Supreme Court strikes down Trump’s global tariffs
The U.S. Supreme Court ruled Friday that President Donald Trump’s sweeping “Liberation Day” tariffs were issued unlawfully, dealing a major blow to his trade agenda and opening the door to legal battles over billions of dollars in duties already paid by U.S. importers.
In a 6–3 decision, the court said the Trump administration exceeded its authority under the International Emergency Economic Powers Act of 1977, a law that grants presidents broad powers during national emergencies but does not explicitly authorize the unilateral imposition of global tariffs.
“The president asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration and scope,” Chief Justice John Roberts wrote. “We hold that IEEPA does not authorize the president to impose tariffs.”
Federal trade courts ruled in 2025 that Trump lacked the legal authority to impose the levies under IEEPA, prompting the administration to take the case to the Supreme Court.
The decision centers on tariffs Trump announced on April 2, imposing levies of anywhere between 10% and 50% on most imports. The package included a minimum 10% tariff on nearly all goods entering the U.S., higher “reciprocal” tariffs on imports from countries that failed to reach trade agreements with the U.S., and additional duties on products from China, Mexico and Canada that the administration said were necessary to combat fentanyl.
During oral arguments in November, justices from both the conservative and liberal wings of the court expressed skepticism that Congress had intended IEEPA to give presidents such sweeping tariff powers.
“The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers,” Justice Brett Kavanaugh wrote in his dissenting opinion. He added that the refund process was “likely to be a ‘mess.'”
Costco, E.l.f. Cosmetics and J.Crew are among a number of firms that have filed lawsuits to receive refunds from tariffs paid to the U.S. government. Data assessed through Dec. 14 indicates that the federal government has collected $133.51 billion from tariffs imposed under the IEEPA, according to the Customs and Border Protection agency.
The tariffs have weighed heavily on businesses, with small companies in particular absorbing higher costs without the cash reserves or negotiating leverage of large retailers. Companies of all sizes have been forced to repeatedly adjust supply chains, production plans, staffing and pricing amid the administration’s rapid tariff rollouts and reversals.
Rick Woldenberg, CEO of educational toymaker Learning Resources, which sued the Trump administration over its tariffs, previously told Modern Retail that his company paid $4.8 million in duties between January and May of last year, nearly double the $2.3 million it paid in all of 2024. He said the company was preparing to implement a midyear price increase of under 10%, a move he described as necessary to offset the rising cost of tariffs.
“The only way that I and everybody else can solve this problem is by passing on higher prices,” Woldenberg said. “This isn’t something we want to do, but we’re essentially being turned into tax collectors.”