The Supreme Court on Friday struck down a large set of President Trump’s tariffs, ruling that he does not have the broad authority he asserted to impose them using the declaration of a national emergency based on a specific 1977 law known as IEEPA.
The decision, written by Chief Justice John Roberts for a 6-3 majority that divided the court’s conservatives, deals a major blow to Trump’s signature economic policy and injects a fresh dose of uncertainty into the U.S. economy and the administration’s trade agenda. It may also have much broader implications, potentially undercutting other parts of the president’s agenda, including his approach to foreign policy, where he has repeatedly used tariffs or the threat that he might impose them as leverage to push for his desired outcomes.
The ruling, and Trump’s response to it, are likely to ensure that tariffs remain a political football throughout the coming election season as lawmakers are forced to stake out political positions and potentially take tough votes on the issue.
At the same time, the decision may not do much to immediately mitigate economic headwinds facing American consumers or ease some of the affordability concerns certain to be at the top of voters’ minds as we head to the midterm elections.
Trump lashes out: An enraged Trump railed against the decision and lashed out in striking terms at the justices who handed it down, bristling against the limit being placed on his power even as he insisted that the court ruling ultimately won’t matter because he has other paths to keep his tariffs in place. Trump made clear he saw the ruling as a personal betrayal.
“The Supreme Court’s ruling on tariffs is deeply disappointing, and I’m ashamed of certain members of the court, absolutely ashamed, for not having the courage to do what’s right for our country,” Trump said. He also accused the justices who ruled against him of being swayed by foreign interest and political correctness, calling them “fools” and “lapdogs,” among other insults. “They’re very unpatriotic and disloyal to our Constitution,” he said.
The court’s six conservatives were evenly split on the case, with two justices appointed by Trump, Neil Gorsuch and Amy Coney Barrett, joining Roberts and the three more liberal justices in the majority ruling against Trump’s policy and pushing back on the president’s effort to expand his executive power. Justices Samuel Alito, Brett Kavanaugh and Clarence Thomas dissented.
‘We have alternatives’: Trump sought to spin the court ruling as expanding and clarifying his power rather than limiting it. “Other alternatives will now be used to replace the ones that the court incorrectly rejected,” Trump said. “We have alternatives, great alternatives. Could be more money — we’ll take in more money, and we’ll be a lot stronger for it.”
Trump he is imposing new 10% global tariffs under a different law, Section 122 of the Trade Act of 1974, and would start the process to impose other tariffs. “It is my Great Honor to have just signed, from the Oval Office, a Global 10% Tariff on all Countries, which will be effective almost immediately,” Trump said in an evening post on Truth Social.
The 1974 law allows him to levy tariffs of up to 15% — but those tariffs will expire in 150 days unless Congress extends them. Trump acknowledged that the other pathways that may be available for him to impose tariffs are more complicated than the sweeping approach he tried to use.
Trump also complained that the Supreme Court decision did not resolve uncertainty surrounding the tariff revenue that has already been collected under his emergency declaration.
“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,” Kavanaugh noted in his dissent. “As was acknowledged at oral argument, the refund process is likely to be a ‘mess.’”
The process is likely to play out in other courts over many months. “Wouldn’t you think they would put one sentence in there saying that? ‘Keep the money or don’t keep the money,’” he said. “I guess it has to get litigated for the next two years.”
What the court said: The case, brought by 12 states and five small businesses, centered on whether Trump had the authority under the International Emergency Economic Powers Act (IEEPA) to impose tariffs. Shortly after he started his second term, Trump had declared that persistent U.S. trade deficits and the flow of illegal drugs from Canada, Mexico and China represented a national emergency. He asserted the authority under IEEPA to respond to the emergency by imposing tariffs on goods from dozens of U.S. trading partners.
“The President asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope,” Roberts wrote in his majority decision. “In light of the breadth, history, and constitutional context of that asserted authority, he must identify clear congressional authorization to exercise it.”
