Supreme Court Strikes Down Most Trump Tariffs

This is a developing story and will be updated throughout the day.

10:40 a.m. (Eastern)

President Donald Trump doesn’t have the authority to enact broad tariffs on U.S. trading partners, the Supreme Court of the United States ruled Friday, saying that’s a power reserved for Congress. Though the president promised later in the day to enact new tariffs citing different authorities.

Most manufacturers have opposed steep tariffs, saying they raise the cost of components and raw materials. However, smaller numbers of U.S.-based producers that have domestic supply chains had been cheering the actions.

The 6-3 ruling (Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh dissented) impacts most of the tariffs Trump has enacted since last year, but not fees on steel and aluminum imports that he enacted in his first term and former President Joe Biden continued.

The ruling forbids the 10% baseline tariffs on all countries that Trump enacted citing the International Emergency Economic Powers Act (IEEPA). The president enacted larger tariffs on key countries and has been using the threat of reciprocal tariffs to get trading partners to the negotiating table.

In his rejection of Trump’s actions, Chief Justice John Roberts wrote (PDF dowonload):

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.

IEEPA’s grant of authority to “regulate . . . importation” falls short. IEEPA contains no reference to tariffs or duties. The Government points to no statute in which Congress used the word “regulate” to authorize taxation.  And until now no President has read IEEPA to confer such power.

We claim no special competence in matters of economics or foreign affairs. We claim only, as we must, the limited role assigned to us by Article III of the Constitution.  Fulfilling that role, we hold that IEEPA does not authorize the President to impose tariffs.

3:02 p.m. (Eastern)

President Trump plans to enact new 10% tariffs using existing but limited presidential powers.

“Today I will sign an Order to impose a 10% GLOBAL TARIFF, under Section 122, over and above our normal TARIFFS already being charged,” Trump said on his Truth Social platform. “And, we are also initiating several Section 301 and other Investigations to protect our Country from unfair Trading practices.”

As discussed in earlier updates included further down this story, Section 122 allows the president to enact up to 15% tariffs for up to 150 days. Longer-term trade actions, such a tariffs to counteract foreign dumping (Section 301), require federal agencies to find that U.S. companies have suffered trade harm. Such rulings are traditionally appealed in court. 

1:40 p.m. (Eastern)

In a strongly worded news conference, Trump resonded harshly to the ruling, calling the six justices who ruled against the tariffs a “disgrace to our nation.”

“I’m ashamed of certain members of the court, absolutely ashamed for not having the courage to do what’s right for our country,” Trump said. He later added, “They’re very unpatriotic and disloyal to our Constitution. It’s my opinion that the court has been swayed by foreign interests and a political movement that is far smaller than people would ever think.”

The president promised to use other tariff authority to enact duties on imports. Though he didn't spell out which he'd use (at the time, see the update above for which statutes he plans to use), several experts have noted that he can enact up to 15% duties for up to 150 days via existing regulations. 

Other avenues to enact tariffs such as through the Commerce Department of the U.S. Trade Authority could take more time and could be subject to court reviews. 

“The good news is that there are methods, practices, statues and authorities… that are even stronger than these IEEPA tariffs,” Trump said.

12 p.m. (Eastern)

The Agence France-Presse wire service writes:

U.S. business groups cheered the ruling, with the National Retail Federation saying this “provides much-needed certainty” for American firms and manufacturers. “We urge the lower court to ensure a seamless process to refund the tariffs to U.S. importers,” the federation said.

The justices did not address the degree to which importers can receive refunds. But dissenting Justice Brett Kavanaugh warned that this process—as acknowledged during oral arguments—could be a “mess.”

EY-Parthenon Chief Economist Gregory Daco told AFP that the loss of IEEPA tariff revenues for the U.S. government could amount to around $140 billion.

The ruling will likely bring the average tariff rate from 16.8% to around 9.5%, he added ahead of the ruling.

But lower levels will likely be temporary as the government seeks other ways to reimpose some of the sweeping duties, he added.

The Budget Lab at Yale University similarly estimates consumers face an average effective tariff rate of 9.1% with Friday's decision, down from 16.9%. But it said this "remains the highest since 1946," excluding 2025.

For now, the European Union said it was studying the court ruling and will remain in close contact with the Trump administration.

Britain plans to work with the United States on how this affects a trade deal between both countries, while Canada said the decision affirms that Trump's tariffs were “unjustified.”

Striking down the emergency tariffs “would constrain the president’s ambitions to impose across-the-board tariffs on a whim,” said Erica York of tax policy nonprofit the Tax Foundation.

But it still leaves him other statutes to use for tariffs, even if they tend to be more limited in scope—or require specific processes such as investigations—York told AFP.

Harry Moser, a regular IndustryWeek contributor and founder of the Reshoring Initiative, says:

The Supreme Court decision is a setback for reindustrialization. President Trump should take this decision as an opportunity to pursue a better alternative.

President Trump’s tariffs and President Biden’s grants are tools to deal with U.S. manufacturing cost being 10 to 20% higher than most other developed countries and 50 to 100% higher than emerging market countries. That unlevel playing field is caused primarily by the U.S. dollar being overvalued vs. the other currencies due to our reserve currency status. The best solution is to allow the U.S. dollar to adjust as needed to eliminate the $1.2 trillion trade deficit. Currency’s advantages vs. tariffs include:

• Simple to design and implement. No exclusions
• Transparent
• No expensive trade lawyer help
• Also helps with:
• Goods exports due to lower USD and no retaliation
• Services imports and exports
• Less unintended consequences such as tariffs on steel and machine tools and alienating our allies
• Less avoidance and cheating
• Allows entry mfg. wages to move higher than service wages by raising the ceiling imposed by low priced imports
• Fix one distortion, the overvalued dollar. Let the market pick winners and losers

We support Dr. John Hansen’s Market Access Charge (MAC) as a tool to lower the dollar.

