The US Supreme Court ruled on Friday that President Donald Trump overstepped his legal authority by implementing a series of global tariffs that disrupted international trade, effectively halting a primary instrument of his economic strategy.
In a six-to-three judgment, the conservative-led court determined that the International Emergency Economic Powers Act (IEEPA) does not grant the president the power to levy tariffs. Chief Justice John Roberts, writing the majority opinion, highlighted that the IEEPA contains no specific mention of tariffs or duties, reports AFP.
The court observed that had Congress intended to provide the “distinct and extraordinary power to impose tariffs” through this act, it would have done so explicitly, as it has in other trade-related statutes. The decision upholds previous lower court findings that the tariffs applied under the IEEPA were unlawful.
While Trump has traditionally used tariffs as a tool for negotiation, he made unprecedented use of emergency powers upon his return to the presidency last year to impose duties on nearly all US trading partners. These measures included “reciprocal” tariffs aimed at what Washington called unfair trade practices, as well as separate duties targeting Mexico, Canada, and China over issues involving immigration and illicit drug flows.
The ruling does not affect sector-specific duties previously imposed on imports such as steel and aluminium, and several government investigations that could lead to further sectoral tariffs remain ongoing.
The court’s three liberal justices joined three conservatives in the majority, while Justices Brett Kavanaugh, Clarence Thomas, and Samuel Alito dissented.
Gregory Daco, chief economist at EY-Parthenon, noted that the removal of these tariffs is expected to lower the average US tariff rate from 16.8 per cent to approximately 9.5 per cent. He also estimated a potential reduction in government revenue of between $100 billion and $120 billion.
However, Daco suggested the change might be temporary as the administration seeks alternative legal routes to reinstate broad duties. Erica York of the Tax Foundation remarked that while the ruling restricts the president’s ability to impose wide-ranging tariffs “on a whim,” other statutes remain available for more limited or investigation-based tariffs.
The justices did not clarify whether importers are eligible for refunds. In his dissent, Justice Kavanaugh cautioned that the process for issuing refunds could result in a “mess”.
