In a historic ruling on Friday that will have a significant impact on the world economy, the U.S. Supreme Court handed a crushing loss to Republican President Donald Trump by overturning his broad tariffs, which he had sought under a law intended for use in times of national emergency.
In a 6-3 decision written by conservative Chief Justice John Roberts, the justices affirmed a lower court’s finding that Trump had overreached himself by using this 1977 statute. The International Emergency Economic Powers Act (IEEPA), the law in question, did not give Trump the authority he claimed to impose tariffs, the court decided.
“Our task today is to decide only whether the power to “regulate … importation,” as granted to the president in IEEPA, embraces the power to impose tariffs. It does not,” Roberts wrote in the ruling, quoting the statute’s text that Trump claimed had justified his sweeping tariffs.
Trump has leveraged tariffs – taxes on imported goods – as a key economic and foreign policy tool. They have been central to a global trade war that Trump initiated after he began his second term as president, one that has alienated trading partners, affected financial markets and caused global economic uncertainty.
Roberts, citing a prior Supreme Court ruling, wrote that “the president must ‘point to clear congressional authorization’ to justify his extraordinary assertion of the power to impose tariffs,” adding: “He cannot.”
Democrats and various industry groups hailed the ruling. Many business groups expressed concern that the decision will lead to months of additional uncertainty as the administration pursues new tariffs through other legal authorities. The ruling did not address the issue of the government refunding tariffs that were struck down.
The ruling sent U.S. stock indexes, long buffeted by Trump’s unpredictable moves on tariffs, up by the most in more than two weeks and weakened the dollar. Treasury yields edged higher.
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