- The Supreme Court has struck down most of Trump’s tariffs.
- This includes tariffs on China, Canada, Mexico, and others.
- Auto industry should get some relief, but it might be short-lived.
Tariffs have been a cornerstone of the Trump administration, but many had questioned their legitimacy as the President was effectively acting unilaterally. Lawsuits followed and now the Supreme Court has struck down a number of tariffs.
In a 170-page ruling, the court examined the International Emergency Economic Powers Act (IEEPA) and the President’s ability to impose tariffs. This came after Trump imposed a 25% tariff on most Canadian and Mexican imports as well as a 10% tariff on Chinese imports over alleged drug trafficking. The President also applied a number of so-called reciprocal tariffs of at least 10%.
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While there’s a lot to unpack, Chief Justice John Roberts noted the Constitution specifies that “Congress shall have power to lay and collect taxes, duties, imposts and excises.” Earlier decisions have found this includes setting tariffs and “The framers [of the Constitution] did not vest any part of the taxing power in the Executive Branch.”
The justices also wrote, “It is … telling that in IEEPA’s half century of existence, no President has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope.” The Supreme Court added this lack of historical precedent as well as the “breadth of authority that the President now claims, suggests that the tariffs extend beyond the President’s legitimate reach.”
The ruling is extensive, but NBC News noted the court decided the President wasn’t able to set tariffs under the IEEPA by a 6-3 margin. The outlet noted this invalidates many of Trump’s tariffs, but not all of them. Furthermore, the administration could try to get around the ruling by using other laws to impose tariffs.
Initial Reactions
The news is sending shockwaves across the globe, but the silence from Trump and the White House has been deafening. They haven’t commented as of this writing, but plenty of others have already chimed in.
We Pay the Tariffs, a coalition of over 800 small businesses, called on the government to issue swift refunds to companies. In a letter to Congress and the President, they said “The Administration should direct Customs and Border Protection to begin issuing refunds immediately using existing payment records. If legislation is needed, Congress should act without delay.”
They added this is “not a partisan issue” as “every dollar refunded to a small business is a dollar injected back into American communities, creating jobs, supporting families, and strengthening Main Street.”
The President of the IAM Union, Brian Bryant, welcomed the ruling as he said “Arbitrary, snap tariff decisions – especially those targeting close allies like Canada – create uncertainty that endangers jobs in highly interdependent industries such as aerospace and manufacturing, raises prices for consumers, and makes it harder for businesses and workers to plan for the future.” He added, “The Supreme Court decision reinforces the U.S. Constitution’s clear assignment of authority to Congress to impose tariffs on foreign imports.”
Canada’s Unifor union noted the court delivered a “legal rebuke of presidential overreach,” but the ruling “does nothing to resolve the ongoing trade crisis threatening Canadian jobs and key industrial sectors.” They added that “national security tariffs under Section 232, targeting auto, steel, aluminum, and wood products remain fully in force and could be expanded at any time.”
We can expect more groups to weigh in shortly, but the good news for businesses will be tariff relief. However, it remains unclear if the savings will be passed on to consumers and if the administration will reapply tariffs through other means.
