Supreme Court Kills Trump Tariffs
The U.S. Supreme Court just struck down President Trump's "reciprocal" tariffs, a decision that upends recent American trade policy. The ruling is seen as a major win for China and other U.S. trading partners. While it may limit the White House's ability to impose new tariffs unilaterally, analysts expect Trump will seek other legal avenues to pursue his protectionist agenda.
The "reciprocal" tariffs were enacted under the International Emergency Economic Powers Act (IEEPA) of 1977, a law granting the president authority to regulate commerce during a national emergency. President Trump declared a national emergency concerning the U.S. trade deficit to justify the tariffs. In a 6-3 decision in *Learning Resources, Inc. v. Trump*, the Supreme Court ruled that the IEEPA does not grant the president the authority to impose tariffs. Chief Justice John Roberts, in the majority opinion, stated that the power to tax, which includes imposing tariffs, is constitutionally vested in Congress. The Court reasoned that if Congress intended to delegate such a significant power, it would have done so explicitly. The invalidated tariffs affected a wide range of goods and countries, with some nations facing a baseline 10% tariff while others, like China, saw rates climb as high as 145% when combined with other duties. These broad tariffs impacted everything from metals and electronics to vehicles and computers. The ruling has raised questions about the potential refund of over $160 billion in tariffs that were collected under the now-illegal order. Following the Supreme Court's decision, the Trump administration immediately announced new, temporary tariffs of 15% under Section 122 of the Trade Act of 1974, which allows for tariffs to be imposed for up to 150 days in response to a balance-of-payments crisis. This move signals that the administration will continue to utilize other legal avenues to pursue its trade agenda. The Supreme Court's ruling specifically addressed the use of IEEPA for these "reciprocal" tariffs and so-called "fentanyl" tariffs, but it does not affect tariffs imposed under other laws, such as Section 232 of the Trade Expansion Act of 1962 (national security) or Section 301 of the Trade Act of 1974 (unfair trade practices). This leaves significant portions of the administration's tariff regime in place.
