The New York Times
Live Updates: Supreme Court Strikes Down Trump’s Sweeping Tariffs
The ruling is a major setback for President Trump’s economic agenda, and he called it a “disgrace.” The White House has said it will use different authorities to reimpose many fees on imports quickly.
The Supreme Court dealt a major blow to President Trump’s economic policy on Friday, ruling that he had exceeded his authority when he imposed tariffs on nearly every U.S. trading partner.
The 6-3 decision has significant implications for the economy and consumers. The federal government has collected more than $200 billion in tariffs since the start of last year. Before the decision, the administration had said that a loss in the case could force the government to unwind trade deals with other countries and potentially pay hefty refunds.
Gov. Gavin Newsom of California, a Democrat whose state had sued the federal government over the tariffs, called on President Trump to issue tariff refund checks to Americans.
“These tariffs were nothing more than an illegal cash grab that drove up prices and hurt working families, so you could wreck longstanding alliances and extort them,” Newsom said, addressing Trump in a statement.
“Every dollar unlawfully taken must be refunded immediately — with interest. Cough up!”
Senator John Curtis, Republican of Utah, said in a statement that the ruling affirms “despite all the noise of the moment, that the founders’ system of checks and balances remains strong nearly 250 years later.”
“Several questions remain unanswered, including what happens to the revenue already collected and how the administration may use alternative authorities to impose tariffs,” Curtis said. “Looking ahead, it is critical that we provide the clarity and predictability businesses need.”
How the share of U.S. imports under different trade rules evolved
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Senator Chuck Grassley, Republican of Iowa and the chairman of the Judiciary Committee, in a statement noted that he is “one of the only sitting members of Congress” who was in office for IEEPA’s passage.
“Since then, I’ve made clear Congress needs to reassert its constitutional role over commerce, which is why I introduced prospective legislation that would give Congress a say when tariffs are levied in the future,” Grassley said. Grassley added that he supported the work President Trump is doing to negotiate expanding market access for American products around the world, and said the administration should “keep negotiating, while also working with Congress to secure longer-term enforcement measures.”
India was subject to some of the highest tariffs imposed under IEEPA, totaling 50 percent from August until just two weeks ago, when Indian and American officials agreed to a bilateral trade agreement. Now, wrote Ajay Srivastava, an Indian former trade official and head of the Global Trade Research Intiative in New Delhi, with the legal basis for the tariffs thrown out, “the ruling should prompt India to re-examine its trade deal,” which had required it to double its imports of American goods.
While the ruling is a major setback for the Trump administration, it has plenty of other legal authorities they can use to impose new tariffs. U.S. Trade Representative Jamieson Greer told me in an interview last month that if the court ruled against the administration he would start working to replace them “the next day” by invoking other aspects of U.S. trade law.
Among the options are Section 232, which allows the government to impose tariffs on certain sectors in the interest of national security, and Section 301, which allows tariffs to be imposed for unfair trade practices. Trump used the Section 301 provision against China in his first term. The administration could also use Section 122, a legal authority that relates to balance of payments issues, to put in place a 15 percent tariff for 150 days.
Another provision, Section 338, allows the government to impose tariffs if other countries “uniquely discriminate” against the United States. Trade experts tell me that means it might be used against other countries if they end up retaliating against U.S. tariffs.
Reporting from Washington
A trio of conservative justices on Friday warned that the court had overstepped its bounds in its decision to block President Trump’s emergency tariffs, arguing that the president should be able to impose tariffs under his power to conduct foreign affairs.
In a 63-page dissent, written by Justice Brett M. Kavanaugh, who was joined by Justices Clarence Thomas and Samuel A. Alito Jr., the dissenters also raised concerns that the decision would lead to chaos, at least in the short term as importers who have already paid the tariffs seek refunds.
In one straightforward respect, Friday’s Supreme Court decision on tariffs is a setback for the nation’s fiscal situation. For all of the downsides of tariffs noted by various business leaders and economists, it is also true that the revenue from them had buttressed the federal budget. And yet, despite the potential hit of $120 billion or more to tax revenues set in motion by the court decision, the Treasury bond market, where the U.S. federal government’s debt is rated and sold by investors, has reacted to the news with relative calm. Yields, or interest rates, on government debt have barely budged.
President Trump learned of the Supreme Court’s decision Friday morning while he was meeting with the nation’s governors in the East Room of the White House, according to two people familiar with the timing. During the meeting, Trump was handed a piece a paper, alerting him to the decisions.
