The Supreme Court shook up the US trade landscape on Friday when it struck down the centerpiece of President Trump’s second-term tariff agenda, ruling 6-3 that his blanket tariffs were illegal.
The ruling came just over a year into Trump’s second term and after skeptical questions from key justices during oral arguments last November. It looks set to immediately halt a massive chunk of Trump’s tariffs, which were announced last year on “Emancipation Day,” using a 1977 law called the International Emergency Economic Powers Act (IEEPA).
“The IEEPA does not authorize the President to impose tariffs,” said the decision, written by Chief Justice John Roberts.
In his first response on Friday, Trump attacked the high court, particularly the majority justices, saying they were a “disgrace to our nation.” He suggested that the administration would pursue alternative methods to implement its trade goals.
His first move: imposing a 10 percent “global tariff” under Section 122 of the Trade Act of 1974. That statute allows the president to impose tariffs of up to 15 percent for up to 150 days to address trade deficits. However, this authority was never used to impose tariffs.
The ruling also raised the issue of refunds, which could return more than $100 billion to importers in the coming months. It supports two lower courts — including the U.S. Court of International Trade — that previously found Trump lacked the authority to impose global tariffs using the 1977 law.
The decision will have far-reaching ramifications, affecting global trade, consumers, businesses, inflation and every American’s pocketbook. In recent weeks, Trump has already made plans to cut some metals tariffs, including steel and aluminum products, as he and his administration try to battle an affordability crisis ahead of the midterm elections.
Read more: What Trump promised with his “Deliverance Day” tariffs — and what he delivered
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The US Supreme Court overturned Trump’s tariffs
The US Supreme Court changed the US trade agenda on Friday, ruling that blanket tariffs are illegal and striking down President Trump’s highest tariffs.
In a 6-3 decision, the court held that the International Emergency Powers Act of 1977 (IEEPA) does not give Trump the authority to impose tariffs without congressional approval.
This ruling will mean that much of the administration’s current tariff agenda will be halted, particularly those tariffs first announced last April in what has come to be known as Trump’s “Deliverance Day” tariffs.
Today, Penn-Wharton economists said more than $175 billion in tariff revenue could have to be returned if the Supreme Court rules against Trump’s tariffs.
However, according to SCOTUSblog, the court said nothing about whether the government should move to return the billions of dollars it has earned from importers.
Justices Clarence Thomas, Brett Kavanaugh and Samuel Alito all dissented.
Judge Kavanaugh, in his dissent, said, “The United States could be required to repay billions of dollars to importers who have paid IEEPA tariffs, even though some importers may have already passed the costs on to consumers or others.”
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Italian exports to US rise 7% in 2025 despite Trump tariffs
Reuters reports:
Read more here.
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