Roberts and other justices ruled that Trump could not point to such congressional authorization, with some arguing that IEEPA did not give a president the power to impose tariffs.
Roberts also noted that in the half century that IEEPA has been law, no president before Trump had used it to impose any tariffs, let alone the types of sweeping tariffs Trump put in place. The lack of such precedent combined with the extraordinary breadth of Trump’s claim of executive authority “suggests that the tariffs extend beyond the President’s ‘legitimate reach’,” Roberts wrote.
In a concurring opinion, Gorsuch argued that the power to impose tariffs was given to Congress for good reason.
“For those who think it 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 major decisions affecting the rights and responsibilities of the American people (including the duty to pay taxes and tariffs) are funneled through the legislative process for a reason. Yes, legislating can be hard and take time. And, yes, it can be tempting to bypass Congress when some pressing problem arises. But the deliberative nature of the legislative process was the whole point of its design. Through that process, the Nation can tap the combined wisdom of the people’s elected representatives, not just that of one faction or man.”
Where tariffs and the economy go from here: The court’s decision comes at a time when polls find large majorities of Americans are unhappy with the state of the economy and Trump’s stewardship of it. The ruling was handed down shortly after the Commerce Department said this morning that the economy grew at a tepid 1.4% annual rate in the fourth quarter of 2025, down sharply from a 4.4% pace the previous quarter, though the estimate for the final months of last year was depressed by last fall’s government shutdown.
Economists at J.P. Morgan estimate that the average effective tariff rate as of December was 9.4%, up from 2.3% in 2024. Without the IEEPA tariffs, that rate would fall to just over 4%. It may not get that low. The J.P. Morgan economists expect the administration to use new approaches to keep the effective tariff rate roughly where it has been. “That said, even this outcome would entail a significant realignment of tariffs placed on different products from different countries, thereby creating winners and losers,” J.P. Morgan’s Michael Feroli wrote in a note to clients.
In other words, uncertainty will likely continue for businesses.
Feroli added, though, that there may be some economic upside to the court’s decision: “The administration has gotten the message that affordability will matter in the upcoming midterm elections. Today’s ruling could give the administration a face-saving way to climb down on the average effective tariff rate in a way that could lower prices.”
Trump hasn’t backed off his love for tariffs, though. And American consumers are not expected to get any refunds or see major savings. “Companies are highly unlikely to start trimming their prices as a result,” Stephanie Roth, chief economist at Wolfe Research, told CNN. “Walmart is not going to give you a check for the 15% tariff on sneakers you bought from them four months ago.”
Dinging the deficit: One potential loser from today’s ruling is the federal budget. If the U.S. ends up refunding IEEPA tariff revenues, the cost could range from $120 billion to $200 billion, according to various estimates. Feroli said the rebates could widen this year’s deficit by half a percentage point, to around 6.6% of gross domestic product. And the Congressional Budget Office projected earlier this month that the Trump tariffs in place as of November 20, 2025, would reduce deficits by $3 trillion over 10 years. That projection now becomes moot, with one estimate putting the fiscal impact of the lost tariffs at about $1.5 trillion. The deficit outlook going forward will depend in part on the degree to which the Trump administration can recreate its tariff regime.
The outlook there is uncertain. Trump’s insistence that he can and will use other authorities to unilaterally rebuild his tariff regime may come with limitations — and may well invite new legal challenges. But it’s probably his only option. With elections looming, lawmakers may not be eager to take up legislation dealing with the issue. The GOP’s narrow majorities in the House and Senate, and opposition to tariffs from many lawmakers, including a broad swath of Republicans, mean it would be very difficult for Trump to rely on Congress to restore his sweeping tariffs.
“Congress and the Administration will determine the best path forward in the coming weeks,” Speaker Mike Johnson said Friday in a post on X.
The bottom line: Trump’s economic agenda suffered a huge blow today, but that doesn’t mean the economy suffered a huge blow. The president will try to rebuild his tariff structure, but — despite his claims — the options before him now are more limited.