By John Fritze, CNN
US President Donald Trump holds up a chart while speaking during a “Make America Wealthy Again” trade announcement event in the Rose Garden at the White House on April 2, 2025 in Washington, DC. Photo: Chip Somodevilla/Getty Images via CNN Newsource
The United States Supreme Court has ruled that President Donald Trump violated federal law when he unilaterally imposed sweeping tariffs across the globe, a striking loss for the White House on an issue that has been central to the president's foreign policy and economic agenda.
The decision is arguably the most important loss the second Trump administration has sustained at the conservative Supreme Court, which last year repeatedly sided with the president in a series of emergency rulings on immigration, the firing of the leaders of independent agencies and deep cuts to government spending.
Chief Justice John Roberts wrote the majority opinion and the court agreed 6-3 that the tariffs exceeded the law. The court, however, did not say what should happen to the more than $130 billion (NZ$217.7b) in tariffs that has already been collected.
"The president asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope," Roberts wrote for the court. "In light of the breadth, history, and constitutional context of that asserted authority, he must identify clear congressional authorization to exercise it."
The emergency authority Trump attempted to rely on, the court said, "falls short."
Justices Amy Coney Barrett and Neil Gorsuch joined with Roberts and the three liberal justices in the majority. Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh dissented.
In his opinion, Roberts brushed aside an argument from the administration that the president had power to use tariffs to regulate commerce. That was an issue that came up during the oral arguments last year as Trump suggested the president had inherent authority to issue the tariffs.
"When Congress grants the power to impose tariffs, it does so clearly and with careful constraints," Roberts wrote. "It did neither here."
"We claim no special competence in matters of economics or foreign affairs," Roberts wrote. "We claim only, as we must, the limited role assigned to us by Article III of the Constitution. Fulfilling that role, we hold that IEEPA does not authorize the president to impose tariffs."
No clarity on returning money
The 6-3 majority offered no clarity on the specific practical question of what to do with the money the administration has already collected through Trump's tariffs.
As of 14 December, the federal government has collected $134 billion (NZ$224.3b) in revenue from the tariffs being challenged from over 301,000 different importers, according to United States Customs and Border Protection data as well as a recent filing submitted by the agency to the US Court of International Trade.
That question will likely need to be sorted out by lower courts.
In his dissent, Justice Brett Kavanaugh noted that the court said "nothing today about whether, and if so how, the government should go about returning the billions of dollars that it has collected from importers."
The issue of refunds has loomed large over the case, with Trump administration officials saying that potential repayments could have devastating consequences for the US economy.
"That process is likely to be a 'mess,'" Kavanaugh wrote.
Most significant case on US economy in years
The case was the most significant involving the American economy to reach the Supreme Court in years, challenging the legality of Trump's "Liberation Day" tariffs, as well as duties he imposed on imports from China, Mexico and Canada. At stake were tens of billions of dollars in revenue the government has already collected.
The so-called "reciprocal" tariffs raised duties as high as 50 percent on key trading partners, including India and Brazil, and as high as 145 percent on China in 2025.
Trump and Justice Department officials framed the dispute in existential terms for the country, telling the justices that "with tariffs, we are a rich nation" but that without them, "we are a poor nation." A group of small businesses who challenged the duties similarly warned that Trump's position represented a "breathtaking assertion of power" to effectively levy a tax without oversight from Congress.
Trump has relied on a 1970s-era emergency law, the International Emergency Economic Powers Act, or IEEPA, to levy the import duties at issue in the case. That law allows a president to "regulate … importation" during emergencies. The administration argued the word plainly includes the power to impose tariffs, but the businesses noted that the words "tariff" or "duty" never appear in the law.
That raised a series of difficult questions for the Supreme Court itself, which in case after case involving controversial policies from President Joe Biden, ruled that an administration cannot take certain executive actions unilaterally without explicit authorisation from Congress. That is particularly true, the court repeatedly ruled, when policies involve "major" political or economic questions.
In 2023, for instance, the conservative majority relied on the "major questions doctrine" to block Biden's student loan forgiveness plan. A year earlier, the court stopped Biden's vaccine and testing requirement for 84 million Americans, concluding that Congress never explicitly gave the government the power to demand those measures during the Covid-19 pandemic. Even some conservatives said the same logic should apply when it came to Trump's tariffs.
Trump offered several counter arguments, most notably that the tariffs implicate foreign affairs, where courts have traditionally referred to the executive branch.
The president has other - more established authorities - to levy tariffs without input from Congress. But each of those come with strings attached, such as time limits, that would make it harder for Trump to pursue his on-again-off-again strategy of raising and then lowering barriers as a negotiating tactic.
Another provision of law, for instance, clearly allows a president to raise tariffs - but only up to 15 percent for a maximum of 150 days. Another authority gives the president the power to impose higher tariffs for national security reasons. It can only be used to target specific industries and requires an investigation by the Commerce Department.
Every lower court that has reviewed Trump's emergency tariffs found they violated federal law, though for different reasons. In one case, led by a New York-based wine importer called VOS Selections, the US Court of International Trade concluded in May that IEEPA didn't authorise Trump's emergency duties. That decision was affirmed months later by an appeals court in Washington, DC.
In a separate case, an Illinois-based educational toy company, Learning Resources, sued in a federal district court in Washington, which also ruled against Trump. The case quickly went to the Supreme Court, leapfrogging the DC Circuit.
The courts in both cases put their rulings on hold temporarily, allowing the administration to continue to collect the tariffs while the appeals played out.
During oral arguments at the Supreme Court on 5 November , the court's three liberal justices appeared prepared to side with the businesses. Several members of the court's conservative supermajority gave mixed signals of how they may ultimately rule, with Roberts and Justice Amy Coney Barrett asking difficult questions of both the businesses and the Trump administration.
A significant question looming over the arguments was whether all businesses would be entitled to tariff payment refunds if the justices rule against the Trump administration's use of emergency powers to impose tariffs.
The filing was in response to a group of importers, including Costco, requesting a preliminary injunction to prevent CBP from finalising their tariff payments, a process formally known as liquidation. The importers argued that it was imperative for their payments to be unliquidated to get refunds down the road. Their request for a preliminary injunction was denied, however.
The three-panel judge explained that their verdict was supported by the administration's promise to refund IEEPA tariff payments, if it came down to it, even if entries were liquidated. However, the administration has stated that it would likely be a laborious process.
- CNN