He called the decision a “disgrace” and criticized the court. He then took a question from Governor Josh Stein of North Carolina about hurricane assistance. He gave a brief answer and said he needed to leave to address the Supreme Court’s decision, abruptly ending the meeting.
Former Vice President Mike Pence praised the decision by the Supreme Court on social media, calling it “a Win for the Separation of Powers enshrined in the Constitution of the United States” and stating that the ruling “reaffirmed that the Constitution grants Congress - not the President - the power to tax.” Pence had previously criticized the use of tarrifs in Trump’s effort to take over Greenland, and the former vice president has grown slightly more comfortable criticizing his former boss. Last year, Pence offered a not-so-subtle rebuke of Trump’s claims about American foreign policy, telling NBC, “I’ve never been a fan of American presidents criticizing America on foreign soil.”
Brazil was hit by some of the most punishing U.S. tariffs last year, as President Trump tried to pressure Latin America’s largest economy to drop criminal charges against his ally, former president Jair Bolsonaro. But many of the levies on Brazil’s most important exports to the United States, like coffee and orange juice, were eventually scrapped. This means that today’s Supreme Court ruling will have little impact on most Brazilian goods entering the American market.
Raphael Bostic, president of the Federal Reserve bank of Atlanta, said on Friday that the economic impact of the Supreme Court’s decision would depend on whether companies that paid tariffs will receive any refunds. He also said it would depend on how companies change their daily operations in light of this decision.
“Is there a requirement to pay back the firms that have paid in the tariffs? If so, that’s a lot of disruption,” Bostic said.
Senator Bernie Moreno, Republican of Ohio, castigated the Supreme Court for their ruling, describing it as “outrageous” and calling for allies of the president on Capitol Hill to seek to pass laws in support of the president’s trade policy. “This betrayal must be reversed and Republicans must get to work immediately on a reconciliation bill to codify the tariffs that had made our country the hottest country on earth!”
President Trump’s wide-ranging tariffs have helped to reconfigure trade. Agathe Demarais, a senior policy fellow at the European Council on Foreign Relations, noted that American allies and adversaries have been reshuffling trade ties away from the United States. “China recorded a $1.2 trillion global trade surplus in 2025, the highest-ever on record by any country — highlighting how Chinese firms successfully re-routed exports to other markets.” Over the past year, countries across the world have stepped up efforts to sign trade partnerships that do not include the United States, like the European Union’s recent deals with with the four South American nations that make up Mercosur and with India.
Some business groups are hoping the ruling will open the window for the Trump administration to eliminate tariffs on certain goods. The Distilled Spirits Council has been pressing for the elimination of tariffs on the import of spirits from the U.K. and Europe, such as Scotch and Irish whisky, for most of the past year. Today, its chief executive, Chris Swonger, said that slashing those tariffs would “ease financial pressures on bars, restaurants and retailers at a time when affordability remains a major concern for consumers.”
Senator Tim Kaine, Democrat of Virginia, who joined an amicus brief for the case and has led the Senate in four votes seeking to repeal Trumps tariffs, celebrated Friday’s ruling. “The Supreme Court did its job here in upholding the bedrock principle of separation of powers,” he said in a statement. “Congress must step up and do the same on tariffs, war powers, and many other issues.”
The European Union is still working to implement the E.U.-U.S. trade deal it struck last year. Bernd Lange, the head of the committee in European Parliament that is currently working on the finalization, just posted on X that he has “convened an extraordinary meeting” of the negotiating team on Monday to discuss what this Supreme Court decision means for the accord.
President Trump called the Supreme Court decision on tariffs “a disgrace” while speaking to the nation’s governors, according to two people familiar with his comments.
The Budget Lab at Yale University, a nonpartisan research center, calculated the impact of tariffs on consumers if those authorized under emergency powers were included and if they weren’t. It concluded: “Without IEEPA tariffs, consumers will face an overall average effective tariff rate of 9.1 percent, which remains the highest since 1946 excluding 2025. (If IEEPA tariffs had been allowed to stay in effect, this figure would have been 16.9 percent.)”
Brando Benifei, president of the European Parliament’s delegation for relations with the United States, just told me in a note that the rule is a “signal of hope and vitality in the system of checks and balances that characterizes American democracy.”
Matthew Ryan, the head of market strategy at the global financial services firm Ebury, noted that there was a sell-off of dollars immediately after the ruling. He said “the move probably reflects heightened fiscal concerns, as markets fret that the massive tariff refunds could create a significant U.S. budget shortfall, a higher deficit and an increase in debt issuance.”
