The US Supreme Court struck down Donald Trump's sweeping tariffs that he pursued under a law meant for use in national emergencies, handing a stinging defeat to the Republican president in a landmark opinion on Friday with major implications for the global economy.
The justices, in a 6-3 ruling authored by conservative Chief Justice John Roberts, upheld a lower court's decision that Trump's use of this 1977 law exceeded his authority. The justices ruled that the law at issue - the International Emergency Economic Powers Act, or IEEPA - did not grant Trump the power he claimed to impose tariffs.
"Our task today is to decide only whether the power to "regulate ... importation," as granted to the president in IEEPA, embraces the power to impose tariffs. It does not," Roberts wrote in the ruling, quoting the statute's text that Trump claimed had justified his sweeping tariffs.
Thousands of businesses won a hard-fought victory when the Supreme Court ruled to overturn the White House's emergency tariffs. The process of getting refunds has only just begun.
In a decision that could ripple throughout the global economy for years, the court ruled that Trump was not allowed to use the 1977 International Emergency Economic Powers Act to levy broad tariffs on imports.
The corporate world has spent months adjusting to Trump's often-evolving trade policy and his central use of tariffs for his agenda, not just to address trade issues but also as a cudgel against other governments' policies and actions.
Now, thousands of businesses - and not just those that sued the administration - will decide whether to pursue refunds, as it means more than $175 billion in US tariffs collected could be refunded, Penn-Wharton Budget Model economists said on Friday.
The White House had no immediate comment on the ruling. Democrats and various industry groups hailed the ruling. Many business groups expressed concern that the decision will lead to months of additional uncertainty as the administration pursues new tariffs through other legal authorities.
The ruling sent US stock indexes, long buffetted by Trump's unpredictable moves on tariffs, up by the most in more than two weeks and weakened the dollar. Treasury yields edged higher.
Justice Brett Kavanaugh, writing a dissent joined by fellow conservatives Clarence Thomas and Samuel Alito, wrote that the ruling did not necessarily foreclose Trump "from imposing most if not all of these same sorts of tariffs under other statutory authorities," adding that "the court's decision is not likely to greatly restrict presidential tariff authority going forward."
Part of the Supreme Court's majority also declared that such an interpretation would intrude on the powers of Congress and violate a legal principle called the "major questions" doctrine.
The conservative doctrine requires actions by the government's executive branch of "vast economic and political significance" to be clearly authorized by Congress. The court used the doctrine to stymie some of Democratic former President Joe Biden's key executive actions.
Roberts, citing a prior Supreme Court ruling, wrote that "the president must 'point to clear congressional authorization' to justify his extraordinary assertion of the power to impose tariffs," adding: "He cannot."
Roberts wrote that if Congress had intended IEEPA to bestow on the president "the distinct and extraordinary power to impose tariffs, it would have done so expressly - as it consistently has in other tariff statutes."
Trump has leveraged tariffs - taxes on imported goods - as a key economic and foreign policy tool. They have been central to a global trade war that Trump initiated after he began his second term as president, one that has alienated trading partners, affected financial markets and caused global economic uncertainty.
The Supreme Court reached its conclusion in a legal challenge by businesses affected by the tariffs and 12 US states, most of them Democratic-governed, against Trump's unprecedented use of this law to unilaterally impose the import taxes.
POWERS OF CONGRESS
The US Constitution grants Congress, not the president, the authority to issue taxes and tariffs. But Trump instead turned to a statutory authority by invoking IEEPA to impose the tariffs on nearly every U.S. trading partner without the approval of Congress. Trump has imposed some additional tariffs under other laws that are not at issue in this case. Based on government data from October to mid-December, those represent about a third of the revenue from Trump-imposed tariffs.
IEEPA lets a president regulate commerce in a national emergency. Trump became the first president to use IEEPA to impose tariffs, one of the many ways he has aggressively pushed the boundaries of executive authority since he returned to office in areas as varied as his crackdown on immigration, the firing of federal agency officials, domestic military deployments and military operations overseas.
Kavanaugh, who also was appointed by Trump during his first term as president, in a written dissent said that IEEPA's text, as well as history and prior Supreme Court rulings supported the Trump administration's position.
"Like quotas and embargoes, tariffs are a traditional and common tool to regulate importation," wrote Kavanaugh, whose dissenting opinion was joined by Thomas and Alito. "The tariffs at issue here may or may not be wise policy," Kavanaugh added. "But as a matter of text, history, and precedent, they are clearly lawful. I respectfully dissent."
Reuters
