US Supreme Court Blocks Trump Emergency Tariffs

The Supreme Court of the United States has struck down former President Donald Trump’s sweeping tariffs imposed under a national emergency law, delivering a major setback to his administration’s trade policy.

In a 6-3 decision written by Chief Justice John Roberts, the court ruled that Trump exceeded his authority by using the International Emergency Economic Powers Act (IEEPA) to impose tariffs on nearly all US trading partners.

Court Says IEEPA Does Not Allow Tariffs

The justices said the 1977 law allows a president to regulate commerce during a national emergency, but it does not give clear authority to impose tariffs.

“Our task today is to decide only whether the power to regulate importation under IEEPA includes the power to impose tariffs. It does not,” Roberts wrote in the majority opinion.

The court also cited the “major questions” doctrine. This principle says that actions with major economic and political impact must have clear approval from Congress. The majority said allowing tariffs under IEEPA would intrude on Congress’s power to impose taxes and tariffs.

Majority and Dissenting Opinions

Joining Roberts in the majority were Justices Neil Gorsuch and Amy Coney Barrett, along with the three liberal justices — Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson. However, the liberal justices did not join the part of the opinion that relied on the major questions doctrine.

Justice Brett Kavanaugh dissented, joined by Clarence Thomas and Samuel Alito. Kavanaugh argued that tariffs are a traditional tool to regulate imports and said the ruling may not fully block Trump from using other laws to impose similar tariffs.

He warned the decision could create serious short-term consequences, including possible refunds and uncertainty around trade agreements.

Impact on Economy and Markets

The ruling had an immediate impact on financial markets. US stock indexes rose sharply — their biggest gain in more than two weeks — while the dollar weakened and Treasury yields edged higher.

Economists from the Penn-Wharton Budget Model estimated that more than $175 billion had been collected under Trump’s IEEPA-based tariffs. With the Supreme Court ruling against these tariffs, a large portion of that money may need to be refunded.

Trump had argued that the tariffs were essential for US economic security and to counter unfair trade practices by countries including China. He said without tariffs, the United States would be “defenceless” in global trade.

Congress Holds Taxing Authority

The US Constitution gives Congress the authority to impose taxes and tariffs. However, Trump invoked IEEPA to bypass Congress and introduce tariffs without legislative approval.

Although some tariffs were imposed under other laws — such as national security and unfair trade practice provisions — these are not part of the current case. Those tariffs account for about one-third of the total revenue from Trump’s import taxes during the period examined.

Treasury Secretary Scott Bessent and other officials have indicated that the administration may explore other legal options to maintain some tariffs. However, experts say these alternatives may not offer the same broad powers as IEEPA.

Political Reactions

Senate Democratic Leader Chuck Schumer called the decision a victory for American consumers, saying the court had stopped what he described as an illegal tariff tax.

Democratic Senator Elizabeth Warren said the ruling leaves uncertainty about how consumers and small businesses can recover money already paid in tariffs. She warned that large corporations might be better positioned to claim refunds.

Candace Laing, President and CEO of the Canadian Chamber of Commerce, said the ruling is a legal decision, not a full reset of US trade policy. She cautioned that new trade pressure measures could follow.

The ruling limits the president’s ability to use emergency powers to impose tariffs without clear congressional approval. However, the dissenting opinion suggests future presidents may still find other legal paths to introduce trade measures.

The decision marks a significant moment in the balance of power between the executive branch and Congress and could reshape US trade policy going forward.