So far, the U.S. Treasury has collected more than $200 billion in tariff revenue since April 2, 2025, a date President Trump labeled “Liberation Day” as he imposed his sweeping tariffs. The research firm Capital Economics estimated that if the Treasury is forced to issue refunds, the cost would run to about $120 billion, or 0.5 percent of gross domestic product. Justice Brett M. Kavanaugh in his dissent was the only judge to mention the refund process, warning it would be a “mess.”
Many U.S. importers have kept meticulous records in anticipation of submitting those requests if a court ruling allowed them to pursue tariff refunds. The consulting firm Capital Economics estimates that those refund requests could total as much as $120 billion. So, will consumers see any of that money, given that they ultimately paid a significant portion of it? Probably not. Companies are not likely to issue refunds, or lower prices. But they may hold off on prices increases that they had planned for this year, especially if they are not in a sector that is likely to fall under any new tariffs the White House might impose.
While President Claudia Sheinbaum of Mexico said her administration would fully review the court’s decision before commenting, the ruling mirrors a long-standing argument of hers: that the physical reality of North American integration is more powerful than temporary protectionist policies.
Even as she acknowledged that some barriers remain — citing tariffs on steel and aluminum that were not part of the court’s reach — she framed the broader relationship as one that has outgrown unilateral levies. That makes the survival of the free-trade deal that Mexico has with the United States and Canada a priority, she said.
“Not only are we the largest exporter to the United States, but we are also the largest buyer of U.S. products,” Sheinbaum said at her daily morning conference. “What that shows is that beyond a particular policy of greater protectionism, it is very important for both countries to maintain the trade agreement.”
The National Retail Federation, a trade group, expressed relief about the Supreme Court’s ruling, The ruling “provides much-needed certainty for U.S. businesses and manufacturers,” said David French, the group’s executive vice president of government relations. Refunds, he added, “will serve as an economic boost and allow companies to reinvest in their operations, their employees and their customers.”
In a statement, Scott Lincicome, a vice president at the Cato Institute’s Center for Trade Policy Studies, who has been a leading voice among the U.S. conservative opposition to tariffs said, “The court’s decision is welcome news for American importers, the United States economy, and the rule of law, but there’s much more work to be done.” He added that “most immediately, the federal government must refund the tens of billions of dollars in customs duties that it illegally collected from American companies pursuant to an ‘IEEPA tariff authority’ it never actually had.”
The ruling puts Republicans who never really liked Trump’s aggressive use of tariffs in something of an awkward spot because many will privately be celebrating the decision but not want to break publicly with the president. Representative French Hill, an Arkansas Republican, walked that line carefully on Friday as he noted that he supports Trump’s efforts to secure fair trade deals but that Congress should have more input on tariffs. “While tariffs can be a useful tool when applied in a targeted way, today’s Supreme Court decision underscores the need for Congress to play a role in trade policy,” Hill said.
The White House has said that it plans to replace the IEEPA tariffs with other duties using more clear-cut authorities. However, those legal provisions usually require the U.S. Trade Representative to undertake an investigation, and only apply to certain sectors. President Trump had been using the “emergency” tariffs as a cudgel against any country that displeased him for any reason — including nations like Brazil, on the justification that the government was persecuting a political ally, former president Jair Bolsonaro. Losing that authority deprives Trump of a powerful point of leverage and tool of retaliation.
Senator Chuck Schumer of New York, the Democratic leader, in a statement called the ruling “a win for the wallets of every American consumer” and added that “a president cannot ignore Congress and unilaterally slap tariffs on Americans.”
“Now Trump should end this reckless trade war for good and finally give families and small businesses the relief they deserve,” Schumer said.
Stocks rose after the Supreme Court’s decision, with the S&P 500 up 0.4 percent for the day. Investors have tended to react positively to restrictions on tariffs over the past year but few expect this ruling to mark the end of the president’s tariff talk, which may be why the market reaction remains fairly muted.
Kimberly Clausing, a professor of tax law and policy at the U.C.L.A. School of Law, said, “The strength of the President’s tariff cudgel is diminished. Governments abroad and businesses at home can both expect (somewhat) less mercurial U.S. tariff processes.” U.S. consumers and businesses are likely to face more uncertainty, though, since the administration has already indicated that it plans to use other authorities to levy similar tariffs. “This means that Trump’s tariffs will continue to burden the U.S. economy, even if alternative instruments are not as agile or broad as the IEEPA tariffs.”
