Justices Limit Presidential Power
The US Supreme Court on Friday struck down Donald Trump’s sweeping global tariffs, ruling that the president exceeded his authority by using emergency powers to impose them. The 6–3 decision focused on tariffs applied under the International Emergency Economic Powers Act (IEEPA), including the broad “reciprocal” duties Trump levied on nearly every US trading partner. Chief Justice John Roberts wrote that the Constitution “very clearly” assigns taxing power to Congress, not the executive branch. Justices Samuel Alito, Clarence Thomas, and Brett Kavanaugh dissented, with Kavanaugh arguing the tariffs were legally justified despite policy debates.
Legal Challenges and Emergency Powers
Trump’s administration had relied on the 1977 IEEPA, which allows presidents to declare a national emergency and impose sanctions or other economic measures. While previous presidents used the law mostly for sanctions, Trump was the first to apply it to broad import tariffs, citing trade deficits and drug trafficking concerns. Legal challenges quickly followed from a dozen largely Democratic-leaning states and numerous small businesses, arguing that the law does not authorize tariffs and that the administration’s actions failed established legal tests.
Economic Impact and Market Reaction
The tariffs had generated roughly $240 billion in revenue since April 2025, when Trump launched his “Liberation Day” plan. Analysts estimate that potential refunds could total around $120 billion, roughly 0.5% of US GDP. Companies including Costco have already filed lawsuits seeking reimbursement. Markets initially reacted positively, with the S&P 500 spiking near 1% after the ruling, though gains later moderated. While the decision constrains Trump’s use of emergency powers for tariffs, officials note he could still impose duties under other laws, leaving the broader trade agenda and potential market impacts in play.
