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Supreme Court Strikes Down Trump’s Tariffs, Limiting Presidential Trade Powers

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The Supreme Court on Friday struck down most of President Donald Trump’s sweeping “reciprocal” tariffs in a 6–3 ruling, sharply curbing the use of emergency powers for trade and triggering a relief rally in global stocks.nbcnews +1 The decision put at risk well over $100 billion in levies collected under the invalidated regime and raised immediate questions over potential refunds for importers and the future of White House trade strategy.reuters +1

Chief Justice John Roberts, writing for a coalition of conservatives and liberals, held that the International Emergency Economic Powers Act (IEEPA) of 1977 did not give the president authority to unilaterally impose broad, indefinite tariffs on nearly all U.S. trading partners.nbcnews +1 The ruling was a major legal and political setback for a central pillar of Trump’s second-term economic agenda.

What the Court Said – And How It Reshapes Presidential Power

The majority concluded that IEEPA’s authorization to “regulate … importation” during a national emergency did not extend to imposing tariffs, invoking the Court’s “major questions” doctrine to demand “clear congressional authorization” for such sweeping economic action.nbcnews +1 Roberts wrote that the power to tax imports resides with Congress and that when lawmakers intend to delegate tariff authority, “they say so,” pointing to other trade statutes that explicitly mention duties.nbcnews +1

Justices Neil Gorsuch and Amy Coney Barrett joined Roberts and the Court’s three Democratic appointees, while Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh dissented.nbcnews Kavanaugh argued that tariffs are a “traditional and common tool to regulate importation” and warned the ruling could create a “mess” over refunds and weaken the presidency in foreign economic crises.nbcnews +1 The decision further entrenched the Court’s recent pattern of limiting expansive executive actions with large economic stakes, this time aimed at a Republican administration rather than a Democratic one.nbcnews +1

Market Relief and a Looming Tariff-Refund Fight

Equity markets rallied on the news as investors bet that rolling back tariffs as high as 50% on some partners and up to 145% on China would ease costs for companies and consumers.reuters +1 The S&P 500 rose about 0.7% in early trading after the ruling, with retail and apparel names such as Nike and Target among the strongest gainers, while a Bloomberg dollar index and U.S. Treasury yields slipped as the trade shock premium faded.reuters +2

For businesses, the immediate focus shifted to whether, and how fast, the government will return money collected under tariffs now deemed unlawful. U.S. Customs and Border Protection reported roughly $134 billion had been collected under the challenged duties as of mid-December, while independent estimates put the figure even higher and suggest potential refunds approaching $150 billion.reuters +1 Trade lawyers expect years of litigation over which importers qualify for repayment and how the Treasury will administer claims, a process likely to collide with budget politics in Washington.cbsnews +1

The Bigger Picture

The ruling significantly narrows a key tool Trump used to pressure allies and adversaries, forcing the administration to rely on more constrained trade statutes that require investigations, consultations and narrower targeting.reuters +1 It also marks one of the clearest modern statements that major trade and tax decisions must originate in Congress, not the Oval Office—setting a precedent that could shape how future presidents, of either party, wield emergency economic powers in everything from sanctions to climate-related trade measures.nbcnews +1