The US Supreme Court has dealt a powerful blow to Donald Trump's economic policy, ruling that the tariffs he imposed are illegal. The 6-3 decision targets the overreach of presidential constitutional powers. The ruling opens the way for importers to seek a refund of approximately 175 billion dollars, although experts warn that this process will not be automatic and may involve years of legal disputes. In response, an outraged Trump announced the implementation of fifteen percent import surcharges based on a completely different legal foundation.

Tariffs' Incompatibility with the Law

The Supreme Court decided by a 6:3 vote that imposing global tariffs under the International Emergency Economic Powers Act (IEEPA) exceeds the authorization of executive power.

Battle for Billion-Dollar Refunds

Analysts estimate that American buyers may seek compensation reaching 175 billion dollars for taxes already collected from them, although lawyers anticipate years-long disputes.

Trump's New Trade Retaliation

The US administration intends to use Article 122 of the Trade Act of 1974 in response to raise the surcharge to 15%, although this mechanism has limitations on its application.

The US Supreme Court delivered a severe blow to Donald Trump's economic policy on Friday, invalidating extensive tariffs imposed under the IEEPA law. The justices, by a vote of six to three, firmly concluded that the politician abused his authority by introducing broad trade restrictions without explicit consent from Congress. The ruling represents a spectacular victory for entrepreneurs such as Rick Woldenberg of Learning Resources and wine importer Victor Schwartz, who were among the first to take legal action against the Washington administration. Justice Neil Gorsuch emphasized in the groundbreaking opinion that executive power is not absolute, and taxation matters indisputably belong to the legislative branch. 175 mld USD — estimated amount of unlawfully collected fees Experts warn against premature optimism, even though initial cautious estimates point to refund claims amounting to 175 billion dollars. Analysts like Kenneth Rogoff from Harvard or Manfred Elsig argue that potential compensations will be lost in costly legal battles and ultimately benefit the accounts of American importers, not the European or Asian manufacturing firms themselves. German Chancellor Friedrich Merz assessed the court's decision as "good news," but politicians of the Old Continent maintain a high level of defensive readiness for their markets. The Trade Act of 1974 is the cornerstone of modern US tariff policy. Article 122 of this document was created to give the president a rapid, yet strictly time-limited, ability to respond to sudden deficits, not to impose widespread restrictions permanently. President Trump reacted to the events with visible anger, not sparing bitter words for the lawyers nominated with his own involvement. With unconcealed outrage, he announced circumventing the ruling by invoking a new legal basis – Article 122 of the Trade Act. The cabinet plans to apply a temporary surcharge at the level of 15 percent. The structure of the imposed surcharge differs from the mass tariffs by including specific conditions and a system of product exclusions, so the new blow will not affect all foreign exports uniformly. Investment markets show significant nervousness, expecting a continuation of Washington's hostile trade stance. „The Supreme Court members who voted against our very reasonable and proper method of imposing TARIFFS should be ashamed. Their decision was idiotic, but now it begins.” — Donald Trump

Emphasizes a fundamental victory of democratic checks and balances over the arbitrariness of executive power and economic nationalism. | Presents the verdict as a deeply detached action by socially unaccountable judges, weakening the US negotiating position on the international stage.

Mentioned People

  • Rick Woldenberg — Toy manufacturer entrepreneur who successfully sued over the unconstitutionality of tariffs against the rigor of the American executive branch.
  • Victor Schwartz — Wine importer from New York who was actively involved in initiating legal claims against the tariff imposition.
  • Kenneth Rogoff — Harvard University economist commenting on the scale of possibilities for tariff refunds through legal procedures.
  • Neil Gorsuch — Supreme Court Justice who argued against the interpretation of the head of state's powers.
  • Manfred Elsig — Director of the World Trade Institute, speaking about the consequences of the ruling for European business.