The Supreme Court delivered a devastating blow to President Donald Trump's signature economic policy Friday morning, striking down his sweeping global tariffs in a 6-3 decision that affirms Congress—not the president—holds the constitutional power to tax.
Chief Justice John Roberts authored the majority opinion finding that the International Emergency Economic Powers Act (IEEPA), a 1977 law allowing presidents to regulate imports during emergencies, does not authorize the unilateral imposition of tariffs. The decision invalidates most of Trump's "Liberation Day" tariffs imposed in April 2025 and could trigger up to $175 billion in refunds to importers.
"The Framers did not vest any part of the taxing power in the Executive Branch," Roberts wrote in the opinion. "IEEPA's grant of authority to 'regulate . . . importation' falls short. IEEPA contains no reference to tariffs or duties."
The ruling represents the first time the Supreme Court has definitively rejected a major second-term Trump policy after allowing numerous controversial actions to proceed temporarily on the emergency docket.
The 6-3 Split and Conservative Fracture
The decision split the court along unusual lines, with Chief Justice Roberts joined by Justices Sonia Sotomayor, Elena Kagan, Ketanji Brown Jackson, Neil Gorsuch, and Amy Coney Barrett. Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh dissented.
The majority coalition is particularly notable for including two Trump appointees—Gorsuch and Barrett—demonstrating that even justices appointed by the president were unwilling to endorse what they viewed as executive overreach on constitutional taxing authority.
In his dissent, Justice Kavanaugh warned the decision would create a "mess" for the government, particularly regarding refunds. "Refunds of billions of dollars would have significant consequences for the U.S. Treasury," he wrote. "The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers."
However, Kavanaugh acknowledged the ruling is "not likely to greatly restrict Presidential tariff authority going forward," suggesting Trump can reimpose many tariffs under different statutory authorities with more specific congressional authorization.
Thomas and Alito did not write separate dissents, joining Kavanaugh's opinion.
What Tariffs Are Struck Down
The decision specifically invalidates tariffs imposed under IEEPA, which represented the majority of Trump's trade taxes:
Liberation Day Tariffs: The sweeping "reciprocal" tariffs Trump unveiled April 2, 2025, at a White House Rose Garden event he called America's "Liberation Day." These included a baseline 10% tariff on goods from most countries, with higher rates—reaching up to 145% on Chinese goods, though subsequently reduced—on nations Trump claimed had unfair trade practices.
Fentanyl-Related Tariffs: Separate IEEPA-based duties targeting Canada, China, and Mexico, which Trump justified by declaring a national emergency over the flow of the deadly drug fentanyl across U.S. borders. Canada faced a 25% tariff, later increased to 35%, while Mexico was hit with 25% duties.
According to Customs and Border Protection data from December 2025, the administration collected approximately $133.5 billion from IEEPA-based tariffs through mid-December, a figure believed to have reached $175 billion by now. The Penn-Wharton Budget Model estimates this represents the amount potentially subject to refunds.
What Tariffs Survive
Critically, the decision does not affect all of Trump's tariffs. Duties imposed under other legal authorities remain in place, including:
- Tariffs on steel and aluminum imports under Section 232 of the Trade Expansion Act of 1962, which addresses national security concerns
- Copper import duties under the same authority
- Any tariffs imposed under Section 301 of the Trade Act of 1974, which addresses unfair trade practices
- Duties enacted through other congressionally authorized trade laws
Treasury Secretary Scott Bessent and other top administration officials have indicated they expect to maintain the tariff framework by reimposing levies under these alternative authorities, though the process would be slower and subject to more constraints than IEEPA allowed.
Trump himself hinted at this strategy in a recent New York Times interview, suggesting he might repackage tariffs as "licensing fees" if the Supreme Court ruled against him.
The Constitutional Question
At the heart of Friday's ruling lies a fundamental question about separation of powers: Can the president use a law authorizing him to "regulate" imports to effectively tax them, or does the Constitution's explicit grant of taxing power to Congress prevent such executive action?
The Constitution's Article I, Section 8 states that "Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises." This clear textual assignment of taxing authority to the legislative branch formed the cornerstone of the plaintiffs' argument.
