Supreme Court Strikes Down Tariffs Imposed Through Emergency Declaration
The Supreme Court has struck down President Donald Trump’s emergency tariffs, ruling them unconstitutional in a 6-3 decision.
The decision invalidates all the tariffs imposed by the Trump administration through the International Emergency Economic Powers Act (IEEPA). On April 2, 2025, Trump declared that the trafficking of drugs such as fentanyl and the country’s trade imbalance constituted a national emergency that gave him authority to place broad tariffs on many U.S. trade partners, as high as 50% on some countries and 145% on Chinese-made goods. Over the past year, the Trump administration has used tariff rates on individual countries as a trade negotiation tool as it seeks to rework international agreements.
The tariffs are paid by U.S. importers and are projected to cost American small businesses $202 billion annually, according to a report from the U.S. Chamber of Commerce. Businesses have largely opposed the tariffs, with several filing lawsuits to undo their implementation. The Supreme Court ruling stems from two such complaints, one filed by Learning Resources, an Illinois-based educational toy company, and the other from V.O.S. Selections, a New York-based wine importer. In both cases, a federal district court ruled against the government but put a temporary hold on their orders until the Supreme Court could take up the question.
In an opinion written by Chief Justice John Roberts, the court held that IEEPA does not authorize the president to impose tariffs. The question at the heart of the case was whether Congress intended that the president could impose tariffs when it passed the IEEPA in 1977. Noting it was telling that no president has interpreted the law that way in the nearly 50 years since, Roberts wrote, “When Congress has delegated its tariff powers, it has done so in explicit terms, and subject to strict limits.
“The question is not, as the government would have it, whether tariffs can ever be a means of regulating commerce,” Roberts continued. “It is instead whether Congress, when conferring the power to ‘regulate … importation,’ gave the president the power to impose tariffs at his sole discretion. And Congress’s pattern of usage is most relevant to answering that question. That pattern is plain: When Congress grants the power to impose tariffs, it does so clearly and with careful constraints. It did neither here.”
Although the majority ruled against the Trump administration, the justices did not provide direction on how the government should return the more than $175 billion in tariffs it has collected since last April, an amount estimated by the Penn-Wharton Budget Model, a nonpartisan fiscal research group. During oral arguments, Trump officials contended that one of the reasons the court must uphold the IEEPA tariffs is that potential repayments could devastate the economy and the federal budget.
Still, the National Association for Wholesaler-Distributors (NAW) urged the Trump administration to move quickly to return tariffs to American businesses that paid them. “Putting those dollars back into the hands of job creators will immediately strengthen cash flow, unlock capital investment, and provide a meaningful boost to the broader economy,” NAW said. “Wholesaler-distributors operate on thin margins while keeping America’s supply chains moving. Returning tariff funds will allow distributors to reinvest in inventory, infrastructure, technology, and workforce growth. A prompt, orderly refund process will deliver real economic impact.”
It is important to note that while the IEEPA tariffs were invalidated, tariffs imposed by the Trump administration through other mechanisms remain in place. This includes the Section 232 tariffs on steel and aluminum imports and Section 301 tariffs on a wide range of Chinese imports.