The Supreme Court scrambled the US trade landscape Friday when it struck down the centerpiece of President Trump’s second-term tariff program, ruling 6-3 that his sweeping blanket tariffs are illegal.
The ruling came just over one year into Trump’s second term and after skeptical questioning from key justices during oral arguments last November and appears set to immediately halt a massive section of Trump’s tariffs. Those tariffs were first announced last year on “Liberation Day” using a 1977 law called the International Emergency Economic Powers Act (IEEPA).
“IEEPA does not authorize the President to impose tariffs,” read the decision, written by Chief Justice John Roberts.
Trump attacked the high court in his first response Friday, particularly the justices in the majority, saying they were a “disgrace to our nation.” He hinted that the administration would pursue alternative methods toward implementing its trade goals.
The ruling also raised the question of refunds, which could return an estimated $129 billion to importers in the months ahead. It upholds two lower courts — including the US Court of International Trade — that previously found Trump did not have the authority to impose global tariffs using the 1977 law.
The decision will likely have wide-ranging ramifications, affecting global trade, consumers, companies, inflation and the pocketbooks of every American. In recent weeks, Trump has already made plans to roll back some tariffs on metals, including on steel and aluminum goods, as he and his administration seek to battle an affordability crisis ahead of the midterm elections.
Read more: What Trump promised with his ‘Liberation Day’ tariffs — and what he delivered
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US Supreme Court strikes down Trump’s tariffs
The US Supreme Court changed the US trade agenda on Friday, ruling that blanket tariffs are illegal and striking down President Trump’s most sweeping tariffs.
In a 6-3 decision, the court held that the 1977 International Emergency Powers ACT (IEEPA) does not give Trump the authority to impose taxes without approval from Congress.
This ruling will mean that much of the administration’s current tariff agenda will be brought to a halt, especially those tariffs first announced in April last year, on what has come to be known as Trump’s “Liberation Day” tariffs.
Today, economists at Penn-Wharton said that over $175 billion in tariff revenue may need to be refunded if the Supreme Court rules against Trump’s tariffs.
However, according to SCOTUSblog, the court mentioned nothing about whether the government should go about returning the billions of dollars it made from importers.
Justices Clarence Thomas, Brett Kavanaugh, and Samuel Alito all dissented.
Justice Kavanaugh, in his dissent, said, “The United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others.”
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