Regular IndustryWeek contributor Lauren Pittelli, a supply chain expert and principal of Baker Logistics:

This is wonderful news for importers, manufacturers, and the American consumer. I’m waiting for information on whether refunds will be available and look forward to helping our clients recoup every penny they’re entitled to.

The ruling will also return some needed stability and predictability to trade policy - no more use of tariffs as punishment for foreign policies Washington doesn’t like.

Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce:

The Supreme Court’s decision is welcome news for businesses and consumers. Over the past year, the Chamber has been working with small and midsize businesses around the country that have seen significant cost increases and supply chain disruptions as a result of these tariffs. Swift refunds of the impermissible tariffs will be meaningful for the more than 200,000 small business importers in this country and will help support stronger economic growth this year.

We encourage the administration to use this opportunity to reset overall tariff policy in a manner that will lead to greater economic growth, larger wage gains for workers, and lower costs for families.

Holland & Knight lawyer Patrick Childress, a former attorney at the Office of the U.S. Trade Representative, says the ruling is a blow to Trump’s plans, but it had been expected. 

Officials have been working on a 'Plan B' to replace the now-defunct IEEPA tariffs with equivalent—or close to equivalent—tariffs under alternative statutory authority.  This raises two questions: how quickly can the administration impose new tariffs, and what authority will it use?  

…If the administration uses authorities like Section 301 (U.S. Trade Authority rules to opposed dumping) or Section 232 (Commerce Department authority to counter other countries’ trade barriers) that require investigations, we could be waiting months for replacement tariffs. But if the administration uses authorities like Section 122 (presidential actions limited to 15% tariffs for 150 days) that allow for the imposition of tariffs with less process, we could be looking at replacement tariffs very soon, perhaps even this afternoon.   

The latter approach is the more likely outcome here.  We should expect replacement tariffs to arrive in days or weeks, not months.  Officials at USTR and throughout the executive branch have had time to prepare for this outcome, and they will have a plan ready to deploy to quickly replace the IEEPA tariffs.   

More broadly, today's Supreme Court ruling will not convince the administration to walk away from its signature international economic policy tool.  Instead, expect the administration to double down on tariffs in the coming weeks.

National Association of Manufacturers President and CEO Jay Timmons and Rockwell Automation Chairman and CEO and NAM Board Chair Blake Moret:

Today’s decision underscores the importance of clarity and durability in U.S. trade policy.

Manufacturers rely on stability to plan investments, grow operations and create jobs. Ongoing legal and policy uncertainty makes it more difficult to make the long-term decisions that drive American competitiveness.

Now is the time for policymakers to work together to provide a clear and consistent framework for trade, one that strengthens domestic manufacturing, secures supply chains for critical inputs, empowers the administration to negotiate strong trade deals and ensures manufacturers can access the materials and components they need to grow, compete and create jobs in America and the export markets they need to sell U.S.-made goods around the world. If tariffs are utilized as a tool, they should be targeted to countries engaged in specific unfair trade practices, particularly by nonmarket economies.

We share the president’s goal of ushering in the greatest manufacturing era in American history, and clear, durable trade policies will help manufacturers deliver on that promise. Strengthening supply chain resilience will ensure manufacturers can expand production, compete globally and power economic growth here at home.

The NAM will continue working with leaders in Congress and the administration to advance durable solutions that support manufacturers, strengthen America’s industrial base and benefit the millions of Americans who depend on a strong manufacturing economy.

Several of IndustryWeek parent company Endeavor B2B's brands are writing about the Supreme Court ruling. For more information, read:

• Trump's emergency tariffs ruled to be illegal: Plant Service's Tom Wilk summarizes the rulings and details how some manufacturers have been preparing for it. 
• Supreme Court strikes down Trump-era tariffs, raising implications for infrastructure costs: Wastewater Digest's Alex Cossin notes that the ruling had been closely watched by infrastructure groups as tariff costs impacted the price tags on big civic projects.
• Supreme Court Hands Trump Tariffs Plan a Setback: T&D World (transmission and distriubtion) editor Jeff Postelwait discusses the ruling's impact on power utilities.
• Tariffs Struck Down by Supreme Court: MH&L (material handling and logistics) editor Adrienne Selko shares the ruling and reactions from several supply chain groups. 
• Supreme Court Strips Trump's Emergency Tariff Authority: Chemical Processing's Traci Purdum details next steps for chemical producers. 
• Supreme Court Ruling Limits Presidential Tariff Powers, Impacting Machine Vision Industry: Vision Systems Design editor Sharon Spielman details how tariffs will impact camera-based quality control systems used in many manufacturing operations. 
• SCOTUS limits presidential tariff authority, injecting new oil and gas industry uncertainty: At The Oil & Gas Journal, editor Mikaila Adams discusses how because steel tariffs will remain in place, costs will likely not fall for energy exploration companies. 
• Supreme Court decision to strike down tariffs could ease concerns in plastics industry: Plastics Machinery & Manufacturing staffers Lynne Sherwin and Karen Hanna's story focuses on hopes from plastics producers for relief from tariff-related price increases on equipment. 
• Supreme Court Rules Against Trump’s Presidential Tariff Authority: Supply Chain Connect's Tyler Fussner discusses the tariff decision's impact on global logistics. 
• Supreme Court Strikes Down Trump Tariffs: Power & Motion's Sara Jensen spells out the reaction of hydraulics and pneumatics equipment manufacturers. 
• Supreme Court Rules Against Trump Tariffs: Contractor's editor Steve Spaulding reports on the suit that was brought by small businesses.