Supreme Court Strikes Down Trump Tariffs, President Vows Modern Levies
WASHINGTON – The Supreme Court on Friday delivered a significant blow to former President Donald Trump’s trade agenda, striking down his sweeping tariffs in a 6-3 decision. In response, Trump announced plans to implement new tariffs, escalating trade tensions and creating uncertainty in the global economy.
Supreme Court Ruling
The Court ruled that Trump had wrongfully invoked the International Emergency Economic Powers Act (IEEPA) to justify the imposition of the tariffs. Chief Justice John Roberts, writing for the majority, stated that the President cannot unilaterally impose tariffs without clear congressional authorization, emphasizing that the power to tax rests with Congress under the Constitution. Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh dissented.
Trump’s Response: New Tariffs Announced
Hours after the ruling, Trump responded with a new 10% global tariff, invoking Section 122 of the Trade Act of 1974. This statute allows the President to impose temporary tariffs for up to 150 days, with any extension requiring congressional approval. On Saturday, Trump further announced an increase of these tariffs to 15%, effective immediately, and warned of additional levies to come. He stated the increase was to the “fully allowed, and legally tested, 15% level” on Truth Social.
A White House fact sheet released Friday indicated the original 10% tariffs would take effect on Tuesday, February 24, at 12:01 a.m. ET. Clarification from the White House regarding the timing of the increased tariffs was not immediately available.
Political Reactions
The Supreme Court’s decision drew sharp reactions from both sides of the political aisle. Trump characterized the ruling as “ridiculous, poorly written, and extraordinarily anti-American,” and criticized Justices Neil Gorsuch and Amy Coney Barrett for joining the majority.
Congressional Democrats celebrated the decision, with Senate Minority Leader Chuck Schumer calling the original tariffs “chaotic and illegal.” The issue of tariffs and their economic impact is expected to be a key focus for Democrats in the upcoming midterm elections.
Republicans were more divided, with some criticizing the Court’s decision and others defending Trump’s approach to trade.
Market Impact
Initial market reaction to the Supreme Court’s decision was positive, with stocks rallying before experiencing a pullback and subsequent recovery. Investors anticipate the ruling may ease trade tensions with U.S. Partners and potentially lead to refunds for affected companies, potentially reducing inflationary pressures.
Potential Refunds and Economic Implications
The ruling raises questions about potential refunds to importers. Estimates suggest the U.S. Government could owe over $175 billion in refunds following the Supreme Court’s decision. The process for handling these refunds remains unclear.