The Supreme Court delivered a significant check on executive authority by ruling that the International Emergency Economic Powers Act, a 1977 statute, does not empower the president to impose broad import tariffs under the guise of emergency powers. The decision, decided 6-3, invalidates President Donald Trump’s use of the law to justify levies on a range of trading partners.
IEEPA, the statute at the center of the case, grants the president broad powers over international economic transactions when a national emergency is declared. The Trump administration had relied on that statute as its legal basis for placing tariffs on imports from a host of countries.
At oral arguments late last year, several justices voiced skepticism about the administration's interpretation of IEEPA, a tone that left market participants expecting a ruling against the White House. The court’s final opinion aligned with that skepticism and found that IEEