Supreme Court Curbs Presidential Tariff Power
The U.S. Supreme Court has ruled that tariffs imposed during the Trump presidency exceeded presidential authority. The landmark decision could require the government to pay billions in reimbursements to importers and significantly resets the landscape for U.S. trade policy.
The Supreme Court's 6-3 decision in *Learning Resources, Inc. v. Trump* centered on the International Emergency Economic Powers Act (IEEPA) of 1977. The majority opinion, written by Chief Justice John Roberts, asserted that the IEEPA does not grant the president the authority to impose tariffs, as the power to tax is explicitly reserved for Congress by the Constitution. The Trump administration had argued that large trade deficits constituted a national emergency, allowing the use of IEEPA to enact broad tariffs on imports from most countries starting in April 2025. This was an unprecedented interpretation of the 1977 law, which had previously been used for sanctions and addressing foreign threats, not for wide-ranging trade policy. This ruling does not impact tariffs imposed under other statutes, such as the 25% levy on steel and 10% on aluminum. Those were enacted in 2018 using Section 232 of the Trade Expansion Act of 1962, which allows for import restrictions on national security grounds. Economists estimate the now-illegal IEEPA tariffs generated between $130 billion and $175 billion in revenue for the U.S. government. Studies indicated these tariffs increased costs for American consumers and businesses, leading to job losses in manufacturing sectors that rely on imported materials, offsetting gains in the protected industries. Following the ruling, the U.S. Court of International Trade has ordered U.S. Customs and Border Protection to begin the process of refunding the collected duties. The process for importers to reclaim these funds will involve submitting claims for entries that have not yet been finalized by customs, a procedure that could be lengthy. Major corporations including FedEx, Toyota, Costco, and Nintendo have filed lawsuits to secure refunds for the tariffs they paid. The federal government initially sought a 90-day delay to consider its options, but a federal appeals court denied the request, clearing the way for the refund process to begin. In response to the Supreme Court's decision, the president announced a new 10% global tariff under Section 122 of the Trade Act of 1974. This law allows for temporary tariffs for up to 150 days to address trade deficits, after which congressional approval is required for them to continue.
