The Supreme Court of the United States has struck down most of President Donald Trump’s sweeping global tariffs in a 6–3 decision, ruling that he exceeded his constitutional authority. The justices determined that Trump could not rely on the 1977 International Emergency Economic Powers Act (IEEPA) to impose broad import taxes on goods from nearly every country.
Majority Opinion Reinforces Congressional Power
Chief Justice John Roberts, writing for the majority, emphasized that Congress holds the constitutional power to levy taxes. He stated that when tariff authority is delegated to the president, it must be done explicitly and within strict limits. The ruling was joined by the court’s three liberal justices and two conservative justices appointed by Trump, Neil Gorsuch and Amy Coney Barrett, while Clarence Thomas, Brett Kavanaugh, and Samuel Alito dissented.
Origins of the Tariff Policy
The tariffs were initially imposed on Mexico, Canada, and China before being expanded globally during what Trump called “Liberation Day” in April last year. The administration argued that trade imbalances and foreign economic practices amounted to a national emergency, justifying action under IEEPA. However, several U.S. states and hundreds of businesses challenged the legality of the move.
Billions of Dollars Collected
At least $130 billion has been collected under the IEEPA tariffs, raising the possibility of substantial refunds. The Supreme Court’s decision does not directly order repayments, meaning the issue is likely to be handled by the U.S. Court of International Trade. Legal experts warn that refund claims could take years to resolve.
Trump’s Immediate Response
As reported by BBC News, Trump responded within hours by signing a proclamation introducing a new 10% global tariff under Section 122 of the Trade Act. This rarely used provision allows temporary tariffs of up to 15% for 150 days without prior congressional approval. The new measure is set to take effect on 24 February.
Exemptions and Trade Implications
The new tariff includes exemptions for certain minerals, fertilizers, pharmaceuticals, select agricultural goods, some electronics, and specific vehicles. Canada and Mexico remain largely exempt under the USMCA trade agreement. However, many other countries will now face the uniform 10% rate.
Alternative Trade Tools on the Table
Trump criticized the ruling as “terrible” and signaled that he may rely on other legal mechanisms, including Section 232, which addresses national security concerns, and Section 301, which targets unfair trade practices. These tools have previously been used to impose tariffs on steel, aluminium, and automobiles, and were not affected by the ruling.
Market Reaction and Ongoing Uncertainty
Financial markets reacted positively, with the S&P 500 rising about 0.7% following the announcement. While many businesses welcomed the ruling as a relief, economists caution that uncertainty remains high. The legal and political battle over U.S. trade policy is expected to continue, keeping global markets on edge.
