WASHINGTON: The U.S. Supreme Court on Feb. 20 ruled 6-3 that President Donald Trump lacked authority under the International Emergency Economic Powers Act to impose sweeping import tariffs tied to national emergency declarations, striking down a central legal foundation for levies that reached across most U.S. trade. The decision held that the 1977 statute does not authorize the president to impose tariffs, underscoring that the Constitution assigns the power to levy duties to Congress and that any delegation of that authority must be clearly stated.
The case covered two sets of tariffs Trump issued soon after taking office in 2025, citing emergencies involving illegal drug trafficking and large trade deficits. Under the drug-trafficking orders, the administration imposed a 25% duty on most imports from Canada and Mexico and a 10% duty on most imports from China. Under the trade-deficit program described in the litigation as reciprocal tariffs, the administration imposed at least a 10% duty on all imports from all trading partners, with higher rates for dozens of countries, applying the measures alongside existing trade agreements.
In its opinion, the court said the government conceded the president has no inherent authority to impose tariffs during peacetime and relied solely on IEEPA. The majority concluded that reading IEEPA’s authorization to regulate importation as permission to impose tariffs would amount to an expansive transfer of Congress’s taxing power without the clear limits or language Congress typically uses when authorizing import duties. Chief Justice John Roberts announced the judgment, and Justices Neil Gorsuch, Amy Coney Barrett, Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson formed the majority.
How the cases reached the court
The ruling resolved consolidated disputes brought by importers and states challenging the tariffs. Learning Resources and another small business sued in federal district court in Washington, while V.O.S. Selections, several other small businesses and a group of states filed suit in the U.S. Court of International Trade, which hears many customs and tariff cases. The trade court entered judgment for the challengers, and the U.S. Court of Appeals for the Federal Circuit, sitting en banc, affirmed in relevant part. The Supreme Court affirmed the judgment in the V.O.S. Selections case and vacated the Learning Resources judgment, ordering dismissal for lack of jurisdiction.
The court record described a fast-moving tariff regime that changed repeatedly after the initial orders. The opinion recounted a series of executive actions that increased, reduced, suspended, and restructured rates, including steps that raised the tariff rate applied to many Chinese goods within the reciprocal framework and, at one point, brought the total effective tariff rate on most Chinese goods to 145% when combined with other duties. The court’s holding addressed the use of IEEPA as the statutory basis for those tariffs, not the broader question of whether Congress may authorize tariffs through other laws.
Dissent focuses on statute and practical fallout
Justice Brett Kavanaugh dissented, joined by Justices Clarence Thomas and Samuel Alito. The dissent said IEEPA’s language is best read to permit tariffs as one tool for regulating imports during a declared national emergency and criticized what it described as a distinction that would allow the president to restrict imports through quotas or embargoes but not condition imports on payment of a duty. The dissent also highlighted the operational complexity of unwinding tariff collections and the uncertainty surrounding refunds and administration of entries already processed through U.S. Customs and Border Protection.
Economists at the Penn Wharton Budget Model said the ruling could make up to $175 billion in collected duties subject to refund claims, reflecting their estimate of tariff receipts tied to the challenged emergency programs. The Supreme Court did not decide how any refunds should be handled, and the decision leaves further proceedings to the Court of International Trade and the executive agencies that administer the tariff system. The court’s opinion also emphasized that its decision did not address tariffs imposed under other statutes, focusing instead on whether IEEPA authorizes import tariffs in the first place – By Content Syndication Services.