The U.S. Supreme Court ruled, 6-3, that the International Emergency Economic Powers Act does not give President Donald Trump the authority to impose tariffs, dealing a major blow to his trade agenda.
The decision blocks tariffs Trump imposed under the emergency powers law, including those announced on “Liberation Day” on April 2, as well as tariffs enacted in February targeting imports from Canada, China and Mexico.
Chief Justice John Roberts wrote the opinion, joined by Justices Sonia Sotomayor, Elena Kagan, Neil Gorsuch, Amy Coney Barrett and Ketanji Brown Jackson, emphasizing that the power to impose tariffs rests with Congress.
Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh dissented.
“The tariffs at issue here may or may not be wise policy. But as a matter of text, history, and precedent, they are clearly lawful,” Kavanaugh dissented.
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Ahead of the decision, Trump publicly warned of the consequences if the court ruled against him, writing on social media that the country would be “screwed” if the justices did not side with his administration.
The ruling aligns with two lower court decisions that also found the president lacks unilateral authority to impose tariffs under the emergency powers law.
Trump has repeatedly said the tariffs were generating billions of dollars for the U.S. economy and could be used to pay down the national debt. He also floated the idea of sending checks to Americans funded by tariff revenue, though that never happened.
Many of Trump’s critics argued the tariffs functioned as a tax on Americans, as numerous companies said they would be forced to raise prices because of the added costs.
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Economists at the Penn-Wharton Budget Model estimated that more than $175 billion in U.S. tariff collections could be at risk of refund if the tariffs are ultimately unwound. The estimate was produced at the request of Reuters.
The ruling does not address whether businesses or consumers will be refunded for tariffs already paid. In his dissent, Justice Brett Kavanaugh said unwinding the tariffs could be a “mess.”
Sen. Elizabeth Warren warned that large corporations could benefit more than consumers if refunds are issued.
"The Court has struck down these destructive tariffs, but there is no legal mechanism for consumers and many small businesses to recoup the money they have already paid," Warren said. "Instead, giant corporations with their armies of lawyers and lobbyists can sue for tariff refunds, then just pocket the money for themselves."
