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(THE HILL) – The Supreme Court cast aside the bulk of President Trump’s sweeping tariffs Friday, obliterating a canon of his economic strategy in ruling that his use of an emergency statute to remake global trade was unlawful.
The decision invalidates what the Trump administration called the president’s most significant economic and foreign policy initiative of his second term, a result Trump has warned could foist financial ruin upon the United States.
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The justices rejected Trump’s expanded use of the International Emergency Economic Powers Act (IEEPA) in imposing tariffs on nearly every country. The 1970s-era law allows the president to “regulate” imports when necessary to respond to national emergencies that pose an “unusual and extraordinary” threat.
“We claim no special competence in matters of economics or foreign affairs,” Chief Justice John Roberts wrote.
“We claim only, as we must, the limited role assigned to us by Article III of the Constitution. Fulfilling that role, we hold that IEEPA does not authorize the President to impose tariffs.”
Trump is the first president to attempt to invoke the IEEPA to impose tariffs in its nearly 50-year history.
The decision does not provide guidance for how refunds will work, a battle that lies ahead in the lower courts.
Despite Trump’s string of victories before the high court over the past year, the justices expressed deep skepticism about his ability to justify his economic agenda with the string of emergencies he cited.
Starting in February, Trump declared an emergency over fentanyl to impose tariffs on Canada, China and Mexico. And more recently, he cited a trade deficit emergency in imposing his so-called reciprocal tariffs on dozens of trading partners across the globe.
Lower judges allowed the levies to continue until the Supreme Court resolved the case. Trump’s sector-specific tariffs that rely on separate legal authorities, like those on steel, aluminum and copper, were not at issue and remain in effect.
Trump has called the case one of the most important in American history, and as the court worked on its decision behind closed doors, the president repeatedly warned publicly that ruling against him would spell economic disaster.
The decision left three of the court’s conservatives in dissent.
Justice Brett Kavanaugh wrote in a dissenting opinion joined by Justices Clarence Thomas and Samuel Alito that, despite the “vigorous policy debates” spurred by Trump’s tariffs, those debates are not for the courts to resolve.
“The sole legal question here is whether, under IEEPA, tariffs are a means to ‘regulate … importation,’” Kavanaugh wrote. “Statutory 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.”
He said that “context and common sense” underpin that interpretation of the emergency powers law. However, Trump’s bid to impose tariffs may not be entirely foiled.
“In essence, the Court today concludes that the President checked the wrong statutory box by relying on IEEPA rather than another statute to impose these tariffs,” Kavanaugh added.
The decision is expected to spark a refund push from companies across the country to recover the billions in now-invalidated tariffs they’ve paid. The Supreme Court does not lay out a process for how they will be refunded.
In the lead-up to the decision, Costco, parts of the Toyota Group, Revlon and hundreds of other companies had already filed lawsuits seeking to protect their claims.
None of those major corporations was part of the Supreme Court case, however.
The justices considered underlying lawsuits brought by Democratic-led states and two groups of small businesses. Those businesses were represented by a heavyweight legal team with lawyers across the political spectrum.
It’s a rare loss for the administration, which has regularly emerged victorious before the conservative-majority Supreme Court in a flood of emergency appeals the Justice Department has brought to fight lower judges’ injunctions.
But the tariffs decision marks the first time the Supreme Court has provided a final opinion on the underlying legality of one of Trump’s policies.
Though it marks a significant defeat for the president, he retains avenues to still push through his tariff agenda. Congress has constitutional authority to impose new tariffs, and Trump may try to justify tariffs under another existing law.
Ilya Somin, a lawyer for several businesses that challenged Trump’s tariffs, celebrated the decision as a “major victory.”
“Today, the Supreme Court rightly ruled that the International Emergency Economic Powers Act does not give the President the power to ‘impose tariffs on imports from any country, of any product, at any rate, for any amount of time,’” he said in a statement. “It’s a major victory for the constitutional separation of powers, for free trade, and for the millions of American consumers and businesses enduring the higher taxes and higher prices as a result of these tariffs.”
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This article was originally published in The Hill.
