US Supreme Court Strikes Down Trump Tariffs, President Imposes New 10% Levy
The US Supreme Court delivers a major blow to President Trump’s trade agenda by striking down his sweeping global tariffs. Trump tariffs Supreme Court ruling invalidated taxes imposed under a 1977 emergency law. The court ruled 6-3 that the International Emergency Economic Powers Act does not authorize the president to impose tariffs. Chief Justice John Roberts wrote that Congress, not the president, holds the power to tax. Consequently, the decision represents a rare check on executive authority. Wall Street responded positively, with the S&P 500 climbing 0.7 percent shortly after the announcement.
A Rare Judicial Check on Presidential Power
The tariffs initially targeted Mexico, Canada, and China before expanding dramatically on what Trump called “Liberation Day” last April. Lawyers for challenging states argued that the 1977 law made no mention of tariffs. They contended that Congress never intended to hand off its power to tax. Chief Justice Roberts agreed with this view in his opinion. Three conservative justices joined the three liberal justices in the majority. Justices Kavanaugh, Alito, and Thomas dissented from the ruling.
New Tariffs Under Different Legal Authority
President Trump responded swiftly by signing a proclamation imposing new 10 percent tariffs under Section 122. This never-used law allows tariffs up to 15 percent for 150 days. After that period, Congress must step in to extend them. The new measure takes effect on February 24 with various exemptions. These include minerals, fertilizers, agricultural products, pharmaceuticals, and some electronics. Canada and Mexico retain exemptions under the USMCA trade pact. A White House official confirmed that countries with trade deals, including the UK, India, and the EU, will now face the global 10 percent tariff.
Mixed Reactions from Businesses and Trading Partners
Business owners cautiously welcomed the Supreme Court ruling. Beth Benike of Busy Baby Products described feeling like a “thousand-pound weight has been lifted.” Nik Holm of Terry Precision Cycling called the ruling a relief. However, the path to refunds remains uncertain and potentially costly for smaller firms. Major trading partners responded relatively quietly to the decision. The European Commission stated it is analyzing the ruling carefully. Diane Swonk, chief economist at KPMG US, warned that litigation costs could make recouping funds difficult for smaller companies.
Uncertainty Ahead for Trade Policy
Analysts expect the White House to explore other tools like Section 232 and Section 301. These laws allow tariffs for national security and unfair trade practices. Trump has used them previously for steel, aluminum, and automotive tariffs. Those measures remained untouched by the court ruling. Geoffrey Gertz of the Center for a New American Security noted that things have only become more complicated. The administration had already collected at least $130 billion using the IEEPA law. Hundreds of firms have filed lawsuits contesting the tariffs to get in line for potential refunds. Justice Kavanaugh warned in his dissent that the situation would become a “mess.”
