US Supreme Court Reportedly Strikes Down Tariffs
The U.S. Supreme Court has reportedly struck down tariffs from the previous Trump administration, a move with significant implications for the global market. A new report from ITS Logistics highlights the decision alongside easing inflation and a resilient job market as key factors shaping current supply chain dynamics.
In a 6-3 decision, the Supreme Court ruled the tariffs were an overreach of executive power, finding the International Emergency Economic Powers Act (IEEPA) of 1977 does not grant the president authority to unilaterally impose tariffs. Chief Justice John Roberts, in the majority opinion, argued that Congress alone holds the power to tax and that such a significant economic power could not be delegated to the president without explicit and clear authorization. The ruling specifically invalidates the broad "reciprocal" baseline tariffs and other measures justified under IEEPA, such as those related to fentanyl trafficking. However, it does not affect tariffs imposed under other laws, like the Section 232 tariffs on steel and aluminum or the Section 301 tariffs targeting Chinese trade practices. The Trump administration immediately responded by invoking Section 122 of the Trade Act of 1974 to impose a new temporary global tariff. This provision allows the president to enact tariffs for up to 150 days to address balance of payment issues, effectively creating a placeholder while the administration explores longer-term options. For supply chain managers in the hospitality sector, the original tariffs led to significant cost increases for imported goods like furniture, fixtures, construction materials, and even some food items. Developers reported underwriting 5-10% higher hard costs for projects due to the tariffs and related freight volatility. The question of refunds for the more than $200 billion collected under the now-illegal tariffs remains unresolved. While the court did not outline a refund mechanism, the U.S. Court of International Trade is expected to establish a process, though it may involve years of further litigation before importers are reimbursed.
