The Supreme Court ruled 6-3 to strike down the bulk of the tariffs President Donald Trump has used as an economic and diplomatic cudgel during his second term.
The decision, written by Chief Justice John Roberts, does not apply to all tariffs Trump has imposed. Auto tariffs and many industry-specific tariffs were imposed using other laws.
But the tariffs Trump imposed using a 1970s law, IEEPA (the International Emergency Economic Powers Act), will be done.
It's a sweeping decision with major implications for separation of powers. But it may have little to no impact, at least at first, on the cost of things you buy every day.
Trump already moving to Plan B. Within hours of the decision Trump had already pivoted to impose a new 10% tariff citing a different statute, which says something about the fungibility of laws in the US right now. The new tariffs he announced can only be enacted for 150 days.
Will tariff money be refunded? There is looming is whether and how the US will have to refund more than $130 billion it took from importers based on tariffs now known to be unconstitutional. CNN's Elizabeth Buchwald explored the refund issue. There will be a lot of conjecture since the Court's majority said nothing about refunds. Some other court will figure it out?
Tariffs were not paid directly by consumers, although consumers likely bore the brunt of the taxes. So don't expect prices to come down in any event.
“Walmart is not going to give you a check for the 15% tariff on sneakers you bought from them four months ago," Stephanie Roth, chief economist at Wolfe Research, said in Buchwald's story.
Trump raged at the decision. The President said he was "ashamed" of the court. The majority included two justices he appointed, Neil Gorsuch and Amy Coney Barrett.
"They also are a frankly disgrace to our nation those justices,” Trump said.
Catch up. The key passages in italics below come from CNN's main report by John Fritze, Devan Cole, Elisabeth Buchwald, and Tierney Sneed. Read the full story.
This is the first full decision of Trump 2.0 and it is a stinging defeat for Trump.
“Even though the Supreme Court has already ruled in dozens of cases involving the second Trump administration, those all involved emergency applications; this was the first Trump-related case to which the Court gave full review – and it’s an overwhelming loss for Trump on both the specific legal question and the more general ability to broadly use statutes like IEEPA,” said Steve Vladeck, CNN Supreme Court analyst and professor at Georgetown University Law Center.
A law for emergencies that does not mention tariffs cannot be used to impose tariffs.
Trump has relied on a 1970s-era emergency law, the International Emergency Economic Powers Act, or IEEPA, to levy the import duties at issue in the case. That law allows a president to “regulate … importation” during emergencies. The administration argued the word plainly includes the power to impose tariffs, but the businesses noted that the words “tariff” or “duty” never appear in the law.
The same "major questions" logic the Court used to stop Biden's policies has now been used against Trump.
That raised a series of difficult questions for the Supreme Court itself, which in case after case involving controversial policies from former President Joe Biden, ruled that an administration cannot take certain executive actions unilaterally without explicit authorization from Congress. That is particularly true, the court repeatedly ruled, when policies involve “major” political or economic questions.
Another landmark decision hinges on John Roberts' view of what constitutes a tax.
“Taxes, to be sure, may accomplish regulatory ends,” the chief justice wrote. “But it does not follow that the power to regulate something includes the power to tax it as a means of regulation.”
Trump's plan B
“Now I’m going to go in a different direction, probably the direction I should have gone the first time,” Trump said, calling it “even stronger than our original choice.” The court only struck down one method for imposing tariffs – the use of the International Emergency Economic Powers Act. There are other provisions of the Trade Act of 1974, the Trade Expansion Act of 1962 and the Tariff Act of 1930 that he could try. He already used some of these in his first term.
