Court Says Emergency Powers Were Overstretched
The Supreme Court of the United States has struck down former President Donald Trump’s sweeping global tariffs, ruling 6–3 that he overstepped his authority by using emergency powers to impose them.
At the heart of the case were tariffs introduced under a 1977 emergency law, including so-called “reciprocal” duties applied to nearly all US trading partners. The majority opinion, written by Chief Justice John Roberts, made clear that the Constitution assigns Congress — not the president — the power to levy taxes, including tariffs. “The Framers did not vest any part of the taxing power in the Executive Branch,” Roberts wrote.
Justices Samuel Alito, Clarence Thomas and Brett Kavanaugh dissented. Kavanaugh argued that, regardless of whether the tariffs were good policy, they were lawful based on text, history and precedent.
The ruling marks the first major piece of Trump’s broader agenda to reach the nation’s highest court — a bench he helped shape by appointing three conservative justices during his first term.
What the Decision Means for Tariffs
The decision does not permanently shut the door on tariffs. It specifically blocks those imposed under the International Emergency Economic Powers Act (IEEPA), a law traditionally used for sanctions and asset freezes. Trump had argued that trade deficits and drug trafficking constituted national emergencies, giving him authority to impose import taxes.
Other presidents have invoked the IEEPA dozens of times, but Trump was the first to use it to justify broad tariffs. Legal challenges quickly followed, brought by a coalition of mostly Democratic-leaning states as well as small businesses ranging from plumbing suppliers to toy sellers.
Opponents argued the law simply does not authorize tariffs and that the administration’s reasoning failed legal tests previously used to strike down major executive actions — including former President Joe Biden’s student loan forgiveness plan.
The economic stakes are significant. The Congressional Budget Office estimated the long-term impact of the tariffs at around $3 trillion over the next decade. Since April 2025 — a date Trump dubbed “Liberation Day” — the US Treasury has collected roughly $240 billion in tariff revenue, with about $133 billion tied directly to duties imposed under the emergency law.
Refunds, Markets and Political Fallout
Now, attention is turning to whether businesses will be entitled to refunds. Several companies, including warehouse giant Costco, have already gone to court seeking repayment. Analysts at Capital Economics estimate that potential refunds could total about $120 billion — roughly 0.5% of US GDP.
Justice Kavanaugh, in dissent, warned that sorting out refunds could become a “mess.” It remains unclear how much, if any, the government may ultimately have to return.
Financial markets initially reacted positively to the ruling, with the S&P 500 rising sharply after the news broke before gains eased later in the day. Investors have generally welcomed moves that rein in tariffs, though many expect Trump to continue pursuing his trade agenda through other legal avenues.
Trump had previously called the case one of the most important in US history, warning that a ruling against him would cost the country “hundreds of billions of dollars.” Friday’s decision delivers a clear constitutional rebuke — and a significant setback to one of the defining pillars of his economic policy.
