WASHINGTON — The Supreme Court on Friday ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, effectively invalidating a key component of the second Trump administration’s trade policy. The 6-3 decision in Learning Resources, Inc. V. Trump and the consolidated case Trump v. V.O.S. Selections, Inc., stems from lawsuits brought by businesses challenging the legality of tariffs imposed under the guise of national emergency declarations.
The core of the dispute centered on whether the phrase “regulate… importation” within IEEPA granted the President the power to levy tariffs – a form of taxation traditionally reserved for Congress. Chief Justice John Roberts, writing for the majority, concluded that it did not. “Those words cannot bear such weight,” Roberts wrote, asserting that the tariff scheme asserted by the Trump administration relied on an overly expansive interpretation of the statute.
The ruling vacates many of the tariffs implemented during the latter part of the Trump presidency, opening the door for importers to seek refunds. Hundreds of importers had already filed suits at the Court of International Trade seeking reimbursement, but those cases were stayed pending the Supreme Court’s decision. “Those cases can now proceed,” said Mark Wu, a professor of international trade law at Harvard Law School.
The decision was not without internal division. While six justices agreed on the outcome, the reasoning fractured along ideological lines. Chief Justice Roberts’s opinion garnered full support only for Parts I, II–A–1, and II–B, with Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson joining. Parts II–A–2 and III of Roberts’s opinion, invoking the “major questions doctrine” – the principle that Congress must speak clearly when authorizing an agency to exercise broad regulatory power – were joined only by Justices Gorsuch, and Barrett.
The three liberal justices – Kagan, Sotomayor, and Jackson – concurred in the judgment but declined to endorse the application of the major questions doctrine in this instance. Justice Elena Kagan, in her concurring opinion, highlighted the numerous actions authorized by IEEPA, noting nine verbs and eleven objects related to foreign commerce, and argued that interpreting “regulate… importation” as authorizing tariffs would be an outlier. “Exactly none of the other 98 involves raising revenues,” she wrote.
The dissent, authored by Justice Kavanaugh and joined by Justices Thomas and Alito, argued that IEEPA does authorize tariffs and that the President acted within the scope of his delegated authority. Justice Thomas too filed a separate dissenting opinion supporting broad tariff powers for the President.
The question of whether importers will receive refunds for the nearly $200 billion in tariffs collected during the Trump administration, as estimated by economists at the Penn-Wharton Budget Model, remains unresolved. The Court’s opinion did not address the issue of refunds, prompting former President Trump to question why the Court hadn’t provided guidance. “I guess it has to get litigated for the next two years,” Trump said Friday, later increasing that estimate to five years.
The case’s complexity is reflected in the sheer volume of opinions issued – seven in total, spanning 170 pages. The fractured nature of the majority opinion suggests potential challenges in applying the ruling to future disputes involving presidential authority and economic sanctions. The Court’s decision leaves open questions about the scope of IEEPA and the balance of power between the executive and legislative branches regarding trade policy.