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The U.S. Supreme Court has ruled 6–3 that President Donald Trump lacked the legal authority to impose sweeping global tariffs under emergency powers law, invalidating duties that generated over $175 billion in collected revenue and immediately triggering White House contingency measures to keep import taxes in place.
The decision immediately reshaped U.S. trade policy, triggered legal uncertainty for businesses and importers, and prompted swift action from the White House to preserve tariff revenue through alternative legal channels.
At the core of the IEEPA tariff ruling is a constitutional question: who has the authority to impose tariffs? Writing for the majority, Chief Justice John Roberts concluded that the Constitution clearly vests the power to tax — including tariffs — in Congress, not the president.
The Court applied the “major questions doctrine,” a legal principle requiring explicit congressional authorization for executive actions with vast economic and political consequences. The majority found that the administration’s use of IEEPA to impose sweeping tariffs lacked such explicit authorization.
The IEEPA tariff ruling affects trillions of dollars in trade flows and disrupts one of the administration’s signature trade strategies. Tariffs previously imposed under IEEPA authority on imports from countries such as China, Mexico, and Canada are now considered invalid, though certain sector-specific duties under other statutes remain in effect.
The decision also opens the door for importers to seek refunds for duties collected under the now-invalid authority. Legal experts caution that reimbursement processes through customs channels and federal courts could take years to resolve, adding another layer of complexity following the IEEPA tariff ruling.
President Trump criticized the decision shortly after it was announced, calling it “deeply disappointing” and expressing frustration with the Court’s interpretation. Lawmakers and business groups offered mixed reactions, with some praising the ruling as a constitutional safeguard and others warning of renewed trade instability.
Within hours of the IEEPA tariff ruling, the administration unveiled a new strategy to maintain import taxes. President Trump signed an executive order invoking Section 122 of the Trade Act of 1974, imposing a temporary 10% global tariff set to take effect on February 24, 2026.
Section 122 allows the president to implement tariffs of up to 15% for 150 days to address balance-of-payments concerns. Unlike other trade statutes, it does not require lengthy investigations before duties can be applied. However, the temporary nature of Section 122 suggests the administration views it as a stopgap following the IEEPA tariff ruling.
At the same time, the White House announced plans to initiate formal investigations under Sections 301 and 232 of the Trade Act. Section 301 addresses unfair trade practices, while Section 232 focuses on national security risks tied to imports. These pathways involve more extensive administrative procedures but could support longer-term tariffs.
Treasury Secretary Scott Bessent signaled confidence that the new measures would offset the impact of the IEEPA tariff ruling.
He said the temporary tariff and additional investigations would “largely maintain tariff revenue levels” despite the legal setback, underscoring the administration’s determination to preserve trade leverage.
Markets and foreign governments are now closely watching whether the new tariffs under Section 122 — and any future measures under Sections 301 or 232 — face fresh legal challenges similar to those that culminated in the IEEPA tariff ruling.
For U.S. businesses and importers, the IEEPA tariff ruling introduces immediate operational and financial questions. Companies that paid duties under the invalidated authority may seek refunds, potentially totaling billions of dollars. However, the refund process is expected to be complex, involving customs claims and possible litigation.
Economists and industry groups warn that the abrupt policy shift could disrupt supply chains already strained by years of tariff-related volatility. Some sectors have reported rising input costs and slower job growth amid ongoing trade tensions.
The short-term 10% tariff under Section 122 adds another layer of uncertainty. Although narrower in duration than the invalidated measures, it still applies broadly to goods from nearly all countries, with limited product exemptions. Businesses must now adjust to a revised tariff framework shaped directly by the IEEPA tariff ruling.
International reaction has been cautious. Governments in Europe and Southeast Asia have expressed measured relief that the sweeping emergency-based tariffs were struck down, while remaining wary of the new temporary duties and pending trade investigations.
The IEEPA tariff ruling marks a significant judicial check on executive power in trade policy. By reinforcing Congress’s constitutional authority over taxation, the Supreme Court has reshaped the legal landscape for future administrations seeking to use emergency powers to influence global commerce.
Whether Congress will respond with new legislation clarifying presidential tariff authority remains uncertain. In the meantime, the administration’s reliance on alternative statutory tools signals that trade disputes are far from resolved.
As businesses, lawmakers, and trading partners assess the aftermath of the IEEPA tariff ruling, one outcome is clear: the balance of power over U.S. tariff policy has been recalibrated, with economic and legal consequences likely to unfold for years.
