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The U.S. Supreme Court Building in Washington, D.C. (Al Drago\/Getty Images).<\/p>\n
WASHINGTON \u2014 The U.S. Supreme Court dealt a major blow to President Donald Trump\u2019s trade agenda Friday, ruling the tariffs he issued under the International Economic Emergency Powers Act are illegal.<\/p>\n
In\u00a0a 6-3 decision\u00a0<\/a>authored by Chief Justice John Roberts, the court said Congress alone holds the power to tax in almost all circumstances. The Trump administration\u2019s argument that trade deficits and illegal drug imports granted it emergency power to levy tariffs was not justified, the court said. Tariffs are taxes on imported goods.<\/p>\n The Trump administration had argued that a provision in the law, known as IEEPA, that said the executive branch could \u201cregulate\u201d imports empowered the president to levy tariffs.<\/p>\n \u201cBased on two words separated by 16 others (in the law)\u2014\u2018regulate\u2019 and \u2018importation\u2019\u2014the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time,\u201d Roberts wrote. \u201cThose words cannot bear such weight.\u201d<\/p>\n Justices Sonia Sotomayor, Elena Kagan, Neil Gorsuch, Amy Coney Barrett and Ketanji Brown Jackson joined Roberts\u2019 opinion.\u00a0<\/p>\n Justices Clarence Thomas and Brett Kavanaugh filed dissenting opinions. Thomas and Justice Samuel Alito joined Kavanaugh\u2019s.<\/p>\n Kavanaugh\u2019s dissent accepted the administration\u2019s reading of the law and said it was not the justices\u2019 role to decide a policy matter that has \u201cgenerated vigorous\u201d debate.\u00a0<\/p>\n \u201cThe sole legal question here is whether, under IEEPA, tariffs are a means to \u2018regulate . . . importation,\u2019\u201d he wrote. \u201cStatutory text, history, and precedent demonstrate that the answer is clearly yes: Like quotas and embargoes, tariffs are a traditional and common tool to regulate importation.\u201d<\/p>\n Trump blasted the ruling <\/a>at an afternoon press conference. Asked if he regretted nominating Gorsuch and Barrett, he said the decision was \u201can embarrassment to their families.\u201d<\/p>\n He said the judges were \u201cbeing politically correct\u201d and catering to special interests rather than fairly interpreting the law.<\/p>\n He also said he would impose global 10% tariffs under a provision of the Trade Act of 1974, which\u00a0 allows the president to unilaterally apply tariffs for up to 150 days.<\/p>\n \u201cToday, I will sign an order to impose a 10% global tariff under Section 122 over and above our normal tariffs already being charged,\u201d he said.<\/p>\n Tariffs were an important tool to balance the country\u2019s trade and hold leverage over other countries, he said.\u00a0<\/p>\n In the opinion of the court, Roberts wrote that Trump\u2019s expansive use of the emergency tariff powers would upend the balance of powers between branches of government.<\/p>\n The administration\u2019s position would empower the president \u201cto unilaterally impose unbounded tariffs,\u201d simply by declaring an economic emergency, Roberts wrote. Further, that declaration would be unreviewable and could be overturned only by a veto-proof majority in both houses of Congress.<\/p>\n That view \u201cwould replace the longstanding executive-legislative collaboration over trade policy with unchecked Presidential policymaking,\u201d he wrote.<\/p>\n When Congress intends to convey that kind of power to the executive branch, it generally does so in uncertain terms, Roberts said.<\/p>\n \u201cIn light of the breadth, history, and constitutional context of that asserted authority, he must identify clear congressional authorization to exercise it,\u201d he wrote.\u00a0<\/p>\n The government\u2019s argument that IEEPA authorized that power, \u201cfalls short,\u201d the opinion said.\u00a0<\/p>\n The chief justice added that it was telling that in the nearly 50 years since the IEEPA became law, no other president has read such broad powers into it.<\/p>\n The ruling opens a new debate about how to handle tariff revenue that the government has already collected since Trump first imposed the IEEPA tariffs a year ago.<\/p>\n Kavanaugh noted the likely confusion the issue would cause.