FILE U.S. President Donald Trump holds a chart next to U.S. Secretary of Commerce Howard Lutnick as Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., U.S., April 2, 2025. REUTERS/Carlos Barria/File Photo
The US Supreme Court struck down a suite of President Trump’s tariffs on Friday, a historic blow to the administration’s economic agenda.
The big picture: In a rare rebuke of Trump’s power, the nation’s highest court said many of the administration’s tariffs were illegal. The 6-3 ruling sets a new boundary for what policies presidents can impose without congressional approval.
“[T]he Government reads IEEPA to give the President power to unilaterally impose unbounded tariffs and change them at will. That view would represent a transformative expansion of the President’s authority over tariff policy,” the ruling says, referring to the International Emergency Economic Powers Act.
The ruling might give way to a potentially chaotic refund process that could see billions of dollars returned to businesses that paid the tariffs the Supreme Court now deems illegal.
- The Court says nothing today about whether, and if so how, the government should go about returning the billions of dollars that it has collected from importers,” Justice Brett Kavanaugh wrote in his dissent.
- Another concern is how the ruling may affect existing trade agreements, Kavanaugh wrote. Tariffs imposed under IEEPA have played a role in advancing trade deals totaling trillions of dollars — including agreements with China, the United Kingdom and Japan, he noted.
- It’s unclear how other nations will respond; the tariffs underpin a slew of trade deals announced by the administration earlier this year.
Stocks moved higher after the court’s ruling, but only modestly. The S&P 500 was trading about 0.5% higher in mid-morning trading.
- Shares of furniture companies, whose import levies had been paused by Trump last month, surged on Friday. Wayfair rose more than 5% and RH gained 4%.
- Gold and silver dropped sharply after the announcement but quickly rebounded. Although both metals were still below their levels at the time of the ruling, they remain higher on the day overall.
- Bond yields rose broadly following the decision, with 10-year Treasuries at 4.09%.
- Zoom out: The Supreme Court issued a ruling months after an expedited hearing in November.
- Trump imposed more than half of the current tariffs under the International Emergency Economic Powers Act, leaning on unprecedented authorities to impose global levies.
- During the hearing, some justices — including some conservatives on the bench — were skeptical that Trump could sidestep Congress and single-handedly impose such sweeping tariffs.
- The intrigue: Don’t expect the tariffs to disappear.
- The Trump administration has previously said it would lean on other trade powers to replace any tariffs struck down by the Supreme Court.
- Axios
