Supreme Court rules most Trump tariffs illegal in major setback for economic agenda

Washington — The Supreme Court on Friday ruled President Trump does not have the authority to unilaterally impose sweeping tariffs on nearly every country under a federal emergency powers law, delivering a significant blow to the president’s signature economic policy.

The high court ruled that the International Emergency Economic Powers Act, or IEEPA, does not authorize the president to impose tariffs. The Supreme Court divided 6-3, with Chief Justice John Roberts delivering the opinion for the court. Justices Brett Kavanaugh, Clarence Thomas and Samuel Alito dissented.

“IEEPA contains no reference to tariffs or duties. The Government points to no statute in which Congress used the word ‘regulate’ to authorize taxation. And until now no President has read IEEPA to confer such power,” Roberts wrote in a portion of the decision joined by Justices Neil Gorsuch and Amy Coney Barrett. “We claim no special competence in matters of economics or foreign affairs. We claim only, as we must, the limited role assigned to us by Article III of the Constitution. Fulfilling that role, we hold that IEEPA does not authorize the President to impose tariffs.”

The legal battle over Mr. Trump’s tariffs marked the first in which the Supreme Court evaluated the legal merits of one of his second-term policies. The high court has allowed the president to enforce many of his plans temporarily while legal proceedings moved forward, but its decision invalidating Mr. Trump’s global tariffs is the most significant loss of his second term so far.

Trump’s tariffs

The court upheld a ruling from the U.S. Court of Appeals for the Federal Circuit that ruled Mr. Trump’s tariffs were illegal. The majority did not appear to address the issue of refunds for businesses who paid tariffs on imports.

In a dissenting opinion, Kavanaugh wrote that tariffs, like quotes and embargoes, are a “traditional and common tool” to regulate importation, which is a power specified in the IEEPA.

“The tariffs at issue here may or may not be wise policy,” Kavanaugh, joined by Thomas and Alito, wrote. “But as a matter of text, history and precedent, they are clearly lawful.”

While the ruling restricts the president’s ability to use IEEPA to set duties, it does not prevent the president from imposing tariffs under different trade authorities. Mr. Trump has already relied on other laws to slap levies on copper, steel and aluminum imports, as well as other products. 

Tariffs are a centerpiece of Mr. Trump’s economic agenda in his second term. The president has used the threat of levies to push trading partners to negotiate trade deals that are more favorable to the U.S. and has argued that they will help boost domestic manufacturing.

Trump says ruling is a “disgrace”

Reporters at the White House were waiting to enter a meeting between the president and the nation’s governors on Friday morning, but were sent back to the press area moments after the decision came down. 

During the meeting, the president said the ruling was a “disgrace” and that he has a backup plan, according to two sources familiar with his comments. 

The ruling comes four days before the president’s State of the Union address, where he is expected to tout the major accomplishments of his first year.

Ahead of the decision, Mr. Trump claimed that “our Country is financially, AND FROM A NATIONAL SECURITY STANDPOINT, FAR STRONGER AND MORE RESPECTED THAN EVER BEFORE.” He also warned that an adverse ruling would force the U.S. to pay back significant sums of money to importers, which would be “a complete mess, and almost impossible for our country to pay.”

The tariff lawsuits

The dispute before the Supreme Court involved two sets of duties that the president rolled out through a series of executive orders last year. Mr. Trump invoked IEEPA’s emergency powers to impose the tariffs, which he said were necessary to respond to “large and persistent” trade deficits and to stem the flow of illicit fentanyl and other drugs into the U.S. IEEPA had not been previously used to impose tariffs.

The first set of tariffs set an initial baseline rate of 10% on nearly every U.S. trading partner, as well as higher reciprocal rates on dozens of countries. The second tranche of levies targeted China, Canada and Mexico.

IEEPA authorizes the president to “regulate … importation” to deal with “any unusual and extraordinary threat” to national security, foreign policy or the U.S. economy. Mr. Trump argued that trade imbalances and the fentanyl coming into the country constituted such a threat.

The president announced the import taxes last February and in April, on what he called “Liberation Day.” Since then, the administration has announced framework trade agreements with more than a dozen countries and the European Union, and has said it is negotiating with many other nations.

Two sets of small businesses and a group of 12 states filed lawsuits in two different courts arguing that IEEPA doesn’t authorize Mr. Trump’s sweeping tariffs. Three lower courts have since ruled that the president did not have the power to unilaterally impose the global and trafficking-related tariffs under IEEPA.

Despite the losses in the lower courts, the Trump administration has kept collecting the import taxes as the court fight moved to the Supreme Court. The president has also continued to turn to IEEPA to impose new tariffs or change existing rates, including hitting Brazil with 40% tariffs on certain goods, though some have since been removed, and imposing 25% levies on imports from India as punishment for importing Russian oil.

In a part of his decision that was joined by Gorsuch and Barrett, Roberts wrote that under the government’s interpretation of IEEPA, the president is “unconstrained by the significant procedural limitations in other tariff statutes and free to issue a dizzying array of modifications at will.”

“All it takes to unlock that extraordinary power is a Presidential declaration of emergency, which the Government asserts is unreviewable. And the only way of restraining the exercise of that power is a veto-proof majority in Congress,” he wrote. “That view, if credited, would ‘represent[] a ‘transformative expansion” of the President’s authority over tariff policy, and indeed — as demonstrated by the exercise of that authority in this case — over the broader economy as well.”

The U.S. generated $195 billion in tariff revenue in fiscal year 2025, according to the Treasury Department, and $28 billion in January.

Scores of businesses from across the country have filed lawsuits challenging the legality of the duties. Major companies like Costco, Crocs and Revlon that have turned to the courts and have said they are seeking full refunds of the levies they’ve paid on imports as a result of the president’s policies.

Mr. Trump and administration officials have maintained that foreign producers pay most of the tariffs. But an analysis from the Federal Reserve Bank of New York released earlier this month found that nearly 90% of tariffs’ burden fell on U.S. companies and consumers last year. The New York Fed found that the average U.S. levy on imports jumped from less than 3% to 13% in 2025.