Justices Limit Presidential Power
The US Supreme Court on Friday ruled that Donald Trump exceeded his authority by imposing broad global tariffs under emergency powers. In a 6–3 decision, the court stressed that the Constitution gives Congress—not the president—the power to levy taxes, including import duties. Chief Justice John Roberts wrote, “The Framers did not vest any part of the taxing power in the Executive Branch.” Justices Samuel Alito, Clarence Thomas, and Brett Kavanaugh dissented, arguing that while the policy might be debatable, the tariffs were legally permissible.
Emergency Powers and Legal Battles
The decision centers on the International Emergency Economic Powers Act (IEEPA), a 1977 law allowing the president to respond to national emergencies with sanctions and other economic measures. Trump was the first to use it to justify sweeping tariffs, which he argued were necessary to address trade deficits and drug trafficking threats. The tariffs, including “reciprocal” duties on most US trading partners, sparked lawsuits from Democratic-leaning states and small businesses, challenging the administration’s legal interpretation of IEEPA.
Economic Consequences and Market Response
Since their introduction in April 2025, the tariffs brought in around $240 billion in revenue. Analysts estimate potential refunds could reach roughly $120 billion, about 0.5% of GDP, though it remains uncertain whether companies will be reimbursed. Markets initially responded positively to the ruling, with the S&P 500 jumping as much as 1% before settling slightly higher. While the Supreme Court limits the use of emergency powers for tariffs, Trump may still pursue duties under other legal authorities, leaving his broader trade agenda and potential economic impact in play.
