- Supreme Court limits Trump's tariff powers under IEEPA emergency law.
- Court ruling coincides with a decline in US trade deficit due to tariffs.
- IEEPA tariffs were crucial in Trump's global trade renegotiation strategy.
The Supreme Court struck down a chunk of President Donald Trump's sweeping tariff policy on Friday, finding a new limit to the expansive presidential powers he has sought.
The 6-3 decision centered on the tariffs Trump justified under the International Emergency Economic Powers Act, a national security law that allows the president to regulate economic activity during emergencies.
Those IEEPA-justified tariffs have been one of Trump's most powerful weapons in his efforts to renegotiate trade agreements around the globe. They include Trump's so-called "Liberation Day" tariffs, announced in April, which are at least 10% on nearly every country in the world.
The Trump administration's use of the law went too far, wrote Chief Justice John Roberts in the majority opinion. Trump would need a distinct law from Congress "to justify his extraordinary assertion of the power to impose tariffs," he wrote.
"What common sense suggests, congressional practice confirms," he wrote. "When Congress has delegated its tariff powers, it has done so in explicit terms, and subject to strict limits."
The Supreme Court's decision comes as the United States trade deficit is shrinking, largely due to the Trump administration's tariffs, which are taxes on imported goods. It shrank to $29.4 billion in October, the lowest figure since 2009, according to recently published Commerce Department data.
Two groups of businesses filed lawsuits challenging Trump's authority to impose tariffs through IEEPA. The Supreme Court combined the cases and put them on the fast track, holding oral arguments at the beginning of its November term.
IEEPA, a Carter-era law, gives presidents the power to "regulate" importation in times of emergency. The Trump administration claimed that it included the ability to impose tariffs — a position no other president has taken.
Lawyers representing the businesses argued that Congress has been clear about taxation and tariff powers in other laws, and would have been clear if IEEPA were meant to confer those powers to the president.
During oral arguments, most judges expressed skepticism about the Trump administration's arguments. Justice Neil Gorsuch, whom Trump appointed to the bench in his first term, said taxes were "part of the spark of the American Revolution" and should get careful treatment.
"The power to reach into the pockets of the American people is just different," Gorsuch said. "And it's been different since the founding."
The Supreme Court's ruling does not affect the tariffs that Trump has imposed using other laws, and Trump still has the power to issue additional tariffs using those laws.
But his administration has favored IEEPA because of its perceived flexibility. The other laws that allow presidents to impose tariffs without explicit Congressional approval have limits — including built-in expiration dates and caps on the amount taxed. They also make it more difficult to target particular countries, rather than certain industries.
This is a breaking story. Please check back for updates.
