Tariffs have been a linchpin of the Trump administration’s economic policy since President Donald Trump returned to the White House. To impose sweeping tariffs on countries worldwide, President Trump relied on the International Emergency Economic Powers Act (IEEPA).
IEEPA is a 1977 federal law that lets the president regulate certain international economic transactions after formally declaring an “unusual and extraordinary threat” (i.e., a national emergency) arising from a foreign country. President Trump has argued that the IEEPA authorizes the President to impose tariffs since the first Trump administration.
What was the national emergency? President Trump determined that the influx of controlled substances, particularly opioids such as fentanyl, had “created a public health crisis.” He subsequently issued 25% tariffs on Canada, with a baseline tariff rate of 10% for all U.S. trading partners. He has since increased, lowered, imposed, and revoked numerous tariffs on multiple countries, including Mexico and China.
In one of the most anticipated and impactful decisions of this term, the U.S. Supreme Court held that the imposition of sweeping and open-ended tariffs under the IEEPA was unconstitutional.
The Supreme Court Decision on Trump’s Tariffs, Explained
Chief Justice John Roberts, who authored the 6-3 principal decision, began his analysis by citing Article I, Section 8, of the U.S. Constitution, which states that:
“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises.”
This clearly establishes that the Constitution explicitly gives Congress the power to impose tariffs, a fact undisputed in the case. However, Congress can delegate authority to the Executive Branch through federal legislation.
Did Congress do so in this case? President Trump cited 50 U.S.C. §1702(a)(1)(B) to argue it did. That statute, enacted to give the president peacetime emergency authorities to impose economic sanctions on foreign actors, holds that “the President may … regulate … importation or exportation” when it is a matter of national security.
(Note that the ellipses are doing a lot of work there, so interested readers may benefit from a thorough reading of the statute, which is linked in full above.)
The principal opinion invokes the “major questions doctrine” to conclude that the IEEPA does not give the president sweeping tariff powers, though not all of that analysis commands a majority of the Court.
Under the major questions doctrine, the U.S. Supreme Court has held that when a federal agency asserts sweeping power, it is presumed that Congress did not delegate that power through ambiguous language.
Put more simply, if Congress is giving away a core power to the executive, it must do so clearly and unambiguously.
The major questions doctrine has been controversial, and the justices' opinions largely revolve around it. Ultimately, the judgment was 6-3, with Kavanaugh, Alito, and Thomas dissenting.
Where Each Justice Stood
It is notable how each justice approached the issue. A solid majority held that the IEEPA did not authorize the U.S. president to impose any tariff for any period, but the disagreement centered on the major questions doctrine. Here’s the breakdown:
- Justice Roberts authored the principal opinion, portions of which were joined by Gorsuch, Barrett, Kagan, Sotomayor, and Jackson. He relies on the major questions doctrine to conclude that Congress would have had to clearly authorize tariff powers under IEEPA, which it did not do. As Justice Roberts notes, after highlighting the Supreme Court’s increasing reliance on the major questions doctrine, “[w]hat common sense suggests, congressional practice confirms. When Congress has delegated its tariff powers, it has done so in explicit terms, and subject to strict limits.”
- Justice Gorsuch concurred in full. Justice Gorsuch wrote to defend the major questions doctrine and to respond to his colleagues' arguments against it.
- Justice Barrett wrote a concurring opinion arguing that the major questions doctrine is merely a method of statutory interpretation, downplaying its importance as a stand-alone doctrine in this and perhaps future decisions.
- Justice Kagan, joined by Justices Sotomayor and Jackson, concurred with the principal opinion and its reasoning in large part, and the holding that the IEEPA did not provide authorization for tariffs. They wrote separately to note that “ordinary tools of statutory interpretation” were sufficient to resolve the case similarly.
- Justice Jackson wrote separately to note that it was enough, in this case, merely to look at legislative history in order to reach the same conclusion. She noted that “[t]he legislative history here plainly establishes that Congress understood and intended IEEPA and TWEA to authorize a wholly different type of power: the power to freeze foreign-owned property.”
- Justice Kavanaugh, joined by Justices Alito and Thomas, dissented. They would have held that the IEEPA’s statutory text clearly authorized the president to unilaterally impose tariffs against any country for any length of time if the president judges there to be a national emergency. They reached this conclusion by arguing that “regulate” in the context of the IEEPA also includes the power to issue tariffs. They also argued that the major questions doctrine does not apply to foreign policy.
- Justice Thomas wrote separately to argue that the nondelegation doctrine, which was not a factor in the opinions of any of the other justices, is limited to “core legislative power” and does not bar Congress from delegating authority to impose tariffs, which he does not view as within that core.
In the lower courts, several challengers argued that Trump’s emergency declarations and the resulting tariffs did not properly fit IEEPA’s “unusual and extraordinary threat” framework. However, by the time the case reached SCOTUS, the question presented to the court was narrowed to whether IEEPA authorizes tariffs at all, not whether Trump had properly declared a national emergency.
Practical Impacts
The decision primarily invalidates Trump’s broad IEEPA‑based tariff program while leaving many existing tariffs in place (including Section 232 and Section 301 tariffs). It does not prohibit the U.S. president from ever taxing the importation of goods from foreign countries.
Instead, the Supreme Court held that when Congress delegates tariff authority, it must do so explicitly. It has delegated such power to the president in other laws, although the President’s authority is more limited in those circumstances.
For example, the Trade Act of 1974 authorizes tariffs and other trade measures to counter unfair trade practices or violations of trade agreements, after investigation by the U.S. Trade Representative. In addition, Congress could pass a law tomorrow fully authorizing President Trump’s tariffs.
That is not to say the decision isn’t impactful or won’t have ramifications for the U.S. economy. For example, what will happen to the numerous companies that have been paying tariffs established under the IEEPA? It’s not clear. Costco previously sued the Trump administration to preserve its right to refunds on tariffs.
SCOTUS left the question of refunds open, meaning the Court of International Trade (CIT) and CBP will have to sort out how refunds are administered, if at all. For small businesses impacted by tariffs, this is perhaps the most pressing open question.
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