The U.S. Supreme Court on Friday struck down most of former President Donald Trump’s tariffs, potentially triggering over $175 billion in refunds to American businesses. The 6-3 decision hinged on a core legal principle: tariffs function as taxes, and the president lacks the constitutional authority to impose them without explicit congressional approval. Trump had relied on the International Emergency Economic Powers Act (IEEPA) to enact sweeping tariffs targeting nearly every nation, including a controversial policy that even taxed remote islands.
This ruling marks a rare rebuke of presidential overreach by the Court. Chief Justice John Roberts emphasized that no president in IEEPA’s 50-year history had ever invoked it to impose such broad tariffs, underscoring the unprecedented nature of Trump’s actions. While some tariffs on steel, aluminum, and copper remain unaffected due to separate legal justifications, the decision invalidates many of the most aggressive trade measures implemented during his administration.
The implications are significant. Major companies like Costco, Prada, BYD, and Goodyear have already filed lawsuits seeking refunds. Financial firms, including Cantor Fitzgerald, capitalized on the anticipated ruling by allowing clients to bet against the tariffs’ legality.
The White House response was predictably defiant. According to CNN, Trump dismissed the decision as a “disgrace” and hinted at alternative measures. However, reinstating the same tariffs through different means will be difficult, requiring new procedures and trade investigations. The refunds themselves may also pose logistical hurdles, as Trump himself acknowledged in a Truth Social post, calling the process “almost impossible.”
The ruling isn’t just about money; it’s about checks and balances. The Court’s decision reaffirms the separation of powers and prevents future presidents from unilaterally imposing tariffs without congressional consent. This sets a critical precedent for trade policy, ensuring that economic coercion remains subject to democratic oversight.
Ultimately, this ruling will force a reassessment of U.S. trade strategy, and companies are gearing up for a fight to recover billions in overpaid duties. The outcome underscores the enduring power of the courts to constrain executive action, even in an era of bold presidential policies.
