The Supreme Court has struck down tariffs imposed by former President Trump, ruling that his use of the International Emergency Economic Powers Act (IEEPA) to enact the tariffs was unlawful. The case, Learning Resources, Inc. V. Trump and Trump v. V.O.S. Selections, consolidated lawsuits brought by slight businesses and states challenging Trump’s authority.
The Core of the Dispute
The central issue revolved around IEEPA, a law granting the President broad powers to address national emergencies through commerce-related actions like export restrictions and quotas. However, the Court found that “tariffs,” “duties,” or “customs” were not among the actions authorized by the law. The majority opinion, written by Chief Justice Roberts, stated that the tariff scheme was based on an interpretation of the word “regulate” that “those words cannot bear such weight.”
Justice Kagan, joined by Justices Sotomayor and Jackson, highlighted that IEEPA allows a President to take 99 different actions to address a foreign threat, but imposing tariffs is not one of them, as it does not involve raising revenue.
Constitutional Implications
The Justices found the question of revenue central to the case, as the power to tax is constitutionally assigned to Congress, not the President. The Court previously upheld the Affordable Care Act in 2012 by determining its individual mandate was a form of tax. The Solicitor General argued the tariffs shouldn’t be considered taxes, a position met with skepticism even from conservative Justices.
Economists estimate Trump’s tariffs generated nearly two hundred billion dollars in revenue. However, the Court’s decision does not address whether or how this money should be refunded. Hundreds of importers had already filed suits seeking refunds and those cases can now proceed.
A Divided Court
Despite the 6–3 ruling against the tariffs, the decision was not entirely unified. There were seven separate opinions totaling 170 pages. Justice Kavanaugh authored a dissenting opinion over sixty pages long, joined by Justices Alito and Thomas, with Thomas also writing a separate dissent supporting broad presidential tariff powers. The majority opinion itself fractured midway through, with the three liberal Justices declining to join the section invoking the “major questions doctrine.”
Frequently Asked Questions
What is IEEPA?
IEEPA is a powerful tool that allows the President to take commerce-related actions, such as imposing export restrictions and quotas, in the case of a national emergency. However, the Court found that it does not authorize the imposition of tariffs.
Will importers receive refunds for tariffs already paid?
Hundreds of importers had already filed suits seeking refunds, but those cases were stayed pending the Court’s decision. With the decision handed down, those cases can now proceed, though the Court did not provide guidance on how refunds should be handled.
Was the Court unanimous in its decision?
No, the Court was divided. Even as there was a 6–3 majority striking down the tariffs, there was no full consensus on the reasoning behind the decision, as evidenced by the seven separate opinions issued.
Given the complexities of the ruling and the potential for ongoing litigation regarding revenue, how might this decision reshape the future of trade policy and presidential authority?
