Washington D.C -(Newsmax) – The Supreme Court ruled Friday that the International Emergency Economic Powers Act does not authorize a president to impose sweeping tariffs, delivering a major rebuke to President Donald Trump’s use of emergency powers to reshape U.S. trade policy.
In a consolidated decision in Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc., the Court held that Congress did not grant the President authority under the 1977 emergency statute to levy tariffs of “unlimited amount, duration, and scope.”
The ruling affirms a lower court judgment striking down the tariffs and vacates a separate district court decision for lack of jurisdiction.
Invoking the International Emergency Economic Powers Act (IEEPA), Trump imposed a 25% duty on most imports from Canada and Mexico and a 10% duty on most Chinese imports as part of his response to drug trafficking. He later imposed “reciprocal” tariffs of at least 10% on imports from all trading partners, with higher rates for dozens of countries.
In subsequent months, the administration repeatedly modified the tariffs, raising rates on Chinese goods to as high as 145% when combined with earlier measures and adjusting which products were covered.
Two groups of challengers filed suit.
In Washington, D.C., two small businesses — Learning Resources, Inc., and a co-plaintiff — argued that IEEPA did not authorize tariffs at all. In a separate case before the U.S. Court of International Trade, five small businesses and 12 states brought similar claims.
The Court of International Trade granted summary judgment to the challengers, and the U.S. Court of Appeals for the Federal Circuit, sitting en banc, largely affirmed, concluding that IEEPA’s authority to “regulate … importation” did not encompass the “unbounded” tariffs imposed by the President.
The Supreme Court agreed to hear the cases and consolidated them.
Article I grants Congress — not the President — the power to “lay and collect Taxes, Duties, Imposts and Excises,” a category that plainly includes tariffs. The government conceded that the President has no inherent authority to impose tariffs during peacetime and instead relied exclusively on IEEPA.
The administration argued that IEEPA’s authorization to “regulate … importation” delegated broad tariff authority to the President. But the Court rejected that interpretation.
Applying what it described as the “major questions” doctrine, the Court emphasized that it is reluctant to read ambiguous statutory text as granting extraordinary powers of vast economic and political significance.
Where Congress intends to delegate consequential authority — particularly over core powers such as taxation — it must do so clearly.
The majority stressed that when Congress has delegated tariff-setting authority in the past, it has done so explicitly and with defined limits. By contrast, IEEPA contains no mention of tariffs or duties.
The Court was also influenced by historical practice. In nearly five decades of IEEPA’s existence, no president had used it to impose tariffs of this kind. That lack of historical precedent, combined with the breadth of authority claimed, suggested the President had exceeded his lawful powers.
Ultimately, the Court concluded that the statutory authority to “regulate … importation” does not include the power to tax imports. The terms of IEEPA do not authorize tariffs, the Court wrote.
Justices Neil Gorsuch and Amy Coney Barrett joined the Chief Justice in applying the major questions doctrine. Justice Elena Kagan, joined by Justices Sonia Sotomayor and Ketanji Brown Jackson, agreed that IEEPA does not authorize tariffs but said the case could be resolved using ordinary tools of statutory interpretation without invoking the major questions doctrine.
Justice Jackson also wrote separately to emphasize legislative history.
Justice Clarence Thomas dissented, and Justice Brett Kavanaugh filed a separate dissent joined by Thomas and Justice Samuel Alito.
The dissenters argued that IEEPA’s language was broad enough to encompass tariffs and warned that the majority’s approach unduly constrained presidential flexibility in matters touching foreign affairs and national security.
The decision marks one of the most significant separations-of-powers rulings of the term. It reinforces Congress’s primacy over taxation and trade policy while limiting the executive branch’s ability to rely on emergency statutes to implement sweeping economic measures.
While the Court emphasized that it was not addressing the President’s authority under other trade statutes, the ruling makes clear that IEEPA cannot serve as a blank check for tariff policy.
Going forward, presidents seeking to impose broad tariffs will need to rely on more specific statutory authorities — or seek new authorization from Congress.
