US Supreme Court strikes down Trump’s tariffs

The US Supreme Court struck down Donald Trump’s sweeping tariffs that he pursued under a law meant for use in national emergencies, handing a stinging defeat to the Republican president in a landmark opinion on Friday, 20 February, with major implications for the global economy.

The justices, in a 6-3 ruling authored by conservative Chief Justice John Roberts, upheld a lower court’s decision that Trump’s use of this 1977 law exceeded his authority.

The court ruled that the Trump administration’s interpretation that the law at issue – the International Emergency Economic Powers Act (IEEPA) – which he claimed grants him the power he claims to impose tariffs, would intrude on the powers of Congress and violate a legal principle called the “major questions ” doctrine.

The doctrine, embraced by the conservative justices, requires actions by the government’s executive branch of “vast economic and political significance” to be clearly authorised by Congress. The court used the doctrine to stymie some of Democratic former President Joe Biden’s key executive actions.

The White House had no immediate comment on the ruling. Democrats and various industry groups hailed the ruling.

Roberts, citing a prior Supreme Court ruling, wrote that “the president must ‘point to clear congressional authorisation’ to justify his extraordinary assertion of the power to impose tariffs,” adding: “He cannot.”

Trump has leveraged tariffs – taxes on imported goods – as a key economic and foreign policy tool. They have been central to a global trade war that Trump initiated after he began his second term as president, one that has alienated trading partners, affected financial markets and caused global economic uncertainty.

The Supreme Court reached its conclusion in a legal challenge by businesses affected by the tariffs and 12 US states, most of them Democratic-governed, against Trump’s unprecedented use of this law to unilaterally impose the import taxes.

The three dissenting justices were conservatives Clarence Thomas, Samuel Alito and Brett Kavanaugh. Joining Roberts in the majority were conservative Justices Neil Gorsuch and Amy Coney Barrett, both of whom Trump appointed during his first term in office, along with the three liberal justices.

The Supreme Court had previously backed Trump in a series of other decisions issued on an emergency basis since he returned to the presidency in January 2025 after his policies were impeded by lower courts.

Pushing the boundaries of executive authority

Trump’s tariffs were forecast to generate trillions of dollars in revenue for the United States over the next decade.

Trump’s administration has not provided tariffs collection data since December 14. But Penn-Wharton Budget Model economists estimated on Friday that the amount collected in Trump’s tariffs based on IEEPA stood at more than $175-billion (R2.8-trillion). And that amount likely would need to be refunded with a Supreme Court ruling against the IEEPA-based tariffs.

The US Constitution grants Congress, not the president, the authority to issue taxes and tariffs. But Trump instead turned to a statutory authority by invoking IEEPA to impose the tariffs on nearly every US trading partner without the approval of Congress.

Trump has imposed some additional tariffs under other laws that are not at issue in this case. Based on government data from October to mid-December, those represent about a third of the revenue from Trump-imposed tariffs.

IEEPA lets a president regulate commerce in a national emergency. Trump became the first president to use IEEPA to impose tariffs, one of the many ways he has aggressively pushed the boundaries of executive authority since he returned to office in areas as varied as his crackdown on immigration, the firing of federal agency officials, opens new tab, domestic military deployments and military operations overseas.

Trump described the tariffs as vital for US economic security, predicting that the country would be defenceless and ruined without them. Trump, in November, told reporters that without his tariffs “the rest of the world would laugh at us because they’ve used tariffs against us for years and took advantage of us”. Trump said the US was abused by other countries including China, the second-largest economy.

After the Supreme Court heard arguments in the case in November, Trump said he would consider alternatives if it ruled against him on tariffs, telling reporters that “we’ll have to develop a ‘game two’ plan”.

Treasury Secretary Scott Bessent and other administration officials said the United States would invoke other legal justifications to retain as many of Trump’s tariffs as possible. Among others, these include a statutory provision that permits tariffs on imported goods that threaten US national security and another that allows retaliatory actions including tariffs against trading partners that the Office of the US. Trade Representative determines have used unfair trade practices against American exporters.

Blunt force of IEEPA

None of these alternatives offered the flexibility and blunt-force dynamics that IEEPA provided Trump, and may not be able to replicate the full scope of his tariffs in a timely fashion.

Trump’s ability to impose tariffs instantaneously on any trading partner’s goods under the aegis of some form of declared national emergency raised his leverage over other countries. It brought world leaders scrambling to Washington to secure trade deals that often included pledges of billions of dollars in investments or other offers of enhanced market access for US companies.

But Trump's use of tariffs as a cudgel in US foreign policy has succeeded in antagonising numerous countries, including those long considered among the closest US allies.

IEEPA historically had been used for imposing sanctions on enemies or freezing their assets, not to impose tariffs. The law does not specifically mention the word tariffs. Trump's Justice Department had argued that IEEPA allows tariffs by authorising the president to “regulate” imports to address emergencies.

The Congressional Budget Office has estimated that if all current tariffs stay in place, including the IEEPA-based duties, they would generate about $300-billion (R4.8-trillion) annually over the next decade.

‘Liberation Day’

Total US net customs duty receipts reached a record $195-billion (R3.1-trillion) in fiscal 2025, which ended on September 30, according to US Treasury Department data.

On 2 April 2025, a date Trump labelled “Liberation Day”, the president announced what he called “reciprocal” tariffs on goods imported from most US trading partners, invoking IEEPA to address what he called a national emergency related to US trade deficits, though the United States had already run trade deficits for decades.

In February and March of 2025, Trump invoked IEEPA to impose tariffs on China, Canada and Mexico, citing the trafficking of the often-abused painkiller fentanyl and illicit drugs into the United States as a national emergency.

Trump has wielded his tariffs to extract concessions and renegotiate trade deals, and as a weapon to punish countries that draw his ire on non-trade political matters. These have ranged from Brazil’s prosecution of former president Jair Bolsonaro, India’s purchases of Russian oil that help fund Russia’s war in Ukraine, and an anti-tariffs ad by Canada’s Ontario province.

IEEPA was passed by Congress and signed by Democratic President Jimmy Carter. In passing the measure, Congress placed additional limits on the president's authority compared to a predecessor law.

The cases on tariffs before the justices involved three lawsuits.

The Washington-based US Court of Appeals for the Federal Circuit sided with five small businesses that import goods in one challenge, and the states of Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon and Vermont in another.

Separately, a Washington-based federal judge sided with a family-owned toy company called Learning Resources. DM