Court Rules Tariffs Exceed Executive Authority
The Supreme Court of the United States on Friday blocked Donald Trump’s sweeping global tariffs, ruling that the president overstepped his constitutional authority by using emergency powers. In a 6–3 decision, the justices said the Constitution grants Congress — not the president — the power to impose taxes, including tariffs. Chief Justice John Roberts wrote that the Framers did not vest any part of the taxing power in the executive branch.
Justices Samuel Alito, Clarence Thomas, and Brett Kavanaugh dissented, arguing that while the tariffs may be debatable policy, they were lawful under historical precedent.
Emergency Powers and Legal Challenges
The case centered on the International Emergency Economic Powers Act (IEEPA), a 1977 law that allows the president to impose sanctions or take economic action during national emergencies. Trump was the first president to apply it to import taxes, enacting broad “reciprocal tariffs” on most US trading partners to address trade deficits and other perceived threats.
The tariffs led to lawsuits from a dozen mostly Democratic states, as well as small businesses selling products from plumbing supplies to educational toys. Challengers argued that IEEPA does not authorize tariffs and that Trump’s use of the law failed multiple legal tests, echoing arguments that had invalidated other controversial federal programs.
Economic Impact and Market Reaction
Trump’s tariffs generated roughly $240 billion in revenue for the US Treasury, with potential refunds estimated at $120 billion — about 0.5% of GDP. Justice Kavanaugh warned in dissent that refund disputes could become chaotic. Companies including Costco have already sought reimbursements.
Markets initially reacted positively, with the S&P 500 jumping as much as 1% before settling at a modest gain. Analysts note that while the ruling constrains Trump’s use of emergency powers for tariffs, he could still pursue duties under other statutes, leaving uncertainty about the future of his trade policies.
