WASHINGTON — The US Supreme Court dealt a major blow to President Donald Trump’s trade agenda Friday, ruling the tariffs he issued under the International Economic Emergency Powers Act are illegal.
In a 6-3 decision authored by Chief Justice John Roberts, the court said Congress alone holds the power to tax in almost all circumstances. The Trump administration’s argument that trade deficits and illegal drug imports granted it emergency power to levy tariffs was not justified, the court said. Tariffs are taxes on imported goods.
The Trump administration had argued that a provision in the law, known as IEEPA, that said the executive branch could “regulate” imports empowered the president to levy tariffs.
“Based on two words separated by 16 others (in the law) – ‘regulate’ and ‘importation’ – the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time,” Roberts wrote. “Those words cannot bear such weight.”
Justices Sonia Sotomayor, Elena Kagan, Neil Gorsuch, Amy Coney Barrett and Ketanji Brown Jackson joined Roberts’ opinion.
Justices Clarence Thomas and Brett Kavanaugh filed dissenting opinions. Thomas and Justice Samuel Alito joined Kavanaugh’s.
Kavanaugh’s dissent accepted the administration’s reading of the law and said it was not the justices’ role to decide a policy matter that has generated “vigorous” debate.
“The sole legal question here is whether, under IEEPA, tariffs are a means to ‘regulate … importation,’” he wrote. “Statutory text, history, and precedent demonstrate that the answer is clearly yes: Like quotas and embargoes, tariffs are a traditional and common tool to regulate importation.”
Arguments were heard in November
The justices heard arguments in early November in what was the first major case of the second Trump term to move beyond the court’s emergency docket and be heard on the merits of the case.
Small businesses and Democratic state attorneys general led the legal challenges against Trump’s tariffs in the two separate cases, consolidated before the Supreme Court. They alleged Trump usurped taxing power, which belongs to Congress as outlined in Article I of the Constitution.
Victor Schwartz, founder and president of the family-owned, New York-based wine and spirits importer VOS Selections led the small business plaintiffs, which included a Utah-based plastics producer, a Virginia-based children’s electricity learning kit maker, a Pennsylvania-based fishing gear company and a Vermont-based women’s cycling apparel company.
State attorneys general who sued included those from Arizona, Colorado, Maine, Minnesota, Nevada, New Mexico and Oregon.
Two Illinois-based toy makers that primarily manufacture products in Asia filed a separate challenge.
For nearly three hours on November 5, the justices dissected the language of the International Economic Emergency Powers Act, or IEEPA, a 1970s-era sanctions law that Trump invoked during the first year of his term in a series of emergency declarations and proclamations triggering import taxes on goods from nearly every country.
The high-profile case drew Cabinet officials to the court, including Treasury Secretary Scott Bessent, who sat shoulder-to-shoulder with Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer.
Members of Congress also attended. Among the crowded rows were US House Ways and Means Chairman Jason Smith, R-Mo., Sen. Mike Lee, R-Utah, and Democratic Sens. Amy Klobuchar of Minnesota and Ed Markey of Massachusetts.
‘Liberation day’
Trump began imposing tariffs under IEEPA via executive order in February and March on products from China, Canada and Mexico, declaring the countries responsible for illegal fentanyl smuggled into the United States.
The president escalated the emergency tariffs April 2, which he dubbed “liberation day,” when he declared trade imbalances a national emergency. In addition to a new baseline 10% global tariff, Trump announced hefty additional duties on products from countries that export more goods to the US than they import from U.S. suppliers.
The White House calculations baffled economists, as the administration proposed steep duties on close trading partners — including 20% on products from the European Union, 25% on South Korea, 32% on Taiwan and 46% on Vietnam.
Inexplicably he also announced a 50% tariffs on goods from the landlocked, 11,000-square-mile African nation of Lesotho, and 10% on the Heard and McDonald Islands, only inhabited by penguins and seals.
Trump’s announcement crashed markets, wiping trillions of dollars away in just a matter of days. He relented and delayed most of the tariffs, but escalated a trade war with China — shooting up the levy to 125%, and eventually to 145%.
The administration’s trade war with China cooled a bit in May, but left the rate on some products at an effective 55%.
Trump maintains his tariffs have forced the hand of other governments to invest in the US in exchange for lower tariffs. For example, Trump officials claimed victory in a framework deal with Japan that lowered duties on Japanese products to 15%, from 25%, with a promise from Japan to invest $550 billion in the U.S.
As recently as late August, Trump imposed an extra 25% tariff on goods imported from India, bringing the total tariffs on Indian products to 50%, because of the country’s usage of Russian oil.
In early August, Trump slapped a 40% tax on all Brazilian goods after he disagreed with the country’s prosecution of its former right-wing President Jair Bolsonaro for plotting a coup to remain in power in 2022.
This article, originally published by States Newsroom, is republished under a Creative Commons license.
