Justices Limit Presidential Authority
The US Supreme Court on Friday struck down Donald Trump’s broad global tariffs, ruling that he exceeded his authority by invoking emergency powers. In a 6–3 decision, the court emphasized that the Constitution gives Congress — not the president — the power to levy taxes, including import tariffs. Chief Justice John Roberts wrote that the Framers “did not vest any part of the taxing power in the Executive Branch.” Justices Samuel Alito, Clarence Thomas, and Brett Kavanaugh dissented, arguing that while the tariffs might be controversial, they were legally justified.
Emergency Powers and Legal Battles
The ruling focused on Trump’s use of the International Emergency Economic Powers Act (IEEPA), a 1977 law that allows the president to declare a national emergency and take broad economic actions, such as sanctions. Trump was the first president to apply it to import tariffs, citing trade deficits and drug trafficking as national emergencies. His “reciprocal tariffs” affected nearly every US trading partner. Multiple lawsuits followed from states and small businesses, claiming that the law does not authorize tariffs and that Trump’s approach violated constitutional limits, echoing legal challenges that previously blocked programs like Biden’s student loan forgiveness plan.
Economic Impact and Market Reaction
The tariffs collected roughly $240 billion since April 2025, but refunds could cost around $120 billion, or 0.5% of GDP, according to Capital Economics. Justice Kavanaugh warned that processing refunds could become complicated. Markets reacted positively at first, with the S&P 500 rising as much as 1% before settling at about 0.3% higher. While the ruling restricts Trump’s use of emergency powers for tariffs, administration officials say other legal avenues remain for imposing duties. Investors expect ongoing legal and policy battles, as Trump continues to push his trade agenda despite the Supreme Court setback.
