Supreme Court Rules Trump's Emergency Tariffs Illegal
In a 6-3 decision handed down Friday, the court found that the International Emergency Economic Powers Act (IEEPA) — the legal cornerstone of Trump's sweeping tariff regime — does not confer upon the president the authority to impose such duties. The ruling firmly reaffirmed that the power to levy customs tariffs rests with Congress alone.
Trump had deployed the IEEPA to impose "reciprocal" tariffs on virtually all U.S. trading partners, while separately targeting China, Canada, and Mexico under the same statute, citing the cross-border flow of fentanyl as justification. The court's majority opinion noted that in the IEEPA's half-century of existence, no prior president had ever invoked the law to impose any customs duty — let alone measures of the scale and sweep Trump introduced.
The decision rejected the administration's interpretation of the IEEPA as legislation granting the president power to "unilaterally impose unbounded tariffs and change them at will." Justices ruled that the statute's use of the word "regulating" does not encroach upon Congress's authority to "set tariff policy," and that the power to "regulate … importation" does not bridge that constitutional gap. Crucially, the court noted that customs duties and fees appear nowhere in the law's extensive enumeration of presidential powers.
$175 Billion Refund Threat Looms Over U.S. Treasury
Beyond its immediate legal implications, the ruling has triggered an acute fiscal crisis of uncertainty. According to the Penn Wharton Budget Model, more than $175 billion in IEEPA-collected tariff revenue may be subject to refund. The ruling stopped short of establishing a concrete repayment framework, but a dissenting opinion from Supreme Court Justice Brett Kavanaugh warned that refunding billions to importers would carry significant consequences for the U.S. Treasury Department.
Trump swiftly addressed reporters following the ruling, calling the decision "deeply disappointing" and expressing that he was "ashamed" of certain justices.
"The good news is that there are methods, practices, statutes and authorities, as recognized by the entire court in this terrible decision — and also as recognized by Congress," said Trump.
Rather than signaling retreat, Trump announced plans to sign an executive order implementing a 10% global tariff under Section 122 of the Trade Act of 1974, alongside new investigations under Section 301 and additional statutes targeting what he described as unfair foreign trade practices. He contended the decision ultimately clarified and reinforced presidential trade authority, predicting the new framework would generate even greater tariff revenue than before.
On the fate of trade agreements negotiated under the IEEPA umbrella, Trump was blunt: many deals would remain intact, while others would be rendered void and replaced by "other alternatives." He also criticized the court's silence on tariff refunds, predicting the matter would remain mired in litigation for years.
U.S. Treasury Secretary Scott Bessent moved to calm markets, asserting that pivoting to alternative legal authorities would leave tariff revenues "virtually unchanged" in 2026. Bessent stressed that the court had not ruled against tariffs broadly — only against the use of the IEEPA as the vehicle for imposing them.
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