US Tariff Policy in Turmoil After Supreme Court Ruling

- The Supreme Court's 6-3 decision in *Learning Resources, Inc. v. Trump* held that the International Emergency Economic Powers Act (IEEPA) of 1977 does not grant the president the authority to impose tariffs. The majority opinion, authored by Chief Justice John Roberts, emphasized that the power to levy taxes and duties is explicitly granted to Congress by the Constitution. - This ruling invalidates the broad "Liberation Day" tariffs and other duties on goods from countries like China, Mexico, and Canada that were justified by national emergencies related to trade deficits and fentanyl trafficking. As a result, the U.S. government may be required to refund billions of dollars to importers who paid these tariffs. - The ruling does not impact tariffs imposed under other laws, such as the Section 232 tariffs on steel and aluminum, which are based on national security findings from the Department of Commerce. These tariffs, first implemented in 2018 and later increased, remain in effect on a wide range of goods, including derivative products. - In response to the ruling, former President Trump announced he would use Section 122 of the Trade Act of 1974 to impose a new global tariff, initially set at 10% and quickly raised to 15%. However, this authority limits the president to imposing tariffs for a maximum of 150 days and caps the rate at 15%, requiring congressional approval for any extension. - The legal challenge to the IEEPA tariffs was supported by numerous business groups, including the U.S. Chamber of Commerce, which filed amicus briefs arguing the president had exceeded his statutory authority. They argued the tariffs caused significant cost increases and supply chain disruptions for American businesses. - The court's majority applied the "major questions doctrine," which requires Congress to provide clear and explicit authorization for executive actions with vast economic and political significance. The opinion stated that Congress would not be expected to relinquish its core taxing power through the vague language found in IEEPA. - Dissenting Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh argued that the president's power to "regulate...importation" under IEEPA was broad enough to include imposing tariffs and that the court has historically granted the executive branch significant deference in matters of foreign affairs and national security.