Court Limits Executive Power
The U.S. Supreme Court on Friday blocked Donald Trump’s broad global tariffs, ruling that the president overstepped his authority by invoking emergency powers. In a 6–3 decision, the justices said the Constitution clearly grants Congress — not the president — the power to impose taxes, including tariffs. Chief Justice John Roberts wrote that the Framers never intended the executive branch to wield that taxing authority.
Justices Samuel Alito, Clarence Thomas, and Brett Kavanaugh dissented, arguing the tariffs were legally justified regardless of policy considerations. The ruling represents the first major test of Trump’s wider agenda to reach the nation’s highest court, a court he helped shape with three conservative appointments.
Emergency Tariffs Under Scrutiny
The case centered on Trump’s use of the 1977 International Emergency Economic Powers Act (IEEPA), which allows the president to declare a national emergency and take broad economic measures such as sanctions. While previous presidents used IEEPA for sanctions, Trump was the first to invoke it to impose sweeping import taxes.
Trump set “reciprocal tariffs” on nearly all U.S. trading partners in April 2025, citing trade deficits and alleged national emergencies, including drug trafficking concerns. Legal challenges came from a dozen largely Democratic-leaning states and businesses of all sizes, from plumbing suppliers to toy sellers, arguing that IEEPA does not authorize tariffs and that Trump’s use of the law violated multiple legal tests.
Economic Fallout and Market Reaction
The economic stakes are significant. Since “Liberation Day” in April 2025, the U.S. Treasury has collected around $240 billion in tariff revenue. Analysts estimate potential refunds could reach $120 billion, roughly 0.5% of GDP, if courts order reimbursements. Justice Kavanaugh highlighted this risk in his dissent, warning of a “mess” if refunds are required.
Markets responded cautiously. The S&P 500 initially jumped 1% after the ruling but later settled around 0.3% higher. Investors have generally welcomed efforts to limit tariff uncertainty, though Trump is expected to continue pursuing his trade agenda through other legal avenues. The ruling not only curtails his emergency powers but also sets the stage for further legal and economic debates over presidential authority and trade policy.
