Justices Limit Presidential Power
The US Supreme Court dealt a major blow to Donald Trump on Friday, striking down his sweeping global tariffs. In a 6–3 ruling, the court found that the president exceeded his authority by using emergency powers to impose broad import taxes. Chief Justice John Roberts wrote that the Constitution clearly grants Congress, not the executive branch, the power to levy taxes, including tariffs. Justices Samuel Alito, Clarence Thomas, and Brett Kavanaugh dissented, arguing the tariffs were legally justified despite policy debates.
Emergency Powers and Legal Challenges
The ruling focused on Trump’s use of the International Emergency Economic Powers Act (IEEPA), a 1977 law that allows the president to declare national emergencies and use economic tools such as sanctions. Trump was the first to invoke it for import tariffs, framing “reciprocal” duties on nearly every US trading partner as a response to trade deficits and drug trafficking concerns. Multiple lawsuits followed, brought by Democratic-leaning states and small businesses, arguing the law does not authorize tariffs. Courts had previously blocked other expansive executive actions under similar legal frameworks, including former President Biden’s student loan forgiveness program.
Economic Impact and Market Response
The tariffs had generated roughly $240 billion in revenue since April 2025, with potential refunds estimated at around $120 billion, about 0.5% of GDP. Justice Kavanaugh noted in his dissent that refund disputes could become “a mess.” Investors reacted positively at first, with the S&P 500 climbing nearly 1% before settling slightly higher. While the ruling limits Trump’s use of emergency powers for tariffs, administration officials said duties could still be imposed under other laws. The decision leaves the broader trade agenda in a state of uncertainty, with the potential for continued legal and economic battles.
