In a major setback to Donald Trump’s aggressive trade policy, the US Supreme Court on Friday struck down his sweeping global tariffs, ruling that the former president exceeded his legal authority.
The 6-3 decision marks a significant defeat for Trump’s strategy of using tariffs as a tool of economic and geopolitical pressure, a policy that had sparked uncertainty across global markets and strained relations with key allies.
Chief Justice John Roberts, writing the majority opinion, stated that Trump had acted beyond the powers granted to him under US law. The ruling centres on Trump’s use of the International Emergency Economic Powers Act (IEEPA) of 1977, which he invoked to impose broad tariffs on imports from nearly all trading partners without congressional approval.
The US Constitution clearly grants Congress the authority to levy taxes and tariffs, and Roberts noted that any extraordinary claim of presidential power requires explicit authorisation from lawmakers — something Trump did not have. The court also clarified that the IEEPA was historically intended for targeted sanctions and asset freezes, not for sweeping global trade taxes.
Billions in Potential Refunds
The legal challenge was brought by 12 US states and multiple businesses, who argued that the tariffs represented an unprecedented overreach of executive power. Economists estimate that the US government could be forced to refund more than $175 billion collected under the programme.
However, the ruling does not clarify whether companies will automatically receive refunds, leaving further legal battles likely. Several firms, including retail giant Costco, have already filed lawsuits seeking reimbursement.
Trump’s Next Move
Trump has signalled he will pursue alternative legal routes to continue his trade agenda. His administration is reportedly exploring other laws related to national security and unfair trade practices to maintain certain tariffs.
Experts warn that these alternative mechanisms may be slower and less flexible, making it difficult to replicate the scale and speed of Trump’s original tariff policy.
The 6-3 Vote Explained
In an unusual alignment, liberal justices Ketanji Brown Jackson, Elena Kagan, and Sonia Sotomayor joined conservative justices John Roberts, Amy Coney Barrett, and Neil Gorsuch in the majority.
Justices Samuel Alito, Clarence Thomas, and Brett Kavanaugh dissented. Kavanaugh argued that while the tariffs may be controversial, they were legally permissible under existing precedents. He also warned that refunding the collected tariffs could become a complicated and chaotic process.
The ruling significantly limits the president’s ability to use emergency powers to reshape global trade policy, marking a turning point in US trade governance.