Supreme Court Strikes Down Most Of Trump’s Tariffs

President Donald Trump’s signature economic policy was illegal.

That’s according to the Supreme Court, which ruled Wednesday against the sweeping tariffs Trump imposed on most U.S. trading partners in 2025 using his emergency powers. In a 6-3 ruling, the high court determined Trump exceeded his authority as president when he imposed the import taxes.

The ruling overturns all of the tariffs Trump imposed under the International Emergency Economic Powers Act (IEEPA) of 1977. That represents about 75% of all the tariffs Trump imposed last year, according to an analysis by UBS, including the “reciprocal” tariffs he placed on imports from most countries in the world.

The ruling leaves in place tariffs on specific items such as automobiles and steel, which were imposed under a different authority, section 232 of the Trade Expansion Act of 1962.

“The President enjoys no inherent authority to impose tariffs during peacetime,” the ruling said. “It instead relies exclusively on IEEPA to defend the challenged tariffs.”

Trump Could Impose New Tariffs

The court sided with Learning Resources Inc., which manufactures educational materials, and sued the administration last year arguing that IEEPA does not give Trump the authority to impose tariffs at will.

The ruling once again throws U.S. trade policy into uncertainty. Ahead of the ruling, the Trump administration vowed to re-impose tariffs under different legal justifications if the court ruled against tariffs. The administration would “start the next day” to reestablish tariffs, Trade Representative Jamieson Greer told the New York Times last month.

It was unclear how soon Trump would impose new tariffs, or whether they would be as high as the old ones.

The tariffs are intended to rebalance global trade in favor of the U.S. and boost American manufacturing and jobs in that sector among other goals.

Trump’s import taxes have had a significant impact on the U.S. and world economies, reshaping trade patterns, slowing global economic growth, dragging down the U.S. job market, and putting upward pressure on inflation. They’ve also affected household finances as importers have passed costs along to consumers, costing the typical household $1,681 a year according to an analysis by the Yale Budget Lab.

At the same time, the $216 billion in revenue that the tariffs generated in fiscal 2025 did help reduce the U.S. government’s spending deficit. The U.S. closed out fiscal 2025 with a deficit of $1.78 trillion, down from $1.84 trillion in 2024.

Economic Impact Unclear

Ahead of the ruling, analysts speculated about what a defeat for Trump would mean for the economy. In the end, the tariffs could return in a different form, leaving those economic forces in full effect. For example, Section 232 of the Trade Expansion Act allows the president to impose tariffs on certain products after a Department of Commerce investigation, while Section 301 allows tariffs on a country found to be engaging in unfair trade practices.

“We have maintained that the ongoing case at the Supreme Court doesn’t change our expectations for US trade policy, as the president can leverage a range of other authorities—both temporary and longer-lasting—to effectively replace or quickly re-impose the current tariff levels,” Ariana Salvatore and Bradley Tian, strategists at Morgan Stanley, wrote in a commentary last month.

Last month, Trump said there would be a “complete mess” if the court ruled against his tariffs because of the lost revenue and the possible requirement to pay billions in tariff refunds. Should the court strike the tariffs down, “we’re screwed!” he wrote in all-caps in a post on his Truth Social platform.

It’s also possible that the White House could take the opportunity to reduce the tariff levels to some extent, which would lower inflation at a time when Trump’s Democratic political opponents are emphasizing voters’ cost-of-living concerns.

“We do think there’s scope for the administration to take a lighter-touch approach to the overall tariff regime given a recent political focus on affordability,” Salvatore and Tian wrote.