U.S. Supreme Court curbs Trump’s tariff powers, teeing up potential $175 billion in refunds
The U.S. Supreme Court on Thursday ruled 6-3 that President Donald Trump exceeded his authority by imposing sweeping “reciprocal” tariffs under the International Emergency Economic Powers Act, a decision that curbs the White House’s latitude on trade and could trigger tens of billions of dollars in refunds to importers.
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Writing for the conservative-majority court, the justices concluded that IEEPA “does not authorize the president to impose tariffs,” noting that “had Congress intended to convey the distinct and extraordinary power to impose tariffs” through the emergency statute, “it would have done so expressly, as it consistently has in other tariff statutes.” The ruling affirms lower court findings that the across-the-board duties were illegal.
The decision does not affect sector-specific tariffs that the administration levied through separate authorities on steel, aluminum and other targeted goods, nor does it automatically unwind other measures the White House tied to emergency declarations, including duties aimed at major trading partners such as Mexico, Canada and China over illicit drug flows and immigration.
Trump announced the contested measures on April 2 last year, a date he labeled “Liberation Day,” invoking a national emergency to justify tariffs on most U.S. trading partners to counter what he called unfair trade practices and chronic deficits. The United States has run trade deficits for decades.
Economists at the Penn Wharton Budget Model estimate that more than $175 billion in tariffs collected could be subject to refunds, setting off a wave of decisions by thousands of businesses on whether and how to pursue claims. Formal probes that could culminate in additional sectoral tariffs remain underway.
Markets rallied after the decision. Europe’s STOXX 600 extended gains and gold eased from session highs, while all three major U.S. stock indexes climbed. The S&P 500 and Nasdaq were on track for weekly advances; the Dow was little changed versus last Friday’s close.
Irish business representative group Ibec said companies are seeking clarity on the ruling’s practical impact. “While this is a very significant decision which will inevitably weaken the hand of the U.S. government in relation to the application of across-the-board tariffs, there are a number of other trade and tariff instruments which the administration could use which would impact on EU-U.S. trade,” said Fergal O’Brien, Ibec’s executive director of lobbying and influence. “Ibec members will now watch with interest as to how the U.S. government will respond to the court’s decision and consider the wider implications.”
The European Union said it remains in close contact with Washington. “We take note of the ruling by the U.S. Supreme Court and are analyzing it carefully. We remain in close contact with the U.S. administration as we seek clarity on the steps they intend to take in response to this ruling,” a spokesperson said, adding that businesses on both sides of the Atlantic depend on stability and predictability and that the bloc continues to advocate for low tariffs. The U.K. government said it expects its “privileged” trading position with the United States to continue, noting Britain enjoys the lowest reciprocal tariffs globally.
White House spokeswoman Karoline Leavitt said on X that Trump will hold a press briefing at 5:45 p.m. Irish time to address the decision. While the court has removed IEEPA as a vehicle for blanket tariffs, trade lawyers say the administration still has access to other statutes that authorize targeted actions in response to specific findings on national security or unfair practices.
The ruling narrows presidential trade powers after an era of expansive use of emergency authorities and resets the balance toward Congress on broad tariff policy. For global businesses and U.S. consumers, the near-term focus turns to whether refunds flow — and how the White House recalibrates its strategy without a key tool it used to upend the postwar trading order.
By Abdiwahab Ahmed
Axadle Times international–Monitoring.
