U.S. Supreme Court Strikes Down Trump’s Emergency Tariffs
The U.S. Supreme Court struck down U.S. President Donald Trump’s global tariff agenda in a much-anticipated ruling on Friday.
The Court held in a six to three decision that the International Emergency Economic Powers Act (IEEPA)—a 1970s statute that gives the president the power to regulate or prohibit international transactions during a national emergency—does not allow the president to impose tariffs.
U.S. Supreme Court Chief Justice John G. Roberts wrote in the majority opinion that the framers of the U.S. Constitution gave Congress the power to impose tariffs during peacetime. While tariffs have foreign affairs implications, typically a realm that the president has broad authority in, that does not make it more likely that Congress would relinquish its tariff power to the Executive Branch through vague language or without careful limits, Roberts explained.
“Accordingly, the president must ‘point to clear congressional authorization’ to justify his extraordinary assertion of that power,” Roberts wrote. “He cannot.”
Roberts was joined in his opinion in part by Justices Amy Coney Barrett, Neil M. Gorsuch, Ketanji Brown Jackson, Elena Kagan, and Sonia Sotomayor. Justices Samuel A. Alito, Brett M. Kavanaugh, and Clarence Thomas dissented.
As of press time, the Trump administration had not issued a formal response to the Court’s ruling. But the Associated Press (AP) reports that the president called the decision “a disgrace” when he was notified about it this morning.
Trump announced shortly after taking office in January 2025 that he would impose tariffs to raise money for the U.S. federal government and to obtain leverage over other countries to achieve his foreign policy goals.
To do so, his administration claimed that an illegal drug influx from Canada and Mexico had created a public health crisis in the United States. It also argued that trade deficits—including with geopolitical rival China—had hollowed out the American manufacturing base and undermined critical supply chains. Trump subsequently declared a national emergency on both fronts and invoked authority under IEEPA to impose tariffs to deal with each threat. He further broadened those tariffs to impose duties on nearly all U.S. trading partners of at least 10 percent—a day known as “Liberation Day.”
“The rationale behind Liberation Day follows a two-part story,” according to an explainer from the Center for Strategic and International Studies (CSIS). “The first is the administration’s own framing, that this is a necessary corrective to decades of open U.S. markets being met with asymmetrical foreign tariffs and other barriers that boxed out U.S. goods. Only aggressive retaliation can reverse the damage and pull manufacturing back onshore.”
The second rationale was transactional—to raise revenue to finance significant tax cuts that Trump pushed and were enacted in the One Big Beautiful Bill Act (OBBBA), CSIS wrote. Estimates from the Bipartisan Policy Center show that the OBBBA would cost about $3.4 trillion during the next 10 years, and more than $4 trillion when accounting for interest on the national debt.
Following Liberation Day, 20 countries made trade deals with the United States to reduce tariffs in some areas. Many of the deals emphasized “economic security,” which can cover everything from “mirroring U.S. trade actions toward third countries (such as through tariffs or export controls), establishing investment-screening mechanisms, excluding certain countries from government procurement contracts, and committing to cooperation on supply chain resilience,” the Center on Foreign Relations (CFR) assessed in a trade deal tracker.
The Court on Friday, however, rejected the Trump administration’s rationale for his authority to impose tariffs. Citing American history of revolution against England partly in response to taxation without representation, Roberts explained that the framers did not vest any part of the taxing power in the Executive Branch.
“The president asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope,” Roberts wrote. “In light of the breadth, history, and constitutional context of that asserted authority, he must identify clear congressional authorization to exercise it.”
The Court’s decision halts a major portion of Trump’s economic agenda that was expected to have an economic impact of $3 trillion over the next decade. The New York Times reported that the U.S. Department of the Treasury has already collected about $200 billion in tariff revenue since Liberation Day.
But the tariffs also had a major impact on national security, with the U.S. defense industry reporting higher costs to manufacturer products that were often passed on to their customers—including the U.S. federal government.
A CFR analysis found that the tariffs raised prices for the U.S. Department of Defense’s major weapon systems purchases. The tariffs also raised prices for the 16 critical infrastructure sectors in the United States and potentially slowed the deployment of artificial intelligence (AI) infrastructure.
“South Korea, Taiwan, and Vietnam are key sources for semiconductors, servers, and other important data center components and face ‘reciprocal tariffs’ of 25 percent, 32 percent, and 20 percent, respectively,” the CFR found. “Even if tariffs on South Korea and Taiwan are lowered through successful negotiations, a pending Section 232 investigation on semiconductors is expected to raise costs. In a bleaker scenario, if talks with China deteriorate, U.S. data center developers could face additional costs of more than $11 billion annually, according to Altana.”
CEOs also expressed concerns about the effect the Trump administration’s tariffs would have on their businesses and supply chains. In prior Security Management reporting of PwC’s annual Global CEO Survey, almost a third of CEOs said “tariffs will reduce their company’s net profit margin in the year ahead, and another third said geopolitical uncertainty is making CEOs less likely to make large new investments.”
With the Court’s decision, there are also concerns that many of the companies impacted by Trump’s tariffs will demand refunds. Major retailer Costco filed a lawsuit in December 2025, claiming that the tariffs collected under the IEEPA were unlawful and demanding a full refund of all duties paid as a result. NBC News reports that Revlon, Kawasaki, Yokohama Tire, and many other businesses have filed similar lawsuits.
In his dissent, Justice Kavanaugh wrote that the Court’s decision will likely generate other serious practical consequences that include refunds of billions of dollars.
“The Court says nothing today about whether, and if so how, the government should go about returning the billions of dollars that it has collected from importers. But that process is likely to be a ‘mess,’ as was acknowledged at oral argument,” Kavanaugh explained.
He also wrote about concerns surrounding current trade deals in light of the Court’s decision.
“Because IEEPA tariffs have helped facilitate trade deals worth trillions of dollars—including with foreign nations from China to the United Kingdom to Japan—the Court’s decision could generate uncertainty regarding various trade agreements,” Kavanaugh continued. “That process, too, could be difficult.”
