Supreme Court Curbs Trump's Tariff Power
The U.S. Supreme Court just handed China a major victory, issuing a ruling that curtails the Trump administration's authority to impose certain tariffs. The decision comes as Trump prepares for a high-stakes visit to China, potentially complicating his trade negotiations and rendering some new tariffs illegal.
The Supreme Court's decision centered on the International Emergency Economic Powers Act (IEEPA), ruling that the law does not grant the president the authority to impose tariffs. Chief Justice Roberts, in the 6-3 majority opinion, wrote that the power to tax and levy tariffs belongs to Congress. This ruling invalidated a significant portion of the administration's tariffs implemented in 2025, including those targeting China and other major trading partners. In a swift response just hours after the ruling, the administration invoked a different legal authority, Section 122 of the Trade Act of 1974, to implement a new 10% global tariff, which was quickly raised to 15%. This move is intended to serve as a temporary "bridge" while the administration prepares to use other trade laws, like Sections 301 and 232, to establish a more permanent tariff structure. Section 122, which has never been used before, allows the president to impose tariffs for a maximum of 150 days to address a "fundamental international payments problem." However, legal experts argue that this provision, designed for a fixed-exchange-rate era, may not be applicable to the current U.S. economic situation, potentially opening the new tariffs to legal challenges. The upcoming summit in China, scheduled from March 31 to April 2, will see President Trump meet with President Xi Jinping. The talks were expected to focus on extending a trade truce, but the Supreme Court's ruling and the imposition of new, temporary tariffs will likely introduce a new dynamic to the negotiations.
