US Supreme Court strikes down Trump’s tariffs in blow to key US economic policy

The United States Supreme Court struck down President Donald Trump's global tariffs policy on Friday, halting a core piece of his economic legislation.

The decision, a major setback for the president, looked at whether or not the tariffs could be imposed under the Emergency Economic Powers Act of 1977, including the sweeping "reciprocal" tariffs he placed on nearly every country worldwide in April last year.

But the nation's highest court ruled 6-3 against the use of the law and dealt a huge blow to the Trump administration's economic agenda. The case before the nation's highest court was viewed by three conservative jurists appointed by Trump in his first term, yet they still ruled against him.

Chief Justice John G. Roberts Jr. wrote: "The president asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope. In light of the breadth, history, and constitutional context of that asserted authority, he must identify clear congressional authorization to exercise it."

The justice's comments suggest that the statute used does not allow the president to impose the tariffs in the manner he did.

Justices Clarence Thomas, Samuel A. Alito Jr. and Brett Kavanaugh also dissented.

Their decision will have far-reaching economic implications for the US and its trading partners. Trump had dubbed the case one of the most important in US history.

His administration has been closely watching the ruling. Trump had warned that if it did not go his way then it would force his team to roll-back multiple trade policies.

The ruling by the Supreme Court could also see the administration forced to refund the fees to big retailers who had to pay out money to cover the tariffs.

Justice Kavanaugh wrote that if refunds have to be issued to companies owed from the levies collected, it could be a huge "mess."

The US "may be required to refund billions of dollars to importers who paid" the tariffs, Kavanaugh wrote, "even though some importers may have already passed on costs to consumers or others".

Economists had repeatedly warned that the tariffs would sting US businesses, and consumers in particular, as they would be hit with the extra costs on importing goods into the country.

Gary C. Hufbauer, an expert on international trade and non-resident senior fellow at the Peterson Institute of International Economics, told China Daily that up until August 2025, "US business firms have absorbed about 75 percent of the tariffs through compressed profit margins. Consumers have paid the other 25 percent in higher prices, particularly household items like clothing, footwear and furniture.

"This division of the burden is not sustainable ... By the spring of 2026, most of the burden will be shifted to consumers through higher prices."

Imports from China had faced very high levies, so too other nations in the European Union and elsewhere. They were constantly subject to change.

The tariffs were unpopular with consumers especially during a cost-of-living crisis.

But, while the tariffs have been struck down under the emergency law, Trump can still impose the levies via another law if he can find a suitable way to do it, say experts.

Under the Constitution, Congress has the power to impose tariffs, the Associated Press reports.

The Trump administration rolled out the 1977 law arguing that the president could impose the tariffs due to an emergency, especially with drugs flowing into the US from the southern border.

Previously, the law had been used by other presidents, especially for sanctions, but Trump was the first to use it to impose widespread import taxes.

In April, he slapped the so-called "reciprocal" tariffs on most countries sparking concern from business groups, and international leaders.

He also imposed tariffs on the US's closest neighbors such as Canada and Mexico. He said at the time that it was to tackle a drug trafficking emergency that was having a grave impact on the American public.

This and other decisions to enact tariffs were met with several lawsuits and criticism from political opponents and US business groups.

Industry watchdogs also warned that the levies would impact every kind of goods that they import – especially from China, from toys to furniture and electronics. The lawsuits argued that use of the emergency powers laws was not a sufficient justification to enact tariffs.

The Trump administration announced that the Treasury has collected over $133 billion from the taxes, according to federal data.