Supreme Court Rules Most of Donald Trump’s Tariffs Are Illegal
The American Supreme Court on Friday reversed most of President Donald Trump's tariffsWhich could lead to more than $175 billion in tariff charges for American companies. In a 6-3 decision, the justices ruled that the International Emergency Economic Powers Act (IEEPA) — the law the Trump administration used to justify many of its sweeping global tariffs — does not give the president the power to tax, and tariffs are a form of tax on imports.
Since the beginning of his second term, Trump has imposed a variety of tariffs on almost every country in the world. Most of these rates, inclusive the chaotic so-called “reciprocal rates” last April that sought to tax even islands with only penguin populationswere authorized under IEEPA pursuant to the administration's executive orders.
From the beginning, legal scholars have questioned whether IEEPA was intended to cover tariffs at all. In his opinion to lower the tariffs, Chief Justice John Roberts wrote, “It is also telling that in the half century of IEEPA's existence, no president has invoked the statute to impose tariffs, let alone tariffs of this scope and magnitude.” Instead, the president “must identify clear congressional authority to exercise it,” he wrote.
Friday's decision marks a significant and rare pushback from the Supreme Court against the Trump administration's volatile policies. Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh dissented.
During a White House breakfast with executives Friday morning, Trump called the ruling a “disgrace” and said he had a backup plan, according to CNN's Kaitlan Collins.
The ruling of the Supreme Court does not cover all the tariffs that have been announced in the past two years. For example, the sector-specific on steel, aluminum and copper are not affected, because they were imposed under different presidential authorities.
“Small businesses are rightly worried that the administration will respond to this legal defeat by simply reimposing the same rate policy in other ways,” Dan Anthony, executive director of the small business coalition We Pay the Tariffs, said in a statement. “Tariffs reinstated under different legislative approaches would have the same destructive effect.”
However, it will not be easy for the administration to replace those tariffs immediately, as other relevant policies often come with their own procedures and lengthy trade investigations before the tariffs can be ordered.
The ruling also kickstarts the process to refund a huge amount of fares in the past year. Economists have estimated that more than $175 billion has been collected since February 2025 under the IEEPA tariff policy. In January, anticipating the Supreme Court's decision, Trump posted on Truth Social that the repayment process would be “a complete mess, and almost impossible for our country to pay.”
Many major companies, including Costco, Prada, BYD, and Goodyear, have filed lawsuits against the federal government seeking tariff refunds. Cantor Fitzgerald, a financial services firm run by the sons of US Commerce Secretary Howard Lutnick, has also created ways for its clients to bet that rates will reverse, WIRED first reported in July 2025.
