Supreme Court Curbs Presidential Tariff Authority
The Supreme Court of the United States ruled that the president lacks the legal authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). The decision follows tariffs imposed by President Trump. Advisory firm Wipfli is advising businesses to re-evaluate their tariff exposure following the ruling.
- The 6-3 majority opinion stated that the IEEPA's authority to "regulate… importation" does not grant the president the power to levy taxes in the form of tariffs, a power the Constitution reserves for Congress. - This was the first instance of a president using the 1977 International Emergency Economic Powers Act to impose broad tariffs; the law has historically been used for sanctions, such as freezing assets of foreign governments and nationals. - The invalidated tariffs included "Reciprocal Tariffs" on imports from most trading partners and "Trafficking and Immigration Tariffs" targeting China, Mexico, and Canada. - Estimates suggest over $160 billion had been collected from the now-illegal tariffs, but the Supreme Court's decision did not specify the process for issuing refunds to importers. - In response to the ruling, President Trump immediately announced new 10% global tariffs under the authority of Section 122 of the Trade Act of 1974. - The ruling does not impact other tariffs imposed by the Trump administration under different laws, such as the Section 232 tariffs on steel and aluminum. - The case, consolidated as *Learning Resources, Inc. v. Trump* and *V.O.S. Selections, Inc. v. Trump*, was brought by small businesses and several states challenging the tariffs' legality. - Prior to the Supreme Court's decision, the U.S. Court of International Trade and the U.S. Court of Appeals for the Federal Circuit had also ruled that the IEEPA did not authorize these tariffs.
