Supreme Court Strikes Down Trump’s Tariffs in 6–3 Ruling

• The Supreme Court ruled Trump exceeded authority using emergency powers for tariffs.
• The 6-3 ruling disagreed over IEEPA’s authority over tariff action. 
• Trump signed a new 10% tariff order using alternative trade laws.

In one of the most consequential economic rulings in years, the U.S. Supreme Court has struck down a major portion of President Donald Trump’s sweeping global tariffs, delivering a 6–3 decision that reshapes U.S. trade policy and sets up a potential battle over billions in refunds.

Why the Court Ruled Against the Tariffs

President Trump had relied on IEEPA, a law traditionally used for sanctions during national emergencies, to justify broad “reciprocal” tariffs. He cited fentanyl trafficking involving China, Canada and Mexico, along with constant trade imbalances, as emergency threats.

The administration argued that IEEPA’s authority to “regulate importation” allowed tariff action.

The Supreme Court disagreed. Chief Justice John Roberts wrote that when Congress grants tariff authority, it does so clearly and with limits. The majority found that IEEPA does not explicitly authorize tariffs.

However, the court did not decide whether importers are entitled to refunds. That issue now heads to lower courts, most likely the Court of International Trade.

The $175 Billion Refund Question

The financial stakes are enormous. Estimates show between $115 billion and $145 billion was collected under the invalidated tariffs, with some projections as high as $175 billion.

Prediction platform Polymarket currently places a 40% chance that courts could ultimately force Trump to refund $175 billion in tariff revenue.

Trump has vowed to fight any repayment effort “for the next five years.” Illinois Governor JB Pritzker has already sent an $8.6 billion invoice to the White House demanding refunds for his state. More than 1,000 companies had already filed claims in anticipation of this outcome.

There is currently no formal refund system in place, and experts warn the process could take years.

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Despite the ruling, Trump quickly signed an order imposing an additional 10% tariff on all countries using alternative trade authorities. He said that he already has a backup plan and said, “I’m ashamed of certain members of the court, absolutely ashamed for not having the courage to do what’s right for our country,”

The administration is also exploring Section 122 and Section 301 of the 1974 Trade Act, along with Section 232 national security tariffs.

Markets React

Crypto markets remained calm and did not react strongly to the move.  Stocks initially rose on the news, as investors viewed the decision as a potential boost to economic growth and corporate earnings.

However, Treasury yields climbed as traders considered the impact of lost tariff revenue on the federal deficit. If refunds are ordered, the fiscal impact could widen the gap further.

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