The European Union’s official reaction is a muted one. “We take note of the ruling by the U.S. Supreme Court and are analyzing it carefully,” Olof Gill, a spokesman for the European Union’s executive arm, said in a statement. “We remain in close contact with the U.S. Administration as we seek clarity on the steps they intend to take in response to this ruling.”
The British government described the Supreme Court ruling as “a matter for the U.S. to determine” but added that it would “continue to support U.K. businesses as further details are announced,” a spokesperson said.
The British Chambers of Commerce said the decision “does little to clear the murky waters for business.” It also raises the question of whether British exporters can also receive a share of any rebate depending on commercial trading terms, said William Bain, the group’s head of trade policy. But for Britain there are outstanding trade issues not covered by the IEEPA tariffs, particularly on steel and aluminium. “For the UK, the priority remains bringing tariffs down wherever possible,” Bain said.
Senator Elizabeth Warren, Democrat of Massachusetts, hailed the Supreme Court ruling and said that consumers — not just companies — should be repaid for the costs that they have incurred related to the tariffs. “No Supreme Court decision can undo the massive damage that the Trump tariffs have done to small businesses, to American supply chains, and especially to American families forced to pay higher prices on everything from groceries to housing,” Warren said. “The Court has struck down these destructive tariffs, but there is no legal mechanism for consumers and many small businesses to recoup the money they have already paid.”
President Trump’s tariffs have hit small businesses particularly hard, and many were forced to make hard decisions — including laying off employees and raising prices — to account for the higher import duties. It will be hard for them to reverse those kinds of changes quickly, if at all.
The economic impact of tariffs has been a major point of tension between the White House and economists both inside and outside the Federal Reserve. In a recent study published by the New York Fed, researchers concluded that American companies and consumers have borne the brunt of the broad-based levies that Trump imposed last year. Using import data through November, they found that nearly 90 percent of the economic costs associated with tariffs have fallen on U.S. businesses and their customers.
The study prompted yet another attack on the Fed from the administration, with Kevin Hassett, the president’s top economic advisor, calling for the authors to be “disciplined” as he described it as the “worst paper I’ve ever seen in the history of the Federal Reserve system.”
The Supreme Court tackled the question of President Trump’s ability to use emergency powers to impose sweeping tariffs on nearly every U.S. trading partner.
But the case highlights a simpler but critical question: What is a tariff?
President Trump has not yet commented on the ruling, but he was particularly animated about the case on Thursday while delivering remarks in Rome, Ga.
“I have to wait for this decision,” he said, raising his voice. “I’ve been waiting forever. Forever. And the language is clear that I have the right to do it as president. I have the right to put tariffs on for national security purposes.”
Trump also repeatedly said the word tariff was his favorite word in the dictionary.
Democrats on Capitol Hill are starting to sound out in praise of the Supreme Court decision. “Trump’s tariffs weakened our economy, hurt American workers, and made it harder for families to make ends meet,” said Representative Brendan Boyle, Democrat of Pennsylvania, who leads his party on the House’s top budget panel. But, he added: “Trump will try to do this again another way because he is intent on continuing his unhinged economic sabotage.”
First reactions from Canada’s business leaders are cautious. Few countries have been more deeply affected by President Trump’s tariff policy, well beyond the strictly economic realm.
“The Supreme Court’s decision to strike down the use of IEEPA tariff powers is a legal ruling, not a reset of U.S. trade policy. This is certainly not the last chapter of this never-ending story,” said Candace Laing, the president and chief executive of the Canadian Chamber of Commerce. “Canada should prepare for new, blunter mechanisms to be used to reassert trade pressure, potentially with broader and more disruptive effects.”
The Supreme Court decision, though, affects very few of the actual tariffs the Trump administration has imposed on Canada. Most of the tariffs on Canadian exports to the United States are the sectoral tariffs on goods such as steel and aluminum, which are not affected by the decision. Some 90 percent of Canadian exports are tariff-free right now. Still, Canadian leaders are anxious that the decision will make President Trump apply different types of tariffs that could impact Canada more, just months before a fraught review of the free-trade agreement between the United States, Canada and Mexico is due.
It’s going to be an awkward night on Tuesday, when at least some of the justices are expected to attend President Trump’s State of the Union address. Chief Justice Roberts has not missed one in his two decades on the court and did not enjoy being rebuked by President Obama just days after the Citizens United campaign finance decision in 2010.
