President Donald Trump’s approach to foreign policy has frequently involved the use of tariffs. On Friday, the Supreme Court significantly limited his ability to wield this tool.
Supreme Court Limits Trump’s Tariff Power
Tariffs have turn into a “default foreign policy tool” for the second Trump administration, applied to countries from Cuba to China to Greenland, according to reports. He has used them to pressure nations, demand concessions, and address issues often unrelated to trade.
The Supreme Court’s 6-3 decision ruling many of Trump’s tariffs illegal “effectively neutralizes tariffs as a geoeconomic weapon,” said Edward Fishman, director of the Center for Geoeconomic Studies at the Council on Foreign Relations.
Unlike past administrations that primarily used tariffs to address trade imbalances or protect domestic industries, Trump has employed them for a wider range of purposes. These include responding to alleged failures to stem the flow of fentanyl, enforcing deportation policies, and protesting foreign purchases of Russian oil.
The tariffs were largely justified under the International Emergency Economic Powers Act (IEEPA), but the Supreme Court has now deemed them illegal. The administration has outlined alternative legal justifications, relying on the Trade Act of 1974, including a 10 percent “global tax” under Section 122 and new negotiations under Section 301.
However, these alternative authorities offer less flexibility than IEEPA. Section 122 tariffs are capped at 15 percent and expire after 150 days without congressional approval. As Fishman noted, it will now take “a lot longer” to use tariffs as leverage in trade negotiations.
While the court ruling focused on tariffs, it did not address the president’s ability to impose sanctions under IEEPA. Trump has sometimes appeared confused about the difference between tariffs and sanctions, and has expressed a preference for tariffs, believing they benefit the economy and bolster confidence in the dollar.
Trump acknowledged on Friday that IEEPA allows him to impose a blanket embargo on trade, but not to “charge a dollar.” His use of tariffs as coercion has had mixed results; Mexico halted oil shipments to Cuba, while China pushed back against threats with its own economic measures.
Frequently Asked Questions
What did the Supreme Court rule regarding Trump’s tariffs?
The Supreme Court ruled 6-3 against many of President Trump’s tariffs, finding they were illegal under the International Emergency Economic Powers Act (IEEPA).
What is the administration’s response to the ruling?
The administration has laid out alternative legal rationales for reconstructing its sanctions regime, mainly relying on the Trade Act of 1974, and has imposed a 10 percent “global tax” under Section 122 of the act.
Has the use of tariffs been successful under the Trump administration?
Trump’s use of tariffs has had a mixed track record. Mexico halted oil shipments to Cuba, but China pushed back against threats with its own economic measures.
Will the shift away from tariffs lead to a change in the administration’s overall foreign policy approach?
