law does not authorize tariffs and said Trump’s move failed established legal standards.
While the ruling blocks tariffs enacted under emergency powers, it does not prevent Trump from pursuing duties through other trade laws — though those come with tighter procedural limits.
Billions at Stake and Markets React
The financial implications are significant. Since April 2025, the US Treasury has collected roughly $240 billion in tariff revenue. Analysts estimate that potential refunds could total around $120 billion — about 0.5% of US GDP. Justice Kavanaugh warned in his dissent that sorting out repayments could become chaotic.
The Congressional Budget Office previously estimated that the broader economic impact of Trump’s tariff program could reach $3 trillion over the next decade.
Markets responded positively at first, with the S&P 500 briefly rising about 1% after the decision before settling to more modest gains. Investors have generally welcomed limits on tariffs, though many believe Trump will continue to push his trade agenda through alternative legal pathways.
Trump had repeatedly framed the case as historic, warning that an adverse ruling would trigger massive repayments and hurt the country economically. The court’s decision now sets the stage for further legal and political battles over the future of US trade policy.
