Justices Rein In Presidential Power
The Supreme Court of the United States has struck down former President Donald Trump’s sweeping global tariff plan, ruling that he exceeded his authority by using emergency powers to impose import taxes.
In a 6-3 decision, the court found that the Constitution clearly grants Congress — not the president — the power to levy taxes, including tariffs. Writing for the majority, Chief Justice John Roberts stated that the nation’s founders did not assign any part of that taxing authority to the executive branch.
Justices Samuel Alito, Clarence Thomas and Brett Kavanaugh dissented. Kavanaugh argued that whether the tariffs were wise policy was beside the point, insisting they were lawful based on text and precedent.
The ruling marks the first major pillar of Trump’s broader agenda to be squarely rejected by the nation’s highest court — a bench he helped shape with three appointments during his first term.
The Legal Fight Over Emergency Powers
At the heart of the case was Trump’s use of the International Emergency Economic Powers Act (IEEPA), a 1977 law allowing presidents to regulate economic activity during national emergencies. While previous administrations used the law primarily for sanctions and asset freezes, Trump became the first to apply it to impose broad import taxes.
In April 2025, he introduced what he called “reciprocal tariffs” on most US trading partners, framing trade deficits as a national emergency. The move followed earlier tariffs on Canada, China and Mexico, which he linked to concerns over drug trafficking.
The decision does not completely block the possibility of new tariffs. The administration could still turn to other trade laws, though those come with tighter limits on scope and speed.
Legal opposition to the tariffs cut across party lines. A coalition of states — many led by Democrats — joined small businesses and industry groups in challenging the policy. Critics argued that the emergency law did not authorize tariffs and failed established constitutional tests.
Economic Stakes and Market Reaction
The economic impact of the tariffs has been significant. The Congressional Budget Office estimated they could cost roughly $3 trillion over the next decade. Federal data showed that more than $133 billion had already been collected under the emergency measures by December, with total tariff revenue since April 2025 reaching about $240 billion.
Now, questions loom over potential refunds. Analysts at Capital Economics estimate that repayments could reach $120 billion — about 0.5% of US GDP — if courts order the government to return funds. Justice Kavanaugh, in his dissent, warned that sorting out repayments could become a “mess.”
Financial markets initially reacted positively. The S&P 500 rose as much as 1% shortly after the decision was announced, though gains later eased.
Trump had previously described the case as one of the most important in US history, warning that an adverse ruling would trigger massive repayments and damage the economy. While the court’s decision curbs his use of emergency powers, it leaves open the likelihood that tariff battles — both legal and political — are far from over.