<\/p>\n \u201cThe Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers,\u201d he wrote. \u201cBut that process is likely to be a \u2018mess,\u2019 as was acknowledged at oral argument.\u201d<\/p>\n U.S. Sen. Elizabeth Warren, a Massachusetts Democrat and prominent economic liberal, said that revenue should be sent to small businesses that were harmed by the imposition of tariffs.<\/p>\n \u201cAny refunds from the federal government should end up in the pockets of the millions of Americans and small businesses that were illegally cheated out of their hard-earned money by Donald Trump,\u201d she wrote in a statement.<\/p>\n Main Street Alliance, a national trade group representing small businesses, called for the revenue collected under the tariffs to be returned to small businesses.<\/p>\n \u201cIf the authority was unlawful, the collections were unlawful,\u201d Executive Director Richard Trent said in a statement. \u201cEvery penny taken from small businesses under this framework should be returned.\u201d<\/p>\n With the court ruling that taxing power lies with Congress, efforts to codify the tariffs Trump had applied could become a priority for Republican lawmakers.<\/p>\n \u201cNo one can deny that the President\u2019s use of tariffs has brought in billions of dollars and created immense leverage for America\u2019s trade strategy and for securing strong, reciprocal America-first trade agreements with countries that had been taking advantage of American workers for decades,\u201d House Speaker Mike Johnson, a Louisiana Republican, wrote on social media. \u201cCongress and the Administration will determine the best path forward in the coming weeks.\u201d<\/p>\n Adrian Smith, a Nebraska Republican who chairs the House Ways and Means Committee\u2019s subpanel on trade, said Congress should work with the president to legislate tariffs.<\/p>\n \u201cNebraska\u2019s farmers, ranchers, and manufacturers create world-leading products and deserve reliable access to global markets,\u201d he said. \u201cI am committed to working with the administration to deliver long-term certainty through comprehensive and enforceable trade agreements. The President has made clear his intention to use every available tool to secure strong deals, but only Congress can ensure that these agreements provide lasting stability beyond any single administration.\u201d<\/p>\n Ohio Republican Sen. Bernie Moreno, though, said in a social media post that the ruling would severely hamper efforts to rebalance trade, and called for Congress to codify the tariffs.<\/p>\n \u201cSCOTUS\u2019s outrageous ruling handcuffs our fight against unfair trade that has devastated American workers for decades,\u201d he wrote. \u201cThese tariffs protected jobs, revived manufacturing, and forced cheaters like China to pay up. Now globalists win, factories (sic) investments may reverse, and American workers lose again. This betrayal must be reversed and Republicans must get to work immediately on a reconciliation bill to codify the tariffs that had made our country the hottest country on earth!\u201d<\/p>\n Democratic lawmakers praised the court\u2019s decision, while blasting the tariffs as a matter of policy.<\/p>\n \u201cThis is a win for the wallets of every American consumer,\u201d Senate Minority Leader Chuck Schumer, D-N.Y., said. \u201cTrump\u2019s chaotic and illegal tariff tax made life more expensive and our economy more unstable. Families paid more. Small businesses and farmers got squeezed. Markets swung wildly. We\u2019ve said from day one: a president cannot ignore Congress and unilaterally slap tariffs on Americans. That overreach failed.\u201d<\/p>\n Sen. Jeff Merkley, the ranking Democrat on the Senate Budget Committee, called the decision \u201ca win for farmers, small businesses, and hardworking, middle-class families across the country,\u201d he said in a statement.\u00a0<\/p>\n \u201cTrump\u2019s illegal and chaotic tariffs have harmed American consumers and businesses, leaving them to foot the bill for rising prices due to Trumpflation,\u201d the Oregon Democrat added. \u201cWhile Trump continues his \u2018families lose, billionaires win\u2019 agenda, we\u2019re using every tool at our disposal to fight back against his reckless policies and build an economy where families thrive, and billionaires pay their fair share.