The Supreme Court struck down President Trump’s far-reaching global tariffs on Friday, handing him a significant loss on an issue crucial to his economic agenda.
Delivered on Friday, the decision nullifies a contentious framework that allowed President Trump to impose sweeping tariffs on products imported into the US the previous year.
The 6-3 decision centers on tariffs imposed under an emergency powers law, including the sweeping “reciprocal” tariffs President Trump levied on nearly every other country.
Since taking office for the second time, Trump has used tariffs as a tool for negotiations and pressure.
Last year, he used his extraordinary emergency economic powers to impose new taxes on almost all US trading partners.
With the choice of three conservative jurists during his first term, President Trump helped build the country’s highest court, and this is the first significant piece of his expansive agenda to face the court directly.
These comprised distinct sets of duties aimed at major allies Mexico, Canada, and China over immigration and illegal drug flows, as well as “reciprocal” taxes over trade practices that Washington considered unfair.
The majority concluded that the president’s unilateral setting and alteration of tariffs is unconstitutional as Congress obviously has the authority to impose taxes. Chief Justice John Roberts wrote, “The Executive Branch was not given any portion of the taxing authority by the Framers.”
The court said on Friday, “had Congress intended to convey the distinct and extraordinary power to impose tariffs” with IEEPA, “it would have done so expressly, as it consistently has in other tariff statutes.”
According to information obtained, the decision has no bearing on sector-specific tariffs that President Trump has separately placed on imports of steel, aluminium, and other commodities.
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Meanwhile, numerous government investigations are still ongoing, which may eventually result in additional sectoral levies of this kind.
In their judgement on Friday, the Supreme Court upheld lower court rulings that Trump’s IEEPA tariffs were unlawful, with three liberal justices joining three conservatives.
Conservative Justices Brett Kavanaugh, Clarence Thomas and Samuel Alito dissented.
Chief Justice John Roberts, in delivering his opinion, noted that “IEEPA contains no reference to tariffs or duties.”
Recall that a lower trade court had declared in May that President Trump had overreached himself with the all-inclusive taxes and prevented the majority of them from going into effect? However, that decision had been halted pending an appeal by the administration.
Prior to the decision, Gregory Daco, chief economist at EY-Parthenon, told AFP that the removal of these taxes would probably lower the average tariff rate from 16.8% to about 9.5%.
However, he cautioned, this might just be a temporary solution as the government looks for alternative means to reinstate sweeping responsibility.
Also at stake are tariff revenues for the government, Daco said, estimating a loss in government revenues of around $100 billion to $120 billion.
The extent of reimbursements available to importers was not discussed by the justices.
However, as recognised during oral arguments, Kavanaugh cautioned that this procedure might be a “mess.”
According to Erica York of the tax policy nonprofit the Tax Foundation, lifting the emergency tariffs “would constrain the president’s ambitions to impose across-the-board tariffs on a whim.”
However, York told AFP that he still has other legislation to use to obtain tariffs, even if they are typically more narrowly defined or call for particular procedures like investigations.
Meanwhile, President Trump will hold a press briefing at 12:45 EST (17:45 GMT) on the Supreme Court’s decision to strike down many of his tariffs.
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