Treasury Secretary Scott Bessent previewed what the Trump administration might do if the court struck down the tariffs during a discussion The New York Times DealBook conference in December.
He suggested that they could be replicated with tariff measures included in the 1962 Trade Act, sections 301, 122 and 232. However, he acknowledged that tariff authorities the administration had tried to use gave Trump more negotiating leverage and suggested that he did not believe that the Supreme Court would interfere with such a central part of the president’s economic agenda.
Starting in December, a growing roster of companies hired lawyers, filed lawsuits or submitted official claims to the U.S. government, all in an early bid to secure a quick payout in the event that the centerpiece of Mr. Trump’s global trade war is struck down.
The companies, including the buy-in-bulk retailer Costco and the canned-tuna company Bumble Bee Foods, were racing to get in line for tariff refunds, anticipating that the Supreme Court would rule against President Trump and force him to return billions of dollars collected on imports. Now that they have done so, it is unclear whether the government will have to pay those refunds.
The Supreme Court on Friday struck down President Trump’s sweeping use of emergency powers to impose many of his tariffs, saying he could not use a decades-old law to tax imports.
At issue is a 1977 law that gives the president broad economic powers during a national emergency, known as the International Emergency Economic Powers Act. Mr. Trump has invoked the law to justify import taxes on dozens of trading partners.
Even before the Supreme Court issued its ruling, hundreds of American businesses had prepared to pursue tariff refunds by hiring lawyers, filing lawsuits or submitting official claims to get tariff refunds. We Pay the Tariffs, a coalition of over 800 small businesses, called for fast refunds.
“A legal victory is meaningless without actual relief for the businesses that paid these tariffs,” the group said in a statement. “The administration’s only responsible course of action now is to establish a fast, efficient, and automatic refund process that returns tariff money to the businesses that paid it.”
The U.S. Court of International Trade will ultimately manage that process. But refunds are not automatic. Any importer that wants its money back must sue individually.
Matthew Ryan, Head of Market Strategy at the global financial services firm Ebury, noted that there was a sell-off of dollars immediately after the ruling. He said that “probably reflects heightened fiscal concerns, as markets fret that the massive tariff refunds could create a significant U.S. budget shortfall, a higher deficit and an increase in debt issuance.”
As European businesses have waited for this decision, the overriding message from them and their lobby groups has been that they expect the Trump administration to implement some alternative measures to keep tariff levels high. And so, the Supreme Court decision will most likely renew the uncertainty for international businesses and further complicate any investment and supply chain decisions as the legal process plays out.
For many businesses in the United States, the ruling heightens uncertainty even as it provides momentary relief. Many had adjusted to Trump’s tariffs and now have little clarity on what rates could look like should the Trump administration impose tariffs another way, as many companies expect it will do.
It’s important to remember that this case wasn’t just about trade. For President Trump, the tariffs — specifically, the ability to institute them on an immediate, boundless and emergency basis — were central to the entirety of his second term. They were the tool he used to force companies to manufacture goods domestically, open access to foreign markets, force an end to foreign conflicts and project political power globally. So too were the emergency tariffs central to his fiscal agenda, offering a lucrative offset to the expensive, debt-heavy tax cuts that Republicans adopted last year.
Only hours ago, the White House had expressed confidence it would prevail on the tariffs case. Kevin Hassett, the director of the White House National Economic Council, told Fox Business that the administration believed it was on “very strong legal footing,” but added that the administration had a “backup plan that’s just as good.”
Experts have said for weeks that a Supreme Court decision that pushes back on the Trump administration’s tariffs was unlikely to kill the European Union-United States trade deal. Europe will want to “wait and see” what happens after the Supreme Court decision, said Jacob Funk Kirkegaard, a senior fellow at the think tank Bruegel in Brussels.
Even if Europe stands by its trade deal with the United States, the Supreme Court decision curbing the Trump administration’s use of this trade tool is likely to be welcome in Brussels, Kirkegaard said. It “re-institutes a degree of rule-boundedness around transAtlantic trade,” he said. Other trade tools cannot be used overnight in the same way.
Reporting from Washington
The Supreme Court ruled on Friday that President Trump exceeded his authority when he imposed sweeping tariffs on imports from nearly every U.S. trading partner, a major setback for his administration’s second-term agenda.
The court’s 6-3 decision has significant implications for the U.S. economy, consumers and the president’s trade policy. The Trump administration had said that a loss at the Supreme Court could force the government to unwind trade deals with other countries and potentially pay hefty refunds to importers.
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