Why did the Supreme Court rule against tariffs? Here’s what the justices said.
In one of the most important decisions of the year, the U.S. Supreme Court on Friday struck down President Donald Trump’s emergency tariffs.
Tariffs were one of Mr. Trump’s signature policies, but the court ruled — in a 6-3 decision that divided the court’s six conservative justices — that the president could not use an emergency economic powers law to justify imposing tariffs.
The decision applies only to what Mr. Trump called his “Liberation Day” tariffs of April 2 last year (although the tariffs apply to more than 180 countries). It does not apply to certain other customs duties such as those on steel, aluminum and automobiles.
Why we wrote this
The Supreme Court struck down the Trump administration’s use of an emergency economic law to set sweeping tariffs, ruling that the 1977 law did not grant the president such broad authority. President Donald Trump has pledged to use other laws to keep tariffs high.
The majority opinion did not address how the government should respond to the sudden removal of tariffs that have been in place for nearly a year and have raised more than $200 billion, according to government officials. The economic and foreign policy consequences are expected to be far-reaching, but for the Supreme Court, the tariffs represent an exercise of presidential power that goes too far, even for a court that has been reluctant to police the White House.
The Trump administration had argued that because the International Emergency Economic Powers Act (IEEPA) of 1977 empowers the president to “regulate…imports” during a national emergency, it authorized him to collect Liberation Day tariffs.
Six members of the high court – including two justices appointed by Mr Trump – disagreed.
“The President asserts that he has the independent authority to impose tariffs on imports from any country, of any product, at any time, and for any duration,” Chief Justice John Roberts wrote in the majority opinion.
The words “regulate” and “importation” – separated by 16 other words in IEEPA, Chief Justice Roberts noted – “cannot support such a weight.”
He was joined by the court’s three liberal justices, Elena Kagan, Ketanji Brown Jackson and Sonia Sotomayor, as well as two Trump-appointed justices, Neil Gorsuch and Amy Coney Barrett.
Mr. Trump called the decision “deeply disappointing” and criticized the justices in the majority, suggesting that corruption played a role.
“I am ashamed of some members of the Court… who did not have the courage to do what is right for our country,” he said hours after the decision was rendered. “I think the court was influenced by foreign interests.”
His administration is now considering imposing tariffs using other federal laws, he announced, including a 10 percent global tariff based on Section 122 of the Trade Act of 1974, which allows the president to set temporary tariffs. The justices did not rule on whether the government should repay tariff revenue already collected. Mr Trump said the issue could now be subject to “years” of litigation.
Judges turn to Congress
The ruling ends lawsuits filed by U.S. companies claiming the tariffs threatened their solvency.
No one disputes that the president has some power to set tariffs, but tariffs of the scope and magnitude of those asserted by Mr. Trump on “Liberation Day” exceed constitutional limits, according to the Supreme Court’s majority opinion. The Constitution gives Congress the authority to manage finances, and although the legislature has delegated some emergency powers to the White House with the IEEPA, the statute does not mention the word “tariffs” or “fees.”
“It stands to reason that if Congress had intended to confer the distinct and extraordinary power to impose tariffs, it would have done so expressly – as it has consistently done in other tariff statutes,” Chief Justice Roberts wrote.
In dissent, Justice Brett Kavanaugh – joined by Justices Clarence Thomas and Samuel Alito – argued that the IEEPA effectively gives the president the power to impose tariffs. “Like quotas and embargoes, tariffs are a traditional and common tool for regulating imports,” he wrote.
At the heart of the high court’s 170-page ruling is the major issue doctrine, a court directive that the White House can only advance policy addressing a “major issue” if Congress “clearly says” that it can do so.
The six conservative justices were divided on this issue. Chief Justice Roberts, Justice Gorsuch, and Justice Barrett agreed that Congress did not speak “clearly enough” in IEEPA to authorize the Trump administration’s tariffs.
Justice Kavanaugh, along with Justices Clarence Thomas and Samuel Alito, held exactly the opposite. Moreover, Justice Kavanaugh wrote in his dissent, the decision represented the first time the court applied the doctrine in the foreign policy context.
Justice Kavanaugh was also the only one to recognize the practical implications of the Supreme Court’s decision.
“The Court says nothing today about whether, and if so how, the government should return the billions of dollars it collected from importers,” he wrote. The decision, he added, “could [also] generate uncertainty regarding various trade agreements.
Gorsuch extends his hand
Chief Justice Roberts, for his part, highlighted the Supreme Court’s “limited role” in the tariff dispute – that role being to determine whether Liberation Day tariffs are legal under the IEEPA. The High Court, he emphasized, “claims[s] no particular skills in economics or foreign affairs.
As the country begins to grapple with the fallout from the Court’s decision, Justice Gorsuch has drafted a separate agreement aimed at healing divisions both within the Court and in the country.
The justices’ debates over the major questions doctrine “constitute an interesting turn of events,” he wrote. “Every camp is worth a visit.”
Over 46 pages, he analyzed and criticized all the arguments of his colleagues. But he concluded with what appears to be a broader message to Americans, acknowledging their likely disagreements over Mr. Trump’s tariff campaign.
“For those who think it is important for the Nation to impose more tariffs, I understand that today’s decision will be disappointing,” he wrote. “All I can offer them is that most important decisions affecting the rights and responsibilities of the American people … go through the legislative process for a good reason.”
“It can be tempting to bypass Congress when an urgent problem arises. But the deliberative nature of the legislative process was the whole point of its design,” he added. “There, deliberation tempers impulses and compromise transforms disagreements into workable solutions. »
“For some today, the weight of these virtues is obvious. For others, it may not seem so obvious,” he continued. “But if history is to be believed, the situation will reverse itself and the day will come when those disappointed by today’s outcome will appreciate the legislative process for the bulwark of freedom that it is.”
Historical consistency
That the high court ruled on a key element of Mr. Trump’s economic policy is not surprising, some historians say.
“The Supreme Court has intervened in economic policy since the beginning of the Republic,” says Richard John, a historian at Columbia University.
His decision against the administration is also not unusual from a historical perspective. “Throughout the Republic, the tendency was certainly to favor the market over the state,” says Gautham Rao, a legal historian at American University. This decision fits “quite clearly into this kind of historical trajectory”.
What is unusual about this case is that President Trump invoked a vaguely defined “emergency” to enact drastic tariffs that affected most of the United States’ trading partners.
Previous presidents have intervened in specific economic conflicts, such as Theodore Roosevelt taking on anthracite coal operators in 1902 and John F. Kennedy forcing steel producers to reverse a price increase. “But using international trade as a kind of leverage in a very public way is unique” to President Trump, says Mr. John of Columbia.
The administration has pledged to use other authorities to rebuild its tariff regime. But these legal options come with restrictions, says Alan Wm. Wolff, a senior fellow at the Peterson Institute for International Economics and former deputy director general of the World Trade Organization.
Some of the laws the Trump administration could base new tariffs on have not been used in 50 years or more. Others require formal government investigations to establish that the tariffs are justified. One of them, Section 122 of the Trade Act of 1974, which Mr. Trump has said he wants to use, allows the president to set temporary tariffs that expire after 150 days unless Congress decides to extend them.
