The US Supreme Court has ruled against President Donald Trump’s imposition of tariffs in a long-awaited ruling that will be seen as a blow for the president’s economic agenda. By 6-3 the court found that President Trump exceeded his authority by using a law reserved for national emergencies to impose tariffs.
Here are 10 key takeaways from the US Supreme Court ruling on Trump’s tariffs:
1. Executive Power Is Not Unlimited
The ruling confirms that executive actions, especially those with vast economic implications, must be clearly authorised by Congress. The court emphasised that the International Emergency Economic Powers Act (IEEPA) cannot be used to impose sweeping tariffs without legislative approval, setting a clear limit to executive powers in trade.
2. The Major Questions Doctrine
The decision upheld the “major questions doctrine”, which states that actions by the executive branch involving vast economic or political significance require explicit congressional authorisation. This reinforces the principle that executive power cannot bypass congressional authority on major economic decisions.
3. Tariffs Cannot Be Imposed Unilaterally
The ruling makes clear that the president cannot unilaterally impose tariffs based on the IEEPA, a law originally designed for national emergencies, not for normal trade policy. This decision limits the ability of future presidents to use similar actions in the absence of specific authorisation from Congress.
4. Congress Retains Control Over Taxes and Tariffs
The ruling reaffirms that Congress, not the president, has the constitutional authority to impose taxes and tariffs. The court emphasised that any executive action involving taxes, such as tariffs, must be clearly authorised by a law passed by Congress.
5. It Could Lead to Refunds of Collected Tariffs
Since the ruling invalidated Trump’s tariffs, the $175 billion collected from tariffs could potentially be refunded to businesses and consumers. This decision opens the door for legal challenges from affected businesses seeking compensation for tariffs that were unlawfully imposed.
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It is imperative to note that the court also did not mandate refunds of the tariffs collected to date, either to consumers or to manufacturers reliant on tariffed imports.
6. Trade Policy Uncertainty Could Continue
Despite the ruling limiting Trump’s use of the IEEPA for tariffs, there is still uncertainty around future trade policy. Experts caution that alternative legal justifications could be used by future administrations to impose tariffs, meaning uncertainty in US trade relations is likely to persist.
7. The Court’s Role in Trade and Foreign Policy
The ruling demonstrates the Supreme Court’s role in shaping trade policy. By striking down the tariffs, the court played a significant role in protecting constitutional boundaries, ensuring that major economic and foreign policy decisions are not made unilaterally by the executive branch.
8. Major Economic and Political Significance of Trade Decisions
The ruling is a landmark in highlighting how trade decisions with significant economic and political consequences need to be carefully scrutinised. The Court’s use of the major questions doctrine highlights that such decisions should involve both the executive and legislative branches to balance power.
9. Legal Precedent for Future Trade Disputes
This ruling sets an important legal precedent for future trade disputes, as it reinforces the importance of Congressional approval for significant tariffs and trade measures. It could be cited in future cases challenging the unilateral imposition of tariffs or other major trade policies by the executive.
10. A Push for More Transparent Trade Decisions
The ruling sends a message about the importance of transparency and due process in trade policy. By requiring clear congressional authorisation, the decision encourages accountability and clarity in how the US government manages international trade relations and tariffs, making it harder for any one branch of government to act without oversight.
Sunday Michael Ogwu is a Nigerian journalist and editor of Pinnacle Daily. He is known for his work in business and economic reporting. He has held editorial roles in prominent Nigerian media outlets, where he has focused on economic policy, financial markets, and developmental issues affecting Nigeria and Africa more broadly.
