The US Supreme Court on Friday struck down Donald Trump’s sweeping global tariffs, dealing a major blow to a central pillar of the president’s economic agenda.
In a 6–3 ruling, the conservative-majority court held that the International Emergency Economic Powers Act (IEEPA) does not grant the president authority to impose tariffs. Chief Justice John Roberts wrote that the law “contains no reference to tariffs or duties,” adding that if Congress intended to confer such “distinct and extraordinary power,” it would have done so explicitly.
The decision does not affect sector-specific duties already imposed on imports such as steel and aluminium, nor ongoing investigations that could produce additional targeted tariffs. Still, the ruling marks Trump’s most significant Supreme Court setback since returning to office.
Trump had used emergency economic powers extensively in his second term to levy tariffs on nearly all US trading partners, including “reciprocal” duties and measures targeting Mexico, Canada and China over drug flows and migration concerns.
The court’s three liberal justices joined three conservatives to uphold lower court rulings that the IEEPA-based tariffs were unlawful. Conservative justices Brett Kavanaugh, Clarence Thomas and Samuel Alito dissented.
A trade court had previously blocked most of the tariffs in May, but the order was paused pending appeal.
Business groups welcomed the decision. The National Retail Federation said it “provides much-needed certainty” and urged a smooth process to refund tariffs to importers, though the justices did not address how refunds would be handled. Justice Kavanaugh warned that the process could be a “mess.”
Economists say the fiscal impact could be significant. Gregory Daco of EY-Parthenon estimated the government could lose about $140 billion in tariff revenue. He said average tariff rates could fall from roughly 16.8 percent to about 9.5 percent, though the drop may be temporary if alternative legal pathways are used.
The Budget Lab at Yale University similarly estimated an effective tariff rate of 9.1 percent after the ruling — still among the highest levels since 1946, excluding 2025.
International partners reacted cautiously. The European Union said it was reviewing the decision, while the United Kingdom plans talks with Washington on implications for a bilateral trade deal. Canada said the judgment confirms Trump’s tariffs were “unjustified.”
Erica York of the Tax Foundation said the ruling limits the president’s ability to impose broad tariffs at will, though other statutes remain available. Analysts at ING said the decision “dismantles the legal scaffolding, not the building itself,” leaving room for more limited trade restrictions through alternative legal channels.
