The Supreme Court struck down President Donald Trump’s far-reaching global tariffs on Friday, handing him a significant loss on an issue crucial to his economic agenda.
The 6-3 decision centers on the tariffs Trump unilaterally imposed under an emergency powers law, including the sweeping “reciprocal” tariffs levied on nearly every other country.
It’s the first major piece of Trump’s broad agenda to come squarely before the nation’s highest court, which he helped shape with the appointments of three conservative jurists in his first term.
The majority found that the Constitution “very clearly” gives Congress the power to impose taxes, which include tariffs. “The Framers did not vest any part of the taxing power in the Executive Branch,” Chief Justice John Roberts wrote.
“The tariffs at issue here may or may not be wise policy. But as a matter of text, history, and precedent, they are clearly lawful,” Kavanaugh wrote in the dissent.
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The court majority did not address whether companies could get refunds
Companies have collectively paid billions in tariffs. Many companies, including the big-box warehouse chain Costco, have already lined up for refunds in court, and Kavanaugh noted the process could be complicated.
“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. But that process is likely to be a ‘mess,’ as was acknowledged at oral argument,” Justice Kavanaugh wrote in the dissent.
Small businesses hope for a quick refund
We Pay the Tariffs, a coalition of more than 800 small businesses that has been advocating against the tariffs, said a process for refunding the tariffs is imperative.
“A legal victory is meaningless without actual relief for the businesses that paid these tariffs,” executive director Dan Anthony said in a statement. “The administration’s only responsible course of action now is to establish a fast, efficient, and automatic refund process that returns tariff money to the businesses that paid it.”
‘Welcome news for American importers’
Scott Lincicome, at Cato’s Herbert A. Stiefel Center for Trade Policy Studies said the Supreme Court’s decision “is welcome news for American importers” and the U.S. economy, however “the federal government must refund the tens of billions of dollars in customs duties” that it collected pursuant to its perceived International Emergency Economic Powers Act power authority that the court says it does not have.
“That refund process could be easy, but it appears more likely that more litigation and paperwork will be required,” Lincicome said.
No immediate White House response
Trump had been steeling himself for the possibility that the Supreme Court could reject his power to declare an emergency and impose tariffs — but the White House stayed conspicuously quiet in the roughly 20 minutes after the court ruled against Trump.
The ruling delivered a colossal blow to Trump’s belief that he could impose import taxes without needing to go through Congress, adding to the chaos that Trump’s back and forth over tariffs since his return to the White House have provoked.
The president has previously said that losing the case would derail the U.S. economy and cause the budget deficit to explode without the tariff revenues.
Small business group applauds ruling
The CAMEO Network, a small business organization, praised the Supreme Court’s ruling Friday.
“Tariffs are holding back U.S. manufacturing, driving up costs for businesses and consumers, and slowing our economy,” said Carolina Martinez, CEO of CAMEO. “Our hope is that this ruling provides relief for business owners who have been navigating supply chain shocks and uncertainty over the past year.”
Previous rulings from the emergency docket
The Supreme Court ruling comes despite a series of short-term wins on the court’s emergency docket that have allowed Trump to push ahead with extraordinary flexes of executive power on issues ranging from high-profile firings to major federal funding cuts.
US stocks hold relatively steady
U.S. stocks are edging higher in tentative trading after the Supreme Court struck down President Trump’s sweeping tariffs, which had been a source of volatility for the market.
The S&P 500 was 0.1% higher a few minutes after the court announced its ruling. It had been drifting between small gains and losses earlier in the morning, after discouraging reports showing slowing growth for the economy and faster inflation created relatively few ripples in the market.
The Dow Jones Industrial Average added 20 points, or less than 0.1%, and the Nasdaq composite rose 0.1%. Treasury yields also remained fairly muted in the bond market.
Can Trump still impose tariffs?
Yes, but not under the fast-acting law he previously used. Top administration officials have said they expect to keep the tariff framework in place under other authorities, though alternative laws carry greater limitations on the speed and severity of Trump’s actions.
What was the impact of Trump’s tariffs?
They were estimated to have an economic impact of some $3 trillion over the next decade, according to the Congressional Budget Office.
What did each side argue?
The Justice Department argued that a 1977 law allowing the president to regulate imports during emergencies also includes setting tariffs. The challengers argued that the law doesn’t even mention tariffs and that Trump’s use of it fails several legal tests, including one that doomed then-President Joe Biden’s $500 billion student loan forgiveness program.
The chief justice and 2 Trump appointees ruled against the president’s tariffs
Chief Justice John Roberts wrote the court’s majority opinion, joined by Justices Neil Gorsuch and Amy Coney Barrett, two of Trump’s three Supreme Court picks. The three liberal justices were also part of the majority.
Justice Brett Kavanaugh, Trump’s other appointee, wrote the main dissent, joined by Justices Clarence Thomas and Samuel Alito.
