Supreme Court invalidates Trump tariffs based on emergency powers - Supply Chain Dive

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The Supreme Court on Friday ruled against President Donald Trump’s use of an emergency powers statute to impose open-ended tariffs, marking a major legal setback for the president’s trade policy.

In a 6-3 decision, the court rejected Trump's claim that the 1977 International Emergency Economic Powers Act gave him the authority to impose broad tariffs globally, saying that Congress alone has the power to lay and collect tariffs.

“The Framers [of the Constitution] recognized the unique importance of this taxing power — a power which ‘very clear[ly]’ includes the power to impose tariffs,” the ruling says.

The opinion, written by Chief Justice John Roberts, found that Congress’ taxing power cannot be handed off through vague language, rejecting the administration’s argument that the words “regulate” and “importation” in IEEPA gave the president broad powers to impose tariffs.

“Recognizing the taxing power’s unique importance, and having just fought a revolution motivated in large part by ‘taxation without representation,’ the Framers gave Congress ‘alone . . . access to the pockets of the people,’” the ruling says.

Hours after the ruling, Trump issued an executive order stating the IEEPA tariffs referenced in prior executive orders will no longer be in effect or collected. The president also directed the heads of executive departments and agencies to take the necessary steps to execute the order.

In a separate order, Trump continued the suspension of the de minimis exemption, which previously allowed imports valued at less than $800 to enter the U.S. duty-free.

The Supreme Court opinion rejected the administration’s argument that the president’s declaration of a national emergency was sufficient to unlock extraordinary tariff power that could only be restrained by a “veto-proof majority in Congress.”

“That view, if credited, would ‘represent a ‘transformative expansion’ of the President’s authority over tariff policy,” the ruling says.

Because Congress has the “power of the purse,” any transfer of broad, discretionary tariff-setting would require clear, specific statutory language, not general or ambiguous terms.

“When Congress has delegated its tariff powers, it has done so in explicit terms and subject to strict limits,” the ruling says.

The Trump administration appealed to the high court last fall after two lower courts ruled the president exceeded his power by bypassing Congress' constitutional authority to set tariffs earlier in the year, including so-called reciprocal tariffs. The president argued the levies were justified to address a national emergency caused by the U.S.’ trade deficits and fentanyl trafficking from Canada, China and Mexico.

The administration urged the court to move quickly, arguing that legal uncertainty over the tariffs was hurting trade negotiations. The Supreme Court agreed to expedite its review and consolidated three separate lawsuits challenging tariffs Trump announced in April and later finalized in August. The plaintiffs in the suits included seven businesses and 12 states.

Despite Friday’s ruling, the Trump administration has codified numerous other tariffs using statutes with more historical precedent for setting levies. These include a slew of sector-specific duties on goods such as steel, cars and furniture implemented under Section 232 of the Trade Expansion Act of 1962. Trump also has additional tools at his disposal to continue implementing duties, albeit with less broad reach than his use of IEEPA.

Editor’s note: This story has been updated to include details from executive orders President Donald Trump signed Friday.