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The United States Supreme Court dealt a serious blow to Donald Trump's economic policy on Friday by declaring the majority of the global tariffs that the president imposed under emergency powers as illegal.
The decision, reached by a vote of six to three, retroactively invalidates the executive orders that established widespread tariffs on dozens of countries and creates a scenario of legal, economic, and budgetary uncertainty, according to news agencies.
The ruling represents a significant defeat for the leader in one of the central pillars of his agenda: the use of tariffs as a tool for trade pressure, tax revenue, and political negotiation.
The core of the ruling: The emergency law does not authorize tariffs
The key to the case lies in the interpretation of the International Emergency Economic Powers Act (IEEPA), a regulation from 1977 that allows the president to "regulate" foreign trade in situations of national emergency.
Trump invoked that law to impose so-called "reciprocal tariffs," which included duties of up to 34% on China and a base rate of 10% for most countries, along with an additional 25% on certain products from Canada, Mexico, and China, citing reasons related to fentanyl and economic security.
However, the majority of the Supreme Court was decisive. In its ruling, it emphasizes:
"The president claims to have the extraordinary authority to unilaterally impose tariffs of unlimited amount, duration, and scope. The grant of authority under the LPEIE to 'regulate... imports' is insufficient. The IEEPA contains no reference to tariffs. The Government does not point to any law where Congress has used the word 'regulate' to authorize the imposition of taxes. And so far, no President has interpreted the LPEIE to confer such authority."
The court insisted that its decision is based not on economic or political criteria, but strictly on constitutional ones
"We do not claim any special competence in economic matters or foreign relations. We solely assert, as is our duty, the limited role assigned to us by Article III of the Constitution. In fulfilling this role, we maintain that the LPEIE does not authorize the president to impose tariffs."
The Court also noted that if Congress had intended to grant the president the "distinct and extraordinary power to impose tariffs" under that law, "it would have done so explicitly, as it has systematically in other tariff statutes."
What tariffs are being eliminated and which ones remain in effect?
The ruling does not affect all the burdens imposed by the Trump administration.
The general tariffs imposed on a country-by-country basis under the IEEPA are hereby annulled, including the broad-reaching "reciprocals."
Instead, the sectoral tariffs imposed under other laws, such as duties on steel, aluminum, or certain automotive products, remain in effect.
However, these sectoral tariffs must be applied uniformly to all countries.
This limits one of Trump's most characteristic strategies: negotiating "custom" tariffs with specific countries as a tool for bilateral pressure, unless there is a formal trade agreement approved under terms similar to the USMCA with Mexico and Canada.
The economic impact: 150 billion at stake
The most delicate immediate effect is financial.
During the last year, the federal government collected more than $150 billion from these tariffs.
With the retroactive annulment, the door is opened to a flood of claims from companies that paid those fees.
More than a thousand companies had already joined the lawsuits to prevent the payments from expiring.
The ruling does not detail the refund mechanism, but the problem is of enormous magnitude.
Judge Brett Kavanaugh, one of the three justices who voted against, warned that, "Returning the money to the companies will be very complex and confusing."
Additionally, he recalled that a significant portion of the tariff costs was passed on to consumers through price increases, which means that those who would receive refunds would be the importers or intermediaries, not necessarily the citizens who ended up paying more.
The budget impact could be twofold: on one hand, the return of billions; on the other, the loss of a revenue source that the administration had integrated into its fiscal strategy.
The deficit for 2025 could approach two trillion dollars, in a context where the U.S. public debt is already around 100% of GDP.
A battle that came from below
The Supreme Court ruling upholds previous decisions made by lower courts.
In August of last year, a Washington appeals court had already ruled that most of the tariffs imposed through executive orders were illegal, stating that Trump overstepped his authority by invoking emergency powers.
At that moment, the White House defended that the taxes were “a fundamental tool to reduce the budget deficit and protect the U.S. economy.”
Trump himself warned at Truth Social that if they disappeared, "it would be a total disaster for the country," and that the judicial decision would "literally destroy the United States of America." Now, the Supreme Court has closed the door on that interpretation.
What can Trump do now?
After the ruling was announced, Trump called the decision "a disgrace" and stated that he has "a plan B" to maintain tariffs.
The options, however, are more limited.
It could resort to Article 122 of the Commercial Law of 1974, which allows for the imposition of tariffs of up to 15% on a global scale, but only for a maximum period of 150 days.
You can also continue to use the so-called "Section 232" of the Trade Expansion Act of 1962, which allows for the imposition of tariffs for national security reasons, but only on specific sectors, not indiscriminately on all products from a country.
Other legal tools require demonstrating discriminatory or illegal practices—such as intellectual property theft—which significantly raises the evidentiary threshold and limits their practical application to very specific cases, such as in China.
The political context: An agenda under pressure
The decision comes at a politically sensitive time.
Trump had proposed using tariff revenues to finance $2,000 checks for middle-class families and to increase military spending to $1.5 trillion, arguing that it would be supported “based on tariff money.”
With the ruling, those funds are cast into doubt just as Congress is once again debating the budget to prevent a government shutdown.
Moreover, surveys indicate that tariffs do not have widespread public support, amid concerns about the rising cost of living and affordability.
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