A divided Supreme Court handed President Trump a critical loss on trade Friday, overturning most of his emergency-declared tariffs on global imports. Voting 6-3, justices ruled the 1977 International Emergency Economic Powers Act grants no such broad presidential authority, affecting duties on nations like India, Canada, China, and Mexico.
Chief Justice John Roberts’ majority opinion underscored constitutional limits: presidents must identify explicit congressional permission for unlimited tariffs. The IEEPA, he noted, provides ‘far short’ of that for Trump’s sweeping applications, traditionally limited to sanctions amid crises.
This decision torpedoes a key pillar of Trump’s economic nationalism, which weaponized the decades-old law in novel ways—no prior president had tried tariffs under it. Sector-specific tariffs on metals remain untouched, offering some continuity.
Hundreds of companies, from Costco to Revlon and Toyota affiliates, now eye massive refunds on billions paid in duties. The ruling’s timing amplifies its impact amid ongoing trade tensions.
Yet, the White House isn’t out of options; constitutional tariff power resides with Congress, and alternative laws beckon. This case tested—and trimmed—executive muscle in trade, rooted in the IEEPA’s intent to counter ‘unusual and extraordinary’ threats narrowly.
As repercussions unfold, the verdict fortifies legislative oversight, reminding leaders that economic remaking demands more than emergency proclamations. It shapes a more restrained path for U.S. engagement in global markets.