Supreme Court Kills Trump's Tariffs

The Supreme Court's 6-3 decision hinged on the International Emergency Economic Powers Act (IEEPA) of 1977. The majority opinion, written by Chief Justice John Roberts, asserted that the Constitution grants Congress the sole power to tax and levy tariffs, and IEEPA did not delegate this specific authority to the president for the broad "reciprocal" duties Trump imposed. This ruling invalidated not only the sweeping "reciprocal" tariffs but also separate duties on goods from China, Mexico, and Canada that were justified by alleged failures to curb fentanyl trafficking. However, the decision does not affect tariffs imposed under other laws, such as the Section 232 national security tariffs on steel and aluminum. The immediate consequence is that U.S. Customs and Border Protection has ceased collecting the IEEPA-based tariffs. This opens the door for importers to seek refunds on the more than $130 billion already collected under the now-illegal tariff regime, though the process could be lengthy. Within hours of the ruling, the administration invoked the seldom-used Section 122 of the Trade Act of 1974. This provision allows the president to impose a temporary surcharge of up to 15% for a maximum of 150 days to address a "balance-of-payments" deficit, an authority that had never been used before. Acting on this, Trump immediately instated a new 10% global tariff, which he announced would soon increase to the maximum 15% allowed under the statute. Unlike the IEEPA tariffs, these new duties require Congressional approval to be extended beyond the 150-day limit. The legal justification for using Section 122 is already being questioned. The law was designed for a fixed-exchange-rate era to address currency crises, not persistent trade deficits, leading some legal experts to argue its current application is on shaky ground.