\u201d<\/p>\n The justices\u00a0heard arguments<\/a> in early November in what was the first major case of the second Trump term to move beyond the court\u2019s emergency docket and be heard on the merits of the case.<\/p>\n Small businesses and Democratic state attorneys general led the legal challenges against Trump\u2019s tariffs in the two separate cases, consolidated before the Supreme Court. They alleged Trump usurped taxing power, which belongs to Congress as outlined in Article I of the Constitution.<\/p>\n Victor Schwartz, founder and president of the family-owned, New York-based wine and spirits importer VOS Selections led the small business plaintiffs, which included a Utah-based plastics producer, a Virginia-based children\u2019s electricity learning kit maker, a Pennsylvania-based fishing gear company and a Vermont-based women\u2019s cycling apparel company.<\/p>\n State attorneys general who sued included those from Arizona, Colorado, Maine, Minnesota, Nevada, New Mexico and Oregon.<\/p>\n Two Illinois-based toy makers that primarily manufacture products in Asia filed a separate challenge.<\/p>\n For nearly three hours on Nov. 5, the justices dissected the language of IEEPA, a 1970s-era sanctions law that Trump invoked during the first year of his term in a series of emergency declarations and proclamations triggering import taxes on goods from nearly every country.<\/p>\n The high-profile case drew Cabinet officials to the court, including Treasury Secretary Scott Bessent, who sat shoulder-to-shoulder with Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer.\u00a0<\/p>\n Members of Congress also attended. Among the crowded rows were U.S. House Ways and Means Chairman Jason Smith, R-Mo., Sen. Mike Lee, R-Utah, and Democratic Sens. Amy Klobuchar of Minnesota and Ed Markey of Massachusetts.<\/p>\n Trump began imposing tariffs under IEEPA via executive order in February and March on products from China, Canada and Mexico, declaring the countries responsible for illegal fentanyl smuggled into the United States.<\/p>\n The president\u00a0escalated<\/a> the emergency tariffs April 2, which he dubbed \u201cliberation day,\u201d when he declared trade imbalances a national emergency. In addition to a new baseline 10% global tariff, Trump announced hefty additional duties on products from countries that export more goods to the U.S. than they import from U.S. suppliers.<\/p>\n The White House calculations\u00a0baffled<\/a> economists, as the administration proposed steep duties on close trading partners \u2014 including 20% on products from the European Union, 25% on South Korea, 32% on Taiwan and 46% on Vietnam.\u00a0<\/p>\n Inexplicably he also announced a 50% tariffs on goods from the landlocked, 11,000-square-mile African nation of Lesotho, and 10% on the Heard and McDonald Islands, only inhabited by penguins and seals.<\/p>\n Trump\u2019s announcement crashed markets, wiping trillions of dollars away in just a matter of days. He relented and\u00a0delayed<\/a> most of the tariffs, but escalated a trade war with China \u2014 shooting up the levy to 125%, and eventually to 145%.<\/p>\n The administration\u2019s trade war with China\u00a0cooled<\/a> a bit in May, but left the rate on some products at an effective 55%.<\/p>\n Trump maintains his tariffs have forced the hand of other governments to invest in the U.S. in exchange for lower tariffs. For example, Trump officials claimed victory in a\u00a0framework deal<\/a> with Japan that lowered duties on Japanese products to 15%, from 25%, with a promise from Japan to invest $550 billion in the U.S.<\/p>\n As recently as late August, Trump imposed an extra 25% tariff on goods imported from India, bringing the total tariffs on Indian products to 50%, because of the country\u2019s usage of Russian oil.\u00a0<\/p>\nNew tariffs<\/h4>\n
\u2018Unchecked\u2019 presidential authority<\/h4>\n
What to do about the taxes that were collected?<\/h4>\n
Attention turns to Congress<\/h4>\n
Arguments were heard in November<\/h4>\n
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<\/div>\n<\/div>\n<\/div>\u2018Liberation day\u2019<\/h4>\n