Supreme Court Rejects Donald Trump’s Global Tariffs and Forces Washington to Address Billions in Refunds

In a ruling that could reshape the balance of power in Washington, the US Supreme Court has struck down the sweeping global tariffs imposed by former president Donald Trump.

The 6–3 decision marks one of the most significant legal defeats of his political career — and it hits at the core of his economic philosophy.

At the heart of the dispute was Mr Trump’s attempt to use emergency powers to impose what he branded as “reciprocal” tariffs on nearly every country.

It was a bold move, framed as a defense of American workers and industries.

But the court ultimately decided he had gone too far.

The Constitution vs. Emergency Power

The majority opinion, written by Chief Justice John Roberts, was blunt.

The Constitution, he said, “very clearly” gives Congress — not the president — the authority to levy taxes, and tariffs fall squarely into that category.

“The framers did not vest any part of the taxing power in the executive branch,” Roberts wrote, drawing a hard constitutional line.

In other words, even if tariffs might be smart policy — or politically popular — the president cannot simply create them without lawmakers signing off.

Three conservative justices — Samuel Alito, Clarence Thomas, and Brett Kavanaugh — dissented. Kavanaugh argued that under existing legal text and historical practice, the tariffs were lawful. Policy wisdom, he suggested, was beside the point.

The Law Trump Leaned On

The legal fight centered on the International Emergency Economic Powers Act of 1977 (IEEPA).

The law allows presidents to regulate commerce during declared national emergencies.

Historically, it’s been used dozens of times — mostly for sanctions.

But Mr Trump went further. He invoked the law to justify broad import taxes, first targeting Canada, China and Mexico over what he described as a drug trafficking emergency, and later expanding to a near-global tariff regime to tackle trade deficits he labeled a national crisis.

No previous president had used IEEPA specifically to create sweeping import taxes.

That novelty became a key weakness in court.

Political Irony on the Bench

There’s also an undeniable political twist here. Mr Trump appointed three justices during his first term, reshaping the court with a conservative majority.

Yet this was the first major piece of his sweeping second-term agenda to reach the high court — and it ended in defeat.

That’s particularly striking given that the same court has recently delivered him short-term victories on its emergency docket, allowing controversial executive actions to proceed while litigation continues.

But on tariffs, the majority drew a constitutional boundary.

Billions Collected, Now What?

The practical consequences are enormous.

According to federal data, the Treasury collected more than $133 billion under these tariffs.

The Congressional Budget Office estimated the broader economic impact could reach roughly $3 trillion over a decade.

Now comes the messy part: refunds.

Justice Kavanaugh warned in his dissent that returning billions to importers could become chaotic.

The court deliberately avoided outlining how — or even whether — the government must repay the money.

That silence leaves lower courts and federal agencies to sort it out.

Major corporations like Costco have already lined up in court demanding their money back. Small businesses, many of which say the tariffs crushed their margins, are also pushing for swift action.

A coalition called “We Pay the Tariffs,” representing more than 800 small businesses, says a legal victory means little without automatic refunds.

Its executive director, Dan Anthony, is urging the administration to create a fast and efficient repayment system.

The Economic and Political Fallout

Tariffs have long been central to Mr Trump’s brand of economic nationalism.

He has argued that trade deficits weaken America and that tariffs are a powerful negotiating tool.

During his first term, tariffs on Chinese goods led to retaliatory measures from Beijing, disrupted supply chains, and prompted billions in federal aid to American farmers.

Polling has consistently shown mixed public support.

While some voters back tough trade measures, many worry about rising consumer prices — especially during periods of inflation and affordability concerns.

Mr Trump reportedly called the ruling “a disgrace” after learning of it during a meeting with governors.

For him, the decision represents more than a policy loss; it challenges the executive authority he has vigorously defended.

Why This Case Matters Beyond Tariffs

This ruling is about more than trade. It’s about separation of powers.

The Constitution clearly grants Congress the power to tax.

Over decades, however, Congress has delegated broad authority to presidents in areas like national security and trade.

The Court’s decision signals that such delegations have limits — especially when they brush up against explicit constitutional text.

It also echoes past rulings where the Court has curbed executive overreach, including its decision striking down former president Joe Biden’s large-scale student loan forgiveness plan for exceeding statutory authority.

What’s Next?

This decision does not completely tie Mr Trump’s hands.

The Court made clear he can still pursue tariffs under other trade laws — such as Section 232 of the Trade Expansion Act or Section 301 of the Trade Act — though those statutes come with procedural safeguards and narrower scopes.

The immediate battle will likely shift to:

• Refund litigation in lower courts

• Congressional negotiations over trade authority

• New tariff frameworks crafted under alternative laws

• And potentially, fresh political messaging as the administration recalibrates

Expect lawmakers on both sides to revisit how much power Congress should delegate to the executive branch in economic emergencies.

The Bigger Picture

For decades, presidents of both parties have expanded executive authority.

This ruling signals that the Supreme Court is prepared to enforce structural constitutional limits — even against a president who helped shape the bench.

For Mr Trump, the loss cuts into a defining pillar of his economic platform.

For Congress, it reasserts its constitutional muscle. And for businesses that paid billions in tariffs, the fight may be just beginning.

Summary

The US Supreme Court ruled 6–3 to strike down Donald Trump’s global tariffs imposed under emergency powers, declaring that the Constitution clearly gives Congress — not the president — the authority to levy taxes, including tariffs.

Chief Justice John Roberts wrote that the framers never vested taxing power in the executive branch.

Three conservative justices dissented, arguing the tariffs were lawful under existing statute.

The ruling leaves open how the government will handle refunding more than $133 billion already collected, a process expected to be complicated.

While Trump can still pursue tariffs through other trade laws, the decision delivers a major blow to his economic agenda and reinforces constitutional limits on presidential power.