The Trump administration countered that IEEPA's language allowing the president to "regulate . . . importation" during declared national emergencies implicitly includes the power to impose tariffs. Solicitor General D. John Sauer argued during oral arguments that tariffs represented a form of regulation over foreign commerce rather than taxation.
However, the majority found this argument unpersuasive. Roberts emphasized that IEEPA "contains no reference to tariffs or duties" and that Congress has never used the word "regulate" in any statute to authorize taxation. When Congress wants to authorize tariffs, the majority reasoned, it does so explicitly through trade laws that specifically mention duties, set caps on rates, or establish review procedures.
The Lower Court Journey
Friday's decision upholds rulings from both the U.S. Court of International Trade (CIT) and the U.S. Court of Appeals for the Federal Circuit, which had blocked Trump's IEEPA tariffs after finding them illegal.
Lower court judges had pressed the Justice Department to explain why Trump invoked IEEPA when other, more narrowly tailored statutes enacted by Congress more specifically address tariffs—including laws that cap tariffs at certain levels or set timeframes subject to congressional review.
The Trump administration struggled to provide satisfactory answers, essentially arguing that IEEPA offered more flexibility and speed than traditional trade authorities. But this argument cut against the administration, as it suggested Trump was using emergency powers specifically to circumvent congressional constraints embedded in proper tariff laws.
The Plaintiffs: States and Small Businesses
The consolidated case before the Supreme Court combined challenges from multiple plaintiffs:
Twelve Democratic-led states argued that Trump's tariffs would harm their economies, residents, and businesses while exceeding presidential authority.
Small businesses from across the country—including companies selling plumbing supplies, educational toys, women's cycling apparel, and other imported goods—claimed the tariffs imposed crushing financial burdens and violated constitutional limits on executive power.
Neal Katyal, representing the small business plaintiffs, argued during November's oral arguments that only companies party to the lawsuit would be entitled to refunds if the Court ruled in their favor. Other businesses would need to file individual claims to recover tariff payments—a process Justice Barrett described as potentially "a mess."
The coalition "We Pay the Tariffs," representing over 800 small businesses nationwide, responded to Friday's ruling by demanding immediate refunds for tariffs already paid.
Trump's Apocalyptic Warnings
President Trump had characterized the case as existential for the American economy, warning repeatedly of catastrophic consequences if the Court ruled against him.
"If the Supreme Court rules against the United States of America on this National Security bonanza, WE'RE SCREWED!" Trump wrote on Truth Social on January 12.
He later called his import taxes "Country Saving Tariffs" and claimed they had generated revenues so substantial they could potentially replace income taxes or fund $2,000 "tariff dividend checks" for every American.
"We have taken in, and will soon be receiving, more than 600 Billion Dollars in Tariffs," Trump posted recently on Truth Social, though official government data shows much lower actual collections.
The Congressional Budget Office estimated the economic impact of Trump's tariffs at approximately $3 trillion over the next decade, though Friday's ruling will significantly reduce that figure by eliminating IEEPA-based duties.
The Refund Question
The most immediate practical consequence of Friday's ruling involves what happens to the estimated $175 billion already collected from now-invalidated IEEPA tariffs.
Justice Kavanaugh's dissent highlighted this as a major concern, warning that the majority opinion provides no guidance on "whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers."
Large corporations including Costco have already lined up in court demanding refunds. However, the legal process for recovering paid tariffs remains uncertain and will likely generate extensive litigation.
During oral arguments, Neal Katyal suggested that only plaintiffs in the case would automatically receive refunds, while other importers would need to file separate legal claims. This could create a complex, years-long process as thousands of businesses seek to recover millions or billions in tariff payments.
The Treasury Department has not indicated how or when it might process refund requests, and it remains unclear whether the administration will attempt to delay or complicate the refund process while simultaneously reimposing tariffs under different authorities.
Political and Economic Implications
Friday's ruling carries enormous political consequences for Trump, who made tariffs a centerpiece of both his 2024 campaign and his second-term economic agenda. The decision undermines his claims of sweeping executive authority and hands Democrats a significant talking point heading into the 2026 midterm elections.
