Supreme Court Ruling Weakens US Tariffs
A U.S. Supreme Court decision has undermined the legal basis for some of the Trump administration's tariffs on Chinese goods, giving Beijing more leverage in trade talks. Despite the ruling, President Trump is pursuing new tariffs, though legal experts question his authority and expect further court challenges.
The Supreme Court's 6-3 decision in *Learning Resources Inc. v. Trump* found that the President exceeded his authority by using the International Emergency Economic Powers Act (IEEPA) to unilaterally impose sweeping tariffs. Chief Justice John Roberts, writing for the majority, argued the power to tax, including setting tariffs, belongs to Congress. This ruling immediately invalidates several key tariff programs, including the "reciprocal" tariffs that set a 10% baseline on imports from most countries and the so-called "fentanyl" tariffs levied against China, Mexico, and Canada. The decision, however, does not affect tariffs imposed under other laws, such as the Section 301 duties on Chinese goods from the first Trump administration or the Section 232 national security tariffs on steel and aluminum. Within hours of the ruling, President Trump announced a new 10% global tariff, which he later increased to 15%, under a different legal authority: Section 122 of the Trade Act of 1974. This provision allows for temporary duties for a maximum of 150 days to address "balance-of-payments deficits." Legal experts and economists immediately questioned the justification for the new tariffs, arguing the U.S. does not have the "fundamental international payments problems" that Section 122 was designed to address. This has opened the door for new legal challenges from importers and business groups. The now-illegal IEEPA tariffs had generated over $160 billion in revenue for the federal government. The Supreme Court did not rule on whether these collected funds must be refunded to importers, leaving a significant financial question unresolved and likely to be settled in lower courts. The 150-day limit on the new Section 122 tariffs means they will expire in mid-2026 unless Congress votes to extend them. The administration has indicated it will use this period as a "bridge" to pursue more permanent measures through other avenues, including new investigations under Section 301, which do not have rate caps or time limits.
