The Supreme Court struck down President Trump’s tariffs on nearly all imported goods, a core element of his economic strategy to combat trade deficits and revive U.S. manufacturing. Businesses and a dozen states led by Democratic attorneys general had challenged the policy, arguing it twisted the 1977 International Emergency Economic Powers Act beyond its intent.

Chief Justice John Roberts, in the majority opinion, rejected the administration’s claim that the law’s power to ‘regulate’ imports during an ‘unusual and extraordinary threat’ included unlimited tariffs. ‘The President asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope,’ Roberts wrote. ‘In light of the breadth, history, and constitutional context of that asserted power, he must identify clear congressional authorization.’

Roberts drew on the court’s ‘major questions’ doctrine, which demands plain statutory language for executive actions with vast economic impact. He cited prior decisions blocking President Joe Biden’s student loan forgiveness plan, eviction moratorium extension and EPA power plant regulations. Congressional practice, Roberts added, shows explicit limits when delegating tariff authority. ‘What common sense suggests, congressional practice confirms.’

Justice Brett Kavanaugh dissented, joined by Justices Clarence Thomas and Samuel Alito. Tariffs, he argued, qualify as a ‘traditional and common tool to regulate importation’ under the law’s text, history and precedent. ‘The tariffs at issue here may or may not be wise policy,’ Kavanaugh wrote. ‘But as a matter of text, history, and precedent, they are clearly lawful.’

Kavanaugh warned the ruling leaves unresolved how to handle billions in tariffs already collected, predicting a ‘mess’ in refunds. Thousands of companies filed suits seeking reimbursements after Trump invoked the law in early 2025.

The 6-3 conservative majority’s decision marks the first full Supreme Court rebuke of a second-term Trump policy. Lower courts, including a split U.S. Court of Appeals for the Federal Circuit, had favored challengers like Learning Resources and V.O.S. Selections. Trump previously won interim stays keeping his policies in place during litigation.

Trump had projected the tariffs would generate over $2 trillion for the federal budget over a decade. He also used separate duties on Mexico, Canada and China to curb fentanyl flows. Administration officials warned of ‘catastrophic consequences’ for national security, foreign policy and the economy without them.

Officials pledged quick use of alternatives, like national security tariffs or retaliatory measures against trade surplus nations. Retailers and importers face ongoing uncertainty over costs, even as they welcome the limits on emergency powers.

Canadian Chamber of Commerce President and CEO Candace Laing called the outcome a legal win, not a trade policy shift. ‘Canada should prepare for new, blunter mechanisms to be used to reassert trade pressure, potentially with broader and more disruptive effects,’ she said in a statement.

William Bain, head of trade policy at the British Chambers of Commerce, noted U.S. steel and aluminum tariffs relied on different laws. ‘While this decision gives clarity on the President’s executive powers to raise tariffs, it does little to clear the murky waters for business,’ Bain said.

The three liberal justices—Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson—concurred in result but not reasoning. Kagan’s separate opinion held the tariffs invalid on statutory text alone, without embracing the full ‘major questions’ framework.

Polls show broad opposition to the tariffs, which raised prices for consumers and firms. Small businesses argued ‘regulate’ does not mean ‘tax,’ a power reserved to Congress under the Constitution. The Justice Department had called the measures regulatory for policy goals, despite Trump’s revenue boasts.

Congress passed the 1977 act post-Watergate to curb executive overreach, mainly for sanctions. Trump stretched it to address manufacturing decline from trade imbalances.