Polling consistently shows tariffs lack broad public support, with voters expressing concern about how import taxes affect affordability and inflation. The Supreme Court's rejection of Trump's signature economic policy may reinforce these doubts and complicate Republican efforts to defend the president's economic record.
However, the decision's practical economic impact may be muted if the administration successfully reimpose similar tariffs under alternative legal authorities. Treasury Secretary Bessent has signaled this exact intention, suggesting the tariff framework will remain largely intact despite Friday's ruling.
For businesses and consumers, the outcome depends entirely on how quickly and extensively the administration can redeploy tariffs through other laws. If reimposition is swift and comprehensive, Friday's ruling may prove more symbolic than substantive in terms of actual trade policy.
Significance for Presidential Power
Beyond tariffs specifically, Friday's decision represents a significant check on presidential claims of emergency authority. Throughout both his terms, Trump has invoked emergency powers to circumvent congressional resistance to his agenda—from building a border wall to imposing trade levies.
The Supreme Court's rejection of IEEPA as a tariff authority signals that even this conservative Court—which Trump helped shape with three appointments—has limits on how far it will expand executive power, particularly when constitutional text explicitly assigns a power to Congress.
The decision may influence pending cases about presidential authority to fire officials at independent agencies and to end birthright citizenship, both of which involve constitutional questions about the scope of executive power.
Historical Context: First Major "No" to Trump
The tariff ruling marks the first time the Supreme Court has squarely rejected a major Trump second-term policy after full briefing and oral arguments. Previous Trump victories at the Court have largely come on the emergency or shadow docket, where the justices allowed policies to proceed temporarily while litigation continued in lower courts.
The distinction matters enormously. Emergency docket decisions often rely on procedural grounds—arguing that lower courts moved too quickly or that plaintiffs didn't exhaust administrative remedies—rather than definitively resolving the merits. These victories allow policies to take effect but preserve the possibility that courts might eventually strike them down after full consideration.
Friday's tariff decision, by contrast, follows the traditional Supreme Court process: lower court rulings, appeals, full briefing, oral arguments, and a merits-based decision. The Court had every opportunity to carefully consider Trump's arguments and chose to reject them decisively.
University and Academic Community Impact
The tariff ruling has implications for higher education institutions that import educational materials, scientific equipment, technology, and other goods subject to Trump's now-invalidated duties. Universities may be able to recover some costs through the refund process, though the mechanics remain unclear.
More broadly, the decision provides a valuable case study for law schools, political science departments, and public policy programs studying separation of powers, emergency authorities, trade policy, and executive overreach. The case demonstrates how constitutional structure constrains even popular presidents backed by aligned courts.
Research institutions that depend on international collaboration and equipment imports will watch closely to see whether and how quickly the administration reimpose tariffs under alternative authorities, as this affects budgeting and planning for expensive scientific instruments and research materials.
What Happens Next
In the immediate aftermath of Friday's ruling, several processes will unfold simultaneously:
Refund Litigation: Companies that paid IEEPA tariffs will begin filing claims for refunds, either through administrative processes or court actions. This will likely generate extensive litigation over eligibility, calculation methods, and timing.
Tariff Reimposition: The administration will work to reimpose tariffs using alternative statutory authorities. This process will be slower and more constrained than IEEPA allowed, but may ultimately achieve similar results.
Congressional Response: Democrats will likely introduce legislation to constrain presidential tariff authority further, while Republicans may seek to expand it. Neither is likely to pass in a divided Congress, but the debate will shape 2026 campaign messaging.
International Reactions: Trading partners will assess whether and how U.S. trade policy changes in response to the ruling. Some may seek to renegotiate trade terms while uncertainty persists.
The Long View
Friday's Supreme Court decision striking down Trump's IEEPA tariffs will be remembered as a defining moment in the ongoing struggle over presidential power in the American constitutional system.
The ruling affirms that even in an era of expansive executive claims and sympathetic courts, fundamental constitutional principles—like Congress's exclusive power to tax—still impose meaningful limits on what presidents can do unilaterally.
Whether this proves a lasting constraint or merely a temporary obstacle depends on how successfully the Trump administration adapts its approach to achieve similar policy outcomes through different legal mechanisms.
© 2026 HNGN, All rights reserved. Do not reproduce without permission.
