In a significant development in the political arena, the Supreme Court on Friday made a fundamental change to US President Donald Trump's trade tariff policy. The court's decision determined that the president does not have the authority to unilaterally impose broad tariffs on almost all countries under the framework of federal emergency law. This decision dealt a serious blow to the president's core economic policy.
The Redaksiya reports, citing CBS News, that the Supreme Court's decision states that the International Emergency Economic Powers Act (IEEPA) does not grant the president the authority to impose tariffs. The court was divided 6-3, with Chief Justice John Roberts delivering the court's opinion. Justices Brett Kavanaugh, Clarence Thomas, and Samuel Alito filed a dissenting opinion.
Roberts, in a portion of the decision joined by Justices Neil Gorsuch and Amy Coney Barrett, wrote: "There is no mention of tariffs or duties in the IEEPA. The government does not point to any statute in which Congress has used the word 'regulate' to authorize taxes. No president has ever read the IEEPA to grant such authority. We do not claim special authority in matters of economics or foreign affairs. We only assert the limited role assigned to us by Article III of the Constitution. In fulfilling this role, we conclude that the IEEPA does not grant the president the authority to impose tariffs."
The legal dispute over Trump's tariffs was the first time the Supreme Court evaluated the legal basis of one of his second-term policies. The Supreme Court had previously allowed many of the president's plans to take temporary effect while legal processes were ongoing, but this decision, deeming Trump's global tariffs invalid, is his most significant loss to date in his second term. The court upheld the decision of the U.S. Court of Appeals for the Federal Circuit that Trump's tariffs were unlawful. The majority did not address the issue of refunding funds to businesses that paid tariffs on imported goods.
In his dissenting opinion, Kavanaugh wrote that tariffs, like quotas and embargoes, are a "traditional and common tool" for regulating imports, as specified in the IEEPA. Kavanaugh, in an opinion joined by Thomas and Alito, wrote: "The tariffs discussed here may or may not be wise policy. But in terms of text, history, and precedent, they are clearly lawful." While the decision limits the president's authority to set duties under the IEEPA, it does not prevent the president from imposing tariffs within the framework of various trade bodies. Trump has already relied on other laws to impose duties on imports of copper, steel, aluminum, and other products. Tariffs are a central part of Trump's economic agenda in his second term. The president has used the threat of duties to encourage trade partners to sign more favorable trade agreements for the U.S. and to help boost domestic production.
According to the president, the decision is a "disgrace." Journalists at the White House were waiting to enter a meeting between the president and the nation's governors on Friday morning, but were sent back to the press area minutes after the decision was announced. The president stated during the meeting that the decision was a "disgrace" and that he had a backup plan. Administration officials stated that the president could quickly re-impose tariffs under various authorities. Prior to the decision, Trump said, "Our country is stronger and more respected than ever before, both financially and in terms of national security." He also warned that an unfavorable decision would force the U.S. to pay significant sums to importers, which would be "a complete disaster and almost unaffordable for our country."
The court's decision came four days before the State of the Union address, where the president would mark the key achievements of his first year. The dispute before the Supreme Court concerned two sets of duties the president imposed through a series of executive orders last year. Trump used the emergency powers of the IEEPA to impose tariffs, which he said were necessary to respond to "large and persistent" trade deficits and to stop the flow of illegal fentanyl and other drugs into the U.S. The IEEPA had not been used to impose tariffs before.
The first set of tariffs established a 10% baseline rate for almost all U.S. trading partners, as well as higher reciprocal rates for dozens of countries. A second batch of duties targeted China, Canada, and Mexico. The IEEPA allows the president to "regulate imports" to combat any "unusual and extraordinary threat" to national security, foreign policy, or the U.S. economy. Trump claimed that trade imbalances and the influx of fentanyl into the country posed such a threat.
The president announced the import taxes on "Freedom Day" last February and April. Since then, the administration has announced framework trade agreements with more than a dozen countries and the European Union, and stated that it was negotiating with many other countries. Two small groups of businesses and a group of 12 states filed lawsuits in two different courts, claiming that the IEEPA did not authorize Trump's broad tariffs. Since then, three lower courts have ruled that the president does not have the authority to unilaterally impose global and anti-smuggling tariffs under the IEEPA. Despite losses in the lower courts, the Trump administration continued to collect import taxes as the court battle moved to the Supreme Court. The president also continued to resort to the IEEPA to impose new tariffs or change existing rates, including imposing a 40% tariff on certain goods from Brazil or a 25% duty on imports from India for Russian oil imports.
Roberts, in a portion of the decision joined by Gorsuch and Barrett, wrote that under the government's interpretation of the IEEPA, the president "is not constrained by the significant procedural limitations in other tariff laws and is free to make dizzying changes at any time." He wrote: "The only thing required to unlock this extraordinary authority is a declaration of emergency by the president, which the government claims is unrepeatable. And the only way to limit the exercise of this authority is a majority in Congress without veto power. This view, if adopted, would represent a 'transformative expansion' of the president's authority over tariff policy and indeed – as evidenced by the exercise of this authority in this case – over the broader economy."
According to the Treasury Department, the U.S. collected $195 billion in tariff revenue in fiscal year 2025, and $28 billion in January. Dozens of businesses from various parts of the country filed lawsuits protesting the legality of the duties. Major companies such as Costco, Crocs, and Revlon have filed lawsuits, stating they are seeking full reimbursement for tariffs paid on imported goods as a result of the president's policies.
Kavanaugh, in his dissenting opinion, warned that refunding billions of dollars in tariffs already paid would have "significant consequences" for the U.S. Treasury and that the process would be a "disaster." He also expressed concern about how existing trade agreements, such as those with the United Kingdom, China, and Japan, would be affected by the court's decision. Trump and administration officials have claimed that foreign manufacturers pay most of the tariffs. However, an analysis by the Federal Reserve Bank of New York earlier this month showed that approximately 90% of the burden of tariffs fell on U.S. companies and consumers last year. The Federal Reserve Bank of New York determined that the average U.S. duty on imports increased from less than 3% to 13% in 2025.