Supreme Court Upholds Lower Court Decision on IEEPA

Today the Supreme Court of the United States issued its final decision on the legality of some of the tariffs imposed by President Trump’s citation of the International Emergency Economic Powers Act (IEEPA). The Court ruled 6-3 that the implementation of tariffs by the President was unconstitutional, citing several precedents and the U.S. Constitution determining that the power to impose taxes lies within the U.S. Congress. Despite President Trump declaring a national emergency regarding a trade imbalance and drug trafficking of fentanyl into the U.S. by foreign powers, the Court’s ruling says: “The Government thus concedes, as it must, that the President enjoys no inherent authority to impose tariffs during peacetime.”

The final decision states:

“The President asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope. In light of the breadth, history, and constitutional context of that asserted authority, he must identify clear congressional authorization to exercise it. IEEPA’s grant of authority to “regulate . . . importation” falls short. IEEPA contains no reference to tariffs or duties. The Government points to no statute in which Congress used the word “regulate” to authorize taxation.  And until now no President has read IEEPA to confer such power. We claim no special competence in matters of economics or foreign affairs. We claim only, as we must, the limited role assigned to us by Article III of the Constitution.  Fulfilling that role, we hold that IEEPA does not authorize the President to impose tariffs.”

The ruling was authored by Chief Justice John Roberts, who was joined by Justices Sonia Sotomayor, Elena Kagan, Kentanji Brown Jackson, Neil Gorsuch and Amy Coney Barrett, in the majority. Justices Clarence Thomas, Brett Kavanaugh and Samuel Alito dissented.

This ruling does not apply to all of the President’s tariffs, including those places on steel and aluminum citing different laws, only to the country-by-country or “reciprocal” tariffs, which range from 34% for China to a 10% baseline for the rest of the world, as well as the 25% tariff Trump imposed on some goods from Canada, China and Mexico for what the administration said was their failure to curb the flow of fentanyl. 

Much information is still unknown about all the impacts of this ruling, including how tariffs that were paid will be refunded. More to come as more information becomes available.