The Supreme Court found that Trump overstepped his authority under the International Emergency Economic Powers Act|Kjetil Ree|CC BY-SA 2.0

In a 6–3 decision, the Supreme Court ruled yesterday that President Donald Trump overstepped in involving the International Emergency Economic Powers Act (IEEPA) to impose tariffs without Congress.

The move opens the door for businesses to seek billions of dollars in refunds.

Chief Justice John Roberts said Trump exceeded his authority under the IEEPA law of 1977, calling his claim of power “extravagant by any measure.”

The decision dealt a blow to the administration, which had relied on the revenue to fund federal programs, rebate checks, and provide aid to farmers.

The ruling applies to broad “reciprocal” tariffs and to separate drug-related levies targeting China, Mexico, and Canada.

Trump pushes back
Undeterred, Trump signed a new order imposing a new 10% global tariff, exempting goods from Canada and Mexico under the US-Mexico-Canada trade pact, using Section 122 of the Trade Act of 1974 (which covers international payment problems). The authority caps tariffs at 15% for 150 days before Congress must approve.

Small businesses and states had challenged the tariffs as an unauthorized tax on Americans.

The decision affects most of the White House’s prior duties, potentially disrupting global trade.

Trump is also looking at Section 232 of the Trade Expansion Act. It permits tariffs for national security threats after a Commerce Department probe, with no rate or time limits.

Tariff revenue figures
Through mid-December, US Customs collected about $133.5 billion, making up 67% of tariffs for the fiscal year. Including other duties, total collections reached $202 billion, 2.4 times the previous year’s level.

Market and legal impact
The Court didn’t clarify how refunds will work, leaving lower courts to decide. Hundreds of companies have already filed lawsuits.

Stocks rose modestly, the dollar slipped, and Treasury yields edged higher.

The decision affects most of the White House’s prior duties, potentially disrupting global trade. US stocks reacted calmly: the S&P 500 rose 0.7%, and the Nasdaq gained 0.9%, reflecting investor expectations that the administration had time to plan its next steps.