In a major setback to President Donald Trump’s trade agenda, the Supreme Court of the United States on Friday ruled 6–3 that he lacked the authority to impose sweeping tariffs without explicit approval from Congress.
Writing for the majority, Chief Justice John Roberts said the president had claimed “extraordinary power” to levy tariffs of unlimited scope and duration. Such authority, the court held, must be clearly granted by lawmakers. The bench concluded that the statute relied upon by the administration — the International Emergency Economic Powers Act (IEEPA) — did not authorise the broad tariff measures introduced by executive order.
Background of the Case
The ruling arose from consolidated cases — Learning Resources v. Trump and Trump v. V.O.S. Selections, Inc. — filed in 2025. Petitioners challenged whether IEEPA, enacted in 1977 to address extraordinary foreign threats, could be used to justify wide-ranging import tariffs.
Traditionally, IEEPA has been used to freeze assets, block transactions and impose targeted sanctions. However, after returning to office in January 2025, Trump invoked the law to declare national emergencies related to trade deficits, illegal immigration and drug trafficking.
On April 2, 2025 — referred to by the administration as “Liberation Day” — Trump signed Executive Order 14257, imposing tariffs on nearly all US trading partners, including India. The move rattled global markets and sparked criticism from lawmakers who argued that the Constitution vests tariff-setting powers primarily in Congress.
Lower courts had previously ruled against the administration, setting the stage for the Supreme Court’s final word.
Financial and Political Impact
The decision carries significant fiscal implications. Analysts at the Penn-Wharton Budget Model estimated that more than $175 billion in collected tariffs could be subject to refunds following an adverse ruling.
The Congressional Budget Office had projected that Trump’s tariffs would generate roughly $300 billion annually over the next decade. Any large-scale repayment could have a substantial impact on federal finances.
Politically, the verdict follows turbulence in Congress, where a handful of Republicans recently joined Democrats in efforts to challenge protections for the tariff programme.
What Lies Ahead
Administration officials have indicated they may explore alternative trade laws to reimpose certain duties if necessary. US Treasury Secretary Scott Bessent had earlier said the Treasury could manage potential refund obligations, while expressing confidence that the administration’s actions would ultimately be upheld.
The ruling reinforces congressional authority over trade policy and places new limits on the use of emergency economic powers to reshape US tariff policy.
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