CNN
The Supreme Court ruled Friday that President Donald Trump violated federal law by imposing blanket tariffs unilaterally around the world, a major loss for the White House on an issue that has been central to the president’s foreign and economic policies.
This decision is perhaps the most significant loss the second Trump administration has suffered from the conservative Supreme Court. The Supreme Court repeatedly sided with the president last year in a series of emergency rulings on immigration, firing independent agency leaders and sharply cutting government spending.
Chief Justice John Roberts wrote the majority opinion, and the court agreed 6-3 that the tariffs exceeded the law. But the court did not say what to do with the more than $130 billion in duties already collected.
“The President asserts extraordinary authority to unilaterally impose tariffs of unlimited amount, duration, and scope,” Roberts wrote to the court. “Given the breadth, history, and constitutional context of that asserted power, the president must identify clear Congressional authorization to exercise it.”
The court said the emergency authorities Trump sought to rely on were “inadequate.”
Justices Amy Coney Barrett and Neil Gorsuch joined Roberts and the three liberal justices in the majority. Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh dissented.
Roberts’ opinion dismissed the administration’s argument that the president has the authority to use tariffs to regulate trade. This was an issue that came up during oral arguments last year, when President Trump suggested he had inherent authority to impose tariffs.
“When Congress authorizes tariffs, it does so with clear and deliberate constraints,” Roberts wrote. “That didn’t happen here either.”
“We do not claim to have special competence in economic or foreign affairs,” Roberts wrote. “We rightly claim only the limited role assigned to us by Article III of the Constitution. To fulfill that role, we argue that IEEPA does not authorize the President to impose tariffs.”
It is not clear how the money will be returned
The 6-3 majority gave no clarity on the specific practical issue of what the administration would do with the money it had already raised through President Trump’s tariffs.
As of Dec. 14, the federal government collected $134 billion in revenue from tariffs that are being challenged by more than 301,000 different importers, according to U.S. Customs and Border Protection data and recent federal filings with the U.S. Court of International Trade.
The issue will likely need to be resolved in a lower court.
In a dissenting opinion, Justice Brett Kavanaugh noted that the court said “nothing today about whether or how the government should return the billions of dollars it has collected from importers.”
The issue of repayments figures prominently in the case, with Trump administration officials saying any potential repayments could have a devastating impact on the U.S. economy.
“The process will likely be ‘chaotic,'” Kavanaugh wrote.
The most important event for the US economy in years
The case, which questions the legality of President Trump’s “Emancipation Day” tariffs and the tariffs he imposed on imports from China, Mexico and Canada, is the most important case concerning the U.S. economy to reach the Supreme Court in recent years. At stake are tens of billions of dollars in revenue already collected by the government.
So-called “reciprocal” tariffs would increase tariffs by up to 50% on major trading partners, including India and Brazil, and up to 145% on China, starting in 2025.
President Trump and Justice Department officials framed the dispute in terms of national survival, telling the justices that “with tariffs, we are a rich country,” but without tariffs, “we are a poor country.” Small business groups that objected to the mandate similarly warned that President Trump’s position was a “breathtaking assertion of power” to effectively impose a tax without any oversight from Congress.
President Trump is relying on a 1970s emergency law, the International Emergency Economic Powers Act (IEEPA), to impose the import duties at issue in this case. This law allows the president to “regulate imports” in an emergency. The government argued that the word clearly included the power to impose tariffs, but businesses pointed out that the words “tariff” and “duty” never appear in the law.
This poses a series of difficult questions for the Supreme Court itself, which has ruled in case after case involving President Joe Biden’s controversial policies that the administration cannot unilaterally take certain executive actions without explicit authorization from Congress. Courts have repeatedly ruled that this is especially true when the policy involves “serious” political or economic issues.
In 2023, for example, the conservative majority relied on “key questions” to block Biden’s student loan forgiveness plan. A year earlier, the court blocked Biden’s mandate to vaccinate and test 84 million Americans, concluding that Congress had never explicitly given the government the authority to require these measures during the coronavirus pandemic. Even some conservatives said the same logic should apply to President Trump’s tariffs.
Mr. Trump offered several counterarguments, most notably that tariffs involve foreign affairs, which courts have traditionally defer to the executive branch.
The president has other, more established powers to impose tariffs without input from Congress. But each comes with deadlines and other conditions that would make it difficult for Mr. Trump to pursue a strategy of raising or lowering barriers as a negotiating tactic.
For example, another legal provision specifically allows the president to raise tariffs, but only by a maximum of 15% for a maximum of 150 days. Another authority gives the president the power to impose higher tariffs for national security reasons. This can only be used to target specific industries and requires investigation by the Department of Commerce.
All lower courts that have reviewed President Trump’s emergency tariffs have found them to violate federal law, although for different reasons. In one case, led by New York-based wine importer VOS Selections, the U.S. Court of International Trade concluded in May that IEEPA did not authorize President Trump’s emergency mission. This decision was affirmed several months later by the Court of Appeals in Washington, DC.
In a separate case, the Illinois-based educational toy company Learning Resources filed suit in U.S. District Court in Washington, which also ruled against Trump. The case quickly jumped from the D.C. Circuit to the Supreme Court.
Courts in both cases temporarily put their decisions on hold, allowing the administration to continue collecting tariffs while the appeals are heard.
During oral arguments at the Supreme Court on November 5, the court’s three liberal justices appeared ready to side with the companies. Some of the conservative members of the court’s supermajority gave mixed signals about how they would ultimately rule, with Roberts and Justice Amy Coney Barrett asking tough questions of both the companies and the Trump administration.
A key question at stake was whether all companies would be entitled to a refund of their tariff payments if the justices ruled against the Trump administration’s use of emergency powers to impose tariffs.
The filing came in response to a group of importers, including Costco, requesting a preliminary injunction to prevent CBP from completing duty payments, a process formally known as liquidation. The importer argued that it was essential for the payment to remain outstanding in order to receive a refund in the future. However, their request for a preliminary injunction was denied.
The three-panel judges explained that the verdict was supported by the government’s promise to ultimately refund IEEPA duty payments even if the entries were liquidated. But the administration says it will likely be an arduous process.
This story has been interrupted and will be updated.
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