Supreme Court strikes down Trump’s tariffs in major setback for president

WASHINGTON − The Supreme Court dealt a major blow to President Donald Trump’s economic agenda, ruling that he does not have the authority to impose sweeping tariffs at the stroke of a pen.

The court on Feb. 20 tossed the tariffs that are the centerpiece of his economic policy and a major foreign policy tool – but that have also raised costs for consumers and businesses. It is the first major ruling against Trump’s controversial expansive view of presidential power.

“The President asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope,” Chief Justice John Roberts wrote in the 6-3 opinion. “In light of the breadth, history, and constitutional context ​of that asserted authority, he must identify clear congressional authorization to exercise it.”

Trump, Roberts concluded, cannot.

‘They are clearly lawful’

In a dissent joined by Justices Clarence Thomas and Samuel Alito, Justice Brett Kavanaugh called tariffs a “traditional and common tool to regulate importation” that the law gives to the president.

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

And he said the majority’s decision “says nothing” about whether and how the government must return the billions of dollars already collected.

That process, Kavanaugh said, will likely be a “mess.”

Tariffs struck down

The decision could quiet some critics who’ve complained that the court – which has a 6-3 conservative majority – has allowed Trump ‌to make major policy moves without authorization from Congress after it blocked big initiatives of President Joe Biden, a Democrat.

Trump ​had been counting on the tariffs to boost the federal budget by more than $2 trillion over the next decade and bring manufacturing back to the United States.

The president had warned the court that striking down his tariffs would have “catastrophic consequences for our national security, foreign policy and the economy.”

But administration officials have also noted they have alternate means of imposing import fees and promised to move quickly to use them.

That means the uncertainty about operating costs is likely to persist for retailers and other businesses even as they celebrate the decision that Trump can’t use a 1977 emergency powers law to sidestep a ⁠more complex and limited tariffs process laid out in other laws.

Tariffs are paid by companies when they import goods from other countries. In anticipation of ‌the ruling, thousands of companies filed lawsuits to try to obtain refunds.

Foreign business ‌leaders say tariff ruling could bring more uncertainty

Foreign leaders reacted warily to the decision because the Trump administration could impose tariffs in other ways than declaring emergencies. One statute permits tariffs on imports that threaten national security and another would allow retaliatory tariffs against countries that send the United States more goods than they import.

Candace Laing, president ⁠and CEO of the Canadian Chamber of Commerce, said the decision was a legal ruling, not a reset of U.S. trade policy.

“Canada should prepare for new, blunter mechanisms to be used to reassert trade pressure, potentially with broader and more disruptive effects,” Laing said in a statement.

William Bain, head of trade policy at the British Chambers of Commerce, said different legislation was used to impose U.S. tariffs ‌on steel and aluminum.

“While this decision gives clarity on the President’s executive powers ‌to raise tariffs it does little to clear the murky waters for business,” Bain said in a statement.

Trump relied on emergency law

The 1977 International Emergency Economic Powers Act, passed after the Watergate scandal during a time when Congress wanted to reign in executive power, has historically been used to impose economic sanctions and other penalties on foreign countries. But the administration argued that the authority the law gives presidents to “regulate” importation ⁠in response to an “unusual and extraordinary threat” includes the power to impose tariffs.

Beginning in early 2025, Trump used the law to impose tariffs on almost all goods imported into ​the United States to reduce persistent trade deficits, which he says have hollowed out ⁠the nation’s manufacturing ​base.

Trump used other tariffs he imposed on goods imported from Mexico, Canada and China as leverage to get those countries to do more to stop fentanyl from coming into the United States.

Small businesses took on Trump

Multiple small businesses and a dozen states with Democratic attorneys general sued the administration.

They argued that Trump stretched the word “regulate” beyond its plain meaning. If “regulate” means “tax,” they said, then a president “could tax everything from autos to zoos,” even though the Constitution gives Congress the power to raise revenue.

During the November oral arguments, the Justice Department described the tariffs as “regulatory,” imposed ⁠for foreign and domestic policy reasons rather than to boost the government’s coffers. But Trump had also bragged about tariffs being a substantial revenue raiser.

Still, the administration argued that Congress wanted presidents to have major power over international trade during an emergency and that’s appropriate because the Constitution gives presidents broad authority in foreign affairs.

Roberts, however, said that when Congress has delegated its tariff powers, it has done so in explicit terms, and subject to strict limits.

“What common sense ⁠suggests, congressional practice confirms,” he wrote.

The court’s three liberals – Justices Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson – did not agree with the full reasoning of Roberts’ opinion.

In a separate opinion, Kagan wrote for the trio that the tariffs can be invalidated based on the text of the statute alone. The liberal justices did not back Roberts’ use of the “major questions” legal theory, which prevents the executive branch from taking actions that have a major impact on the economy or are a matter of great “political significance” without clear authorization from Congress.

That principle was used by ⁠the court to block Biden’s attempt to forgive $400 billion in student loan debt.

The court likewise ‌previously ruled Biden couldn’t extend an eviction moratorium tied to the COVID-19 pandemic and the Environmental Protection Agency could not regulate power plant emissions that contribute to ​climate change.

“We have long expressed `reluctance to ‌read into ambiguous statutory text’ extraordinary delegations of Congress’ powers,” Roberts wrote in citing those past rulings in the tariffs decision.

Lower courts sided with the challengers, although the U.S. Court of Appeals for ​the Federal Circuit was divided.

Polls consistently show that the tariffs are unpopular.

The cases of Learning Resources v. Trump and Trump v. V.O.S. Selections were the first time a challenge to a policy Trump enacted during his second term got a full hearing at the Supreme Court. Until deciding those cases, the justices had issued only interim decisions about whether Trump’s policies could remain in effect while they’re being litigated. In those temporary rulings, Trump has been overwhelmingly successful.