Top Court Halts Trump’s Sweeping Tariff Plan
Justices Rein in Emergency Powers
The Supreme Court of the United States delivered a major blow to Donald Trump, striking down his broad global tariff programme and ruling that he exceeded his authority by relying on emergency powers.
In a 6–3 decision, the court found that the Constitution clearly assigns the power to impose taxes — including tariffs — to Congress, not the president. Chief Justice John Roberts wrote that the nation’s founders did not grant any part of the taxing power to the executive branch.
Justices Samuel Alito, Clarence Thomas and Brett Kavanaugh dissented. Kavanaugh argued that whether the tariffs were good policy was beside the point, insisting they were lawful under existing statutes.
The ruling marks the first major test of Trump’s policy agenda before a court he reshaped during his first term.
The Legal Fight Over Emergency Authority
At the heart of the dispute was Trump’s use of the International Emergency Economic Powers Act (IEEPA), a 1977 law that allows presidents to regulate economic transactions during national emergencies. Historically, the law has been used to impose sanctions and freeze assets — not to levy sweeping import taxes.
Trump argued that trade deficits and drug trafficking constituted emergencies justifying tariffs on countries including Canada, China and Mexico, as well as broad “reciprocal” duties announced in April 2025.
Opposition came from across the political spectrum. Democratic-led states, small businesses and even pro-business conservative groups challenged the move, saying the emergency law did not authorize tariffs and failed established legal tests.
The decision does not prevent Trump from pursuing tariffs under other trade laws, though those routes come with tighter limits.
Economic Stakes and Market Reaction
The financial implications are enormous. Since April 2025 — a date Trump branded “Liberation Day” — the US Treasury has collected roughly $240 billion in tariff revenue. The Congressional Budget Office previously estimated the overall economic impact of the tariffs could reach $3 trillion over the next decade.
If courts ultimately require refunds, analysts at Capital Economics estimate repayments could total around $120 billion, roughly 0.5% of US GDP. Justice Kavanaugh warned in his dissent that sorting out potential reimbursements could become chaotic.
Markets initially reacted positively, with the S&P 500 jumping about 1% shortly after the ruling before easing back. Investors have generally favored moves that limit tariff expansion, though many believe Trump will continue pressing his trade agenda through alternative legal avenues.
Earlier this year, Trump warned publicly that a ruling against him could cost the country “hundreds of billions of dollars” and deal a serious economic blow. Now, with the court’s decision, the future of his tariff strategy enters a new and uncertain phase.
