The , with a conservative majority, has decided to knock down the so-called “reciprocal” tariffs that President Donald Trump imposed indiscriminately on more than a hundred countries. The decision will force the US Government to pay dozens of taxes for irregularly collected taxes.
The Supreme Court’s decision does not affect all commercial taxes imposed by the Trump Administration. It speaks only about the so-called reciprocal tariffs, most of them directed at trading partners, and others destined for China, Canada and Mexico. They are the ones that Trump approved invoking the Emergency Powers Act of 1977 (IEEPA). There are other specific trade rates on aluminum, cars, for example, that are not affected by this decision. The court considers that Trump makes widespread use of the law’s emergency powers and therefore abuses it.
The ruling, by six votes to three, not unexpected, ceases to be surprising in a court with a conservative majority that has repeatedly issued opinions favorable to Donald Trump.
The United States trade delegate, Jamieson Greer, already assured a few weeks ago that if the Supreme Court rules against the tariffs, the Administration “will begin to reestablish them the next day to respond to the problems that the president has identified.”
The decision, which threatened to disrupt Trump’s economic agenda, comes three months after the oral hearing held in the Supreme Court to study the legality of trade levies. The justices met in a joint hearing to analyze whether the president can use the IEEPA to approve the tariffs. So they already expressed their skepticism about its legality.
The Emergency Powers Act (IEEPA) was passed almost half a century ago by Jimmy Carter to limit presidential power over foreign economic matters after Richard Nixon’s attempts to circumvent the limits of presidential power.
The White House has already announced that it will resort to other legal formulas to maintain the tariffs. The Government had considered at least five alternative ways to maintain or re-approve the tariffs.
The ruling resolves two lawsuits filed by a toy company from Illinois and another family-owned wine and spirits importing company from New York, which represent several hundred small and medium-sized businesses grouped around the platform. We Pay de Tariffs (We pay the fees), which are added to those presented by a handful of Democratic legislators.
The lawsuits reached the Supreme Court after other lower courts ruled that the IEEPA does not grant the president unlimited powers and does not give him the authority to impose tariffs indiscriminately.
The plaintiffs argue that the law passed by President Carter in 1977, which Trump has now relied on to justify his tariffs, does not mention the terms “tariffs,” “customs duties,” “taxes,” or “levies.” That was precisely one of the arguments of lawyer Neal K. Katyal, who represented the companies during his intervention at the Supreme Court hearing. The other is that the IEEPA has been used numerous times over the past 50 years to “decree sanctions, but never,” the lawyer proclaimed, “not once, to dictate tariff policy.” Katyal recalled that the power to impose taxes was granted to Congress by the “founding fathers.”
The oral hearing offered some clues as to where the judges could go. Most of the justices, including conservatives who have coddled Trump with their decisions, expressed doubts about the president’s power to approve tariffs under the emergency law.
Since last April 2, the day proclaimed by Trump as Liberation Day, The United States has imposed indiscriminate tariffs on more than a hundred countries. These are import taxes that range up to 50% for India or Brazil. The Trump Administration has also established special rates for countries, for general sectors, but also for specific products based on their interests, which are not necessarily commercial, such as tariffs on steel and aluminum, the automobile sector, and even bathroom vanities.
“The 2025 tariffs will hit clothing, high-metal products such as electrical equipment and computers, and motor vehicles the hardest. If the IEEPA tariffs are invalidated, the burden on clothing and related products would be greatly eased,” notes the Yale University Budget Lab.
The White House has used the IEEPA to impose five types of tariffs: reciprocal tariffs, those related to fentanyl, those linked to imports of Russian oil, those applied to Indian and Brazilian products, and trade agreements negotiated by other countries under the law.
It is think tankwhich has followed the evolution of Trump’s trade policy over the past year, maintains that the average US tariff rate . It has gone from 2.4% at the beginning of January to a rate close to 28% at the end of April after Trump’s declaration of the trade war. And then they have dropped to 16.8% when it negotiated with the European Union and to 14.4% after the latest modifications that include reductions in tariffs for Switzerland and for red meat or fruits and vegetables common in the shopping basket produced in some Latin American countries. In any case, the current tariff rate is around 15%, the highest since 1935.
