Justices Limit Executive Authority
The US Supreme Court struck down Donald Trump’s sweeping global tariffs on Friday, ruling that he exceeded his authority by invoking emergency powers. In a 6–3 decision, the majority emphasized that the Constitution grants Congress — not the president — the power to levy taxes, including tariffs. Chief Justice John Roberts wrote that the Framers “did not vest any part of the taxing power in the Executive Branch.” Justices Samuel Alito, Clarence Thomas, and Brett Kavanaugh dissented, arguing the tariffs were legally defensible even if their policy merits were debated.
Emergency Powers and Legal Challenges
The ruling focused on Trump’s use of the International Emergency Economic Powers Act (IEEPA), a 1977 law that lets presidents declare national emergencies and impose sanctions or other economic measures. Trump became the first president to use it to justify broad import tariffs, which he framed as responses to trade deficits and drug trafficking concerns involving countries like Canada, China, and Mexico. A series of lawsuits followed, brought by Democratic-leaning states and small businesses, arguing that the emergency powers law does not authorize tariffs. Similar legal arguments had previously blocked initiatives like former President Biden’s student loan forgiveness program.
Economic Impact and Market Reaction
Since the tariffs began on April 2, 2025 — dubbed “Liberation Day” by Trump — the US Treasury has collected roughly $240 billion. Analysts estimate potential refunds could reach $120 billion, about 0.5% of GDP. Justice Kavanaugh warned in dissent that refund processing could become chaotic. Markets reacted positively to the decision, with the S&P 500 initially spiking 1% before gains stabilized. While the ruling restricts Trump’s use of emergency powers, officials note he could still impose tariffs under other laws, meaning the administration may continue to pursue its trade agenda despite the setback.
