Supreme Court Curbs Trump’s IEEPA Tariffs as President Vows New 10% Global Levy

The Supreme Court has struck down President Donald Trump’s global tariffs in a landmark 6-3 ruling, declaring that the president exceeded his authority under federal law when he unilaterally imposed the levies that reshaped American trade policy and raised prices on imported goods.

Hours later, a defiant Trump announced he would sign an executive order imposing a 10% blanket tariff on all imports under a different legal authority, saying six justices who voted against the President’s orders are a “disgrace to our nation.”

Chief Justice John Roberts, writing for the majority, held that the International Emergency Economic Powers Act, the 1977 law Trump invoked to justify the tariffs, “does not authorize the President to impose tariffs.”

Roberts, joined by Justices Neil Gorsuch and Amy Coney Barrett, applied the “major questions doctrine,” reasoning that Congress would need to provide clear authorization before delegating sweeping tariff power to the president. Justices Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson joined the majority on separate grounds, agreeing that ordinary statutory interpretation alone was sufficient to conclude IEEPA does not authorize tariffs.

The court said that when Congress delegates tariff power, it does so explicitly, using specific terms like “duty” or “surcharge,” and subject to strict limits on amount, duration, and procedural requirements. IEEPA contains none of those features.

Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh dissented, arguing that the power to “regulate … importation” historically encompassed tariffs and that Congress clearly intended to grant the president broad emergency authority.

The ruling eliminates tariffs imposed under IEEPA that formed the backbone of Trump’s trade agenda, including the “reciprocal” tariffs announced on “Liberation Day” in April 2025 and levies on China, Canada and Mexico tied to immigration and fentanyl concerns.

The Yale Budget Lab estimated that U.S. Customs and Border Protection collected approximately $142 billion from IEEPA tariffs over the course of 2025. The nation’s effective tariff rate will drop from roughly 16.9% to 9.1% as a result of the ruling, according to the group, still the highest rate since the 1940s.

The Penn Wharton Budget Model estimated the government now faces roughly $175 billion in potential refund obligations to importers who paid the now-invalidated tariffs.

Research from economists at the Federal Reserve Bank of New York showed that the American consumer paid roughly 90 percent of the tariffs after they were passed on from the importer to businesses. While the American consumer likely won’t see a refund, Governors JB Pritzker and Gavin Newsom have called on the Trump administration to refund each American household around $1700.

“On behalf of the people of Illinois, I demand a refund of $1,700 for every family in Illinois. There are 5,105,448 households in my state, bringing the total damages you owe to $8,679,261,600.”

“This letter and the attached invoice stand as an official notice that compensation is owed to the people of Illinois, and if you do not comply, we will pursue further action.”

The court did not address the question of refunds, leaving open whether and how the estimated $134 billion to $175 billion already collected will be returned to importers. Kavanaugh noted in his dissent that the government “may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others”.

Trump indicated he does not plan to voluntarily issue refunds, saying the court’s silence on the matter means “we’ll end up being in court for the next five years.”

The ruling does not eliminate all U.S. tariffs. Section 232 tariffs on steel, aluminum, automobiles, semiconductors, and copper remain in full force. Existing Section 301 tariffs, including those on Chinese goods originally imposed during Trump’s first term, are also unaffected. The decision also does not strip the president of all tariff authority, it specifically addresses IEEPA and leaves intact the numerous other federal statutes that authorize tariffs under defined conditions.

Trump excoriated the majority justices and praised the dissenters in a combative press conference.

“I’d like to thank and congratulate Justices Thomas, Alito, and Kavanaugh for their strength and wisdom and love of our country,” Trump said. “When you read the dissenting opinions, there is no way that anyone can argue against them.”

He accused the majority of being “swayed by foreign interests” and called the three liberal justices “an automatic no” who are “against anything that makes America strong, healthy, and great again.”

Trump said, “What a shame. Having to do with voting in particular, when in fact they’re just being fools and lapdogs for the RINOs and the radical left Democrats. And not that this should have anything at all to do with it, they’re very unpatriotic and disloyal to our Constitution. It’s my opinion that the court has been swayed by foreign interests and a political movement that is far smaller than people would ever think.”

He pointed to what he described as an absurdity in the ruling: that under IEEPA, he retains the authority to embargo a nation or cut off all trade entirely, but cannot impose even a $1 tariff.

“In other words, I can destroy the trade. I can destroy the country,” Trump said. “I’m even allowed to impose a foreign country destroying embargo. I can embargo. I can do anything I want, but I can’t charge $1 because that’s not what it says and that’s not the way it even reads. I can do anything I want to do to them, but I can’t charge any money.”

Despite the ruling, Trump said he would press forward immediately, signing an executive order to impose a 10% global tariff under Section 122 of the Trade Act of 1974.

Section 122, which has never before been used to impose tariffs, permits the president to levy duties of up to 15% for a maximum of 150 days to address balance-of-payments challenges. Extending the tariffs beyond that window requires congressional approval.

“We’re going straight ahead with 10 percent straight across the board,” Trump told reporters, adding that the tariffs would take effect within days.

Trump also said his administration would launch investigations under Section 301 of the Trade Act, a process that can lead to more durable, targeted tariffs but requires formal investigations into unfair trade practices. He noted that existing tariffs under Section 232, including levies on steel, aluminum, semiconductors, automobiles and copper, remain fully in place and were unaffected by the ruling.

Treasury Secretary Scott Bessent said “If there is a payout, it’s just going to be the ultimate corporate welfare,” Bessent said on Fox News Friday. In another interview he added that the combination of new Section 122 tariffs and strengthened Section 232 tariffs would lead to “nearly unchanged tariff revenue in 2026.”

The ruling arrives just nine days after the House of Representatives voted 219-211 to rescind Trump’s tariffs on Canada, with six Republicans crossing the aisle to join nearly all Democrats. 

The Senate had previously passed similar measures in April and October 2025 with bipartisan support, including votes from Republican Senators Susan Collins, Mitch McConnell, Rand Paul and Lisa Murkowski.​

When asked Friday whether he would seek congressional action to restore his tariff authority, Trump said he did not need to. “I have the right to do tariffs and I’ve always had the right to do tariffs and it’s all been approved by Congress, so there’s no reason to do it,” he said.