The US Supreme Court has ruled against President Donald Trump's sweeping tariffs imposed by claiming emergency powers under the International Emergency Economic Powers Act (IEEPA). These included the so-called reciprocal blanket tariffs imposed on nearly all US trading partners last April and tariffs imposed to combat fentanyl trafficking. The decision is a welcome respite, but it leaves questions about what comes next.
Billions of dollars in refunds should now be required to importers who show that they paid the tariffs, but the details remain to be worked out. The court's 6-3 majority ruling did not address the refund issue, and Justice Brett Kavanaugh in a dissenting opinion noted that some of the costs may already have been passed on to consumers.
This is probably not the last we have heard from Trump on maintaining his high tariff wall. His trade team vowed to use other legal strategies to keep his tariffs in place if the court invalidated them. But other possible tariff statutes have major limitations.
The Supreme Court's decision was about separation of powers. The taxing and tariff powers are clearly accorded to the Congress under Article I of the Constitution. The Congress can delegate some tariff authority to the president for particular purposes and within specific limits, but the court did not address what he can do: This was about what he cannot do.
The court held that IEEPA is not a tariff statute. The Congress could not delegate this much of its authority—under the nondelegation doctrine. Chief Justice John Roberts's opinion for the court noted that where there is a major question, there is a need to give additional scrutiny to what Congress intended. What is crystal clear is that the Congress did not intend to grant to the president the broad tariff authority Trump claimed to underpin his major tariffs.
This decision is not about whether the policy choice of having tariffs was a good one, just that the president does not have such power under this statute.
If Trump moves to restore his tariffs via other authorities, that action will again be litigated. Do alternative statutes convey that much tariff power to the president, whether to retaliate, to safeguard the national security, to deal with balance of payments emergencies, or to deal with discrimination against US products in favor of other countries' products? Use of some or all of these other authorities would be tested.
A cautionary note for the Trump administration. The words of Supreme Court Justice Neil Gorsuch in his concurring opinion are worth paying attention to: "For those who think it is important for the Nation to impose more tariffs, I understand that today's decision will be disappointing. … But the deliberative nature of the legislative process was the whole point of its design. …The nation can tap into the combined wisdom of the people's elected representatives."
The next chapter will be Trump's call: whether to try using other authorities or seek new legislation.
For now, the Supreme Court did its job, just as the Constitution provided. That is a cause for celebration. Whether there will be restoration of tariffs, that will be a decision for another day.
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