On Friday morning, the Supreme Court ruled against Donald Trump's broad tariffs, which he imposed through a series of executive orders, under the International Emergency Economic Powers Act (IEEPA), declaring that the 1977 law does not authorize the president to unilaterally impose sweeping import duties as a tool for addressing trade deficits, national security, or emergencies like fentanyl flows.
Several lower courts had already ruled the tariffs unlawful. The Supreme Court heard the case Learning Resources, Inc. v. Trump in November. At that time, most of the justices seemed doubtful that IEEPA was applicable in this situation, so the ruling does not come as a surprise. It should also be noted that IEEPA does not explicitly mention tariffs.
The ruling was a 6-3 decision, with Chief Justice Roberts writing the main opinion, joined by Justices Sonia Sotomayor, Elena Kagan, Neil Gorsuch, Amy Coney Barrett, and Ketanji Brown Jackson. He says that the law allows the president to "regulate importation" in emergency situations, but that does not mean adding taxes.
Roberts claims that "those two words ['regulate importation'] cannot bear such weight" when used to justify tariffs with massive economic consequences. He invoked the major questions doctrine (MQD), requiring "clear congressional authorization" for actions of extraordinary economic and political significance. The opinion noted that the Constitution assigns taxing and commerce powers to Congress, and no president had ever used IEEPA for tariffs in its nearly 50-year history.
Justices Brett Kavanaugh, Clarence Thomas, and Samuel Alito disagreed in dissent, saying that the law's flexible enough for tariffs in crises.
Thomas wrote in his dissent that "neither statutory text nor the Constitution provide a basis for ruling against the President." He argued that the Court has allowed Congress to give the president broad discretion in trade and foreign affairs matters in the past.
Ultimately, this means that companies can get refunds to the tune of up to $175 billion. In the future, presidents will likely have less control over major economic issues, giving Congress more control.
According to CNBC, "The majority of U.S. tariff revenue generated last year came from the IEEPA duties." The ruling invalidates all IEEPA-based tariffs retroactively, meaning importers can file for reliquidation and refunds via U.S. Customs and Border Protection, though the process may face delays, audits, and logistical challenges.
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