US Supreme Court Strikes Down Trump's Sweeping Emergency Tariffs
The United States Supreme Court delivered a landmark ruling on Friday, striking down a series of expansive tariffs imposed by former President Donald Trump. The court determined that Trump overstepped his authority under emergency economic powers, marking a significant limitation on presidential trade actions.
Court Rules President Exceeded Authority
In a decisive 6-3 decision, the conservative-majority court held that the International Emergency Economic Powers Act (IEEPA) "does not authorize the President to impose tariffs." The ruling represents a substantial check on executive power in trade matters.
Chief Justice John Roberts, delivering the majority opinion, emphasized that "IEEPA contains no reference to tariffs or duties." The court's judgment stated, "The United States, after all, is not at war with every nation in the world. The Government instead relies exclusively on IEEPA. It reads the words 'regulate' and 'importation' to effect a sweeping delegation of Congress's power to set tariff policy—authorizing the President to impose tariffs of unlimited amount and duration, on any product from any country."
The bench further clarified that "had Congress intended to convey the distinct and extraordinary power to impose tariffs through IEEPA, it would have done so expressly, as it consistently has in other tariff statutes."
Notably, three liberal justices joined three conservative justices in the majority, creating an unusual alignment. Justices Brett Kavanaugh, Clarence Thomas, and Samuel Alito dissented from the ruling.
Tariffs Affected by the Ruling
The Supreme Court's decision centers on Trump's utilization of the 1977 IEEPA law, which permits the president to "regulate" trade in response to a declared national emergency. Trump initially invoked this law in February 2025 to impose tariffs on goods from China, Mexico, and Canada, citing drug trafficking as an emergency justification.
In April 2025, Trump employed the same legal authority to introduce "reciprocal" tariffs ranging from 10% to 50% on imports from nearly all US trading partners. The administration argued that the US trade deficit constituted an "extraordinary and unusual threat" to national security.
A lower trade court had previously ruled in May that Trump exceeded his authority with these across-the-board levies and blocked most of them, though that decision had been paused pending appeal. The Supreme Court's ruling upholds that earlier decision, effectively invalidating the country-wide tariffs imposed under IEEPA authority.
Tariffs That Remain Unaffected
Importantly, the Supreme Court's judgment does not impact industry-specific tariffs imposed under Section 232 of the Trade Expansion Act of 1962, which were justified on national security grounds. These include existing duties on:
- Steel imports
- Aluminium imports
- Lumber imports
- Automotive imports
Several government investigations that could lead to additional sectoral tariffs remain underway, unaffected by Friday's ruling.
Economic Implications and Market Reaction
Economists suggest the Supreme Court's decision could substantially reduce the overall US tariff burden. Gregory Daco, chief economist at EY-Parthenon, had informed AFP ahead of the ruling that striking down the emergency tariffs would likely lower the average US tariff rate from 16.8% to approximately 9.5%.
However, Daco cautioned that "the relief may be temporary if the administration seeks alternative legal avenues to reimpose broad duties."
Financial markets responded positively to the verdict. Shortly after the announcement:
- The Dow Jones Industrial Average rose 207.03 points, or 0.42%, to 49,602.19
- The S&P 500 gained 33.44 points, or 0.52%, to 6,895.33
The ruling clarifies the boundaries of presidential authority in trade policy while maintaining existing sector-specific tariffs, creating a mixed landscape for international trade relations moving forward.
