In a landmark rebuke to executive power, the US Supreme Court on Friday ruled that President Donald Trump exceeded his legal authority when he invoked a 1977 emergency law to impose sweeping global tariffs, a move that ignited a far-reaching trade war and drove up costs for American consumers and businesses.
In a 6-3 decision authored by Chief Justice John Roberts, the court concluded that the International Emergency Economic Powers Act (IEEPA) does not grant the president unilateral authority to impose tariffs.
“Nothing in the text” of the statute, Roberts wrote, “enables the president to unilaterally impose tariffs.” He added pointedly: “And needless to say, without statutory authority, the president’s tariffs cannot stand.”
The case, Learning Resources, Inc. v. Trump, centered on whether Trump could rely on IEEPA — a law historically used to impose sanctions and freeze assets during national emergencies — to justify broad import taxes on goods from countries around the world. The majority found that while IEEPA grants the president significant economic powers during emergencies, it does not specifically authorize tariffs, which are traditionally governed by other trade statutes passed by Congress.
Justices Clarence Thomas, Brett Kavanaugh, and Samuel Alito dissented. In his dissent, Kavanaugh underscored that the ruling does not directly address the question of whether businesses or consumers are entitled to refunds for tariff costs already paid — a matter likely to spur further litigation.
The decision deals a major blow to Trump’s second-term tariff regime, which he placed at the center of his economic agenda despite repeated warnings from economists that sweeping import taxes would raise prices for American households and strain domestic industries dependent on global supply chains.
According to an analysis released by congressional Democrats shortly after the ruling, the average US family has paid more than $1,700 in additional costs since the start of Trump’s second term due to higher prices linked to tariffs. Those increased costs have been felt across a range of goods, from groceries and clothing to electronics and household appliances.
While businesses that paid tariffs may now be eligible to seek refunds, the path forward remains murky. Refund claims are expected to take months or even years to process, and there is no guarantee that companies will pass along any recovered funds to consumers who absorbed higher retail prices.
“Any consumer looking for relief from tariff-driven price hikes did not find it at the Supreme Court today,” said Alex Jacquez, chief of policy and advocacy at the Groundwork Collaborative. “The economic damage Trump has already done to business investment, manufacturing, and working families’ budgets will linger for years to come.”
Jacquez added that even if businesses eventually receive refunds, the impact on household budgets may be irreversible. “Refunds for impacted businesses will take months or even years to process, and there is little reason to believe companies will pass those savings on to consumers,” he said. “Trump must set aside his erratic tariff policy and instead pursue a trade agenda that protects workers, supports manufacturers, and doesn’t punish consumers.”
The Supreme Court’s ruling affects most of the tariffs imposed during Trump’s second term. According to reporting by NBC News, the decision “upends his tariffs in two categories.” The first involves so-called “reciprocal” tariffs imposed on a country-by-country basis, including duties as high as 34% on goods from China and a 10% baseline tariff on imports from most other nations.
The second category includes a 25% tariff on certain goods from Canada, China, and Mexico. The administration had justified those tariffs by claiming the countries failed to adequately curb the flow of fentanyl into the United States.
Beyond raising prices, critics argue the tariffs failed to achieve their stated economic objectives. Despite the aggressive import taxes, the US trade deficit remained high, and manufacturing jobs continued to decline. During Trump’s first year back in office, manufacturing employment reportedly fell by an estimated 108,000 jobs, undercutting the administration’s promise that tariffs would revive domestic industry.
Legal scholars say the ruling reinforces Congress’s constitutional authority over trade. Under Article I of the Constitution, Congress holds the power to “lay and collect Taxes, Duties, Imposts and Excises.” While lawmakers have delegated certain trade authorities to the executive branch over time, the court signaled that such delegations must be clearly grounded in statutory text.
The decision may not mark the end of Trump’s tariff efforts. Anticipating a potential defeat at the high court, administration officials had reportedly been exploring alternative statutory avenues for imposing import restrictions.
Lori Wallach, director of the Rethink Trade program at the American Economic Liberties Project, said the ruling may have limited immediate impact on overall tariff policy.
“This decision is unlikely to alter US tariff rates or policies much because there are other statutes that could provide broad authority for Trump to impose tariffs,” Wallach said.
She pointed to Section 122 of the Trade Act of 1974, which explicitly authorizes a president to impose tariffs of up to 15% for up to 150 days on any and all countries in response to “large and serious” balance-of-payments issues — language that could be invoked in light of the persistent US trade deficit.
“Section 122 does not require investigations or impose other procedural limits,” Wallach observed, suggesting that the administration could act swiftly if it chose to rely on that authority.
Indeed, hours after the court handed down its ruling, Trump announced he would continue pursuing a tariff regime, signaling that the legal setback would not deter his broader trade strategy.
On Capitol Hill, reaction to the ruling fell largely along party lines. US Rep. Brendan Boyle (D-Pa.), the ranking member of the House Budget Committee, welcomed the decision as a necessary check on executive overreach.
“This ruling reaffirms that no president is above the law and that Congress retains the power of the purse,” Boyle said in a statement. However, he warned that “Trump will try to do this again another way, because he is intent on continuing his unhinged economic sabotage.”
Republican lawmakers, meanwhile, defended the president’s use of emergency powers as a necessary response to what they describe as unfair trade practices and a growing trade imbalance.
The case is likely to have far-reaching implications for the balance of power between Congress and the White House in trade policy. By drawing a clear line around the limits of IEEPA, the court signaled that even in matters of economic emergency, presidential authority must be anchored firmly in statutory text.
For businesses and consumers, however, the immediate outlook remains uncertain. Companies that relied on global supply chains face the prospect of recalculating their cost structures yet again, while households grappling with higher prices may see little immediate relief.
As legal battles over refunds and alternative tariff authorities unfold, the Supreme Court’s ruling stands as a pivotal moment in the ongoing debate over trade, executive power, and the economic direction of the United States.
