The Supreme Court has ruled that President Trump went beyond his legal authority when he imposed global tariffs under a law meant for national emergencies.
In a 6–3 decision, the court has decided that Trump doesn’t have the right to use the International Emergency Economic Powers Act (IEEPA), a 1977 law, to justify the global tariffs on goods entering the United States.
The decision was written by the Chief Justice, John Roberts, who was joined by three liberal justices and two conservative justices, Neil Gorsuch and Amy Coney Barrett. The majority agreed that the president does not have unlimited power to impose tax unless the Congress grants that authority.
Roberts wrote that the administration failed to show any law where Congress allowed IEEPA to be used for tariffs. The court also made it clear that IEEPA does not give the president the power to impose tariffs of unlimited amount, duration, or scope. According to the ruling, trade taxes of this scale must have clear approval from Congress.
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Three justices, Clarence Thomas, Brett Kavanaugh, and Samuel Alito, didn’t agree to the ruling. According to Kavanaugh, the decision to withdraw the tax could have financial consequences for the U.S. Treasury, especially if businesses demand refunds for tariffs they already paid.
Trump criticized the ruling during remarks at the White House. He described the decision as a disgrace and accused the majority of being disloyal to the Constitution. He also criticized Gorsuch and Barrett, the two justices he nominated, saying their decision was ‘terrible and embarrassing.’
Despite his criticism, the ruling does not remove all of Trump’s tariffs. Tariffs on steel and aluminum, which were imposed under different laws, remain in place. However, the court cancels two major categories of tax: the country-by-country “reciprocal” tariffs and a 25% tax on some goods from Canada, China, and Mexico linked to concerns over fentanyl trafficking.
The Market Reaction to The Tariff Withdrawal
The Financial markets reacted positively to the new ruling. Stocks rose shortly after the decision was announced, signaling investors’ relief over the reduction in trading activities.
Business owners who challenged the tax system also welcomed the outcome. Victor Schwartz, head of VOS Selections, a wine and spirits importer based in New York, said the tariffs were unpredictable and harmful to businesses. He argued that the courts recognized them as unconstitutional government overreach.
So far, the crypto market, most especially Bitcoin has not shown any positive sign of recovery as at the time of writing. The decision marks a major setback for Trump at the Supreme court.
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