Supreme Court Strikes Down Trump-Era Tariffs

The Supreme Court's 6-3 decision in *Learning Resources, Inc. v. Trump* invalidated the legal authority the administration used for its broadest tariffs, the International Emergency Economic Powers Act (IEEPA). Chief Justice John Roberts, writing for the majority, argued the Constitution grants Congress the sole power to tax, and the IEEPA did not explicitly delegate that authority to the President for levying tariffs. This ruling specifically struck down the so-called "reciprocal" tariffs of at least 10% on goods from most countries and the "fentanyl" tariffs targeting imports from China, Mexico, and Canada. Before the ruling, the average U.S. effective tariff rate had surged to 13.7% in February 2026, the highest in over a century; the decision caused the rate to fall to 9.1%. The now-illegal IEEPA tariffs had a significant economic impact, collecting an estimated $133.5 billion in revenue in 2025 alone. Studies indicated that U.S. firms and consumers bore nearly 90% of the cost of these tariffs. The Tax Foundation estimated that the tariffs cost the average American household an additional $1,000 in 2025. In response to the Court's decision, the administration immediately invoked Section 122 of the Trade Act of 1974. This allows for a temporary global tariff of up to 15% for a maximum of 150 days to address "balance-of-payments problems," a move some legal experts argue is on shaky ground given the current economic context. It is crucial to note that many significant tariffs remain unaffected by this ruling. Tariffs imposed under Section 232 of the Trade Expansion Act of 1962, which cites national security, continue to apply to goods like steel, aluminum, copper, and automobiles. Downstream industries, particularly construction and automotive, have faced increased costs due to these specific levies. The ruling opens the possibility of massive refunds for importers who paid duties under the IEEPA, with estimates reaching as high as $175 billion. However, the process for claiming and distributing these refunds remains unclear and is expected to be complex and potentially litigious. The decision has significantly altered the trade landscape, forcing a shift in the legal tools used to implement tariff policy. While the broadest tariffs are gone, the remaining sector-specific duties and the new temporary global tariff mean that businesses and consumers still face an average effective tariff rate that is the highest it has been since 1946 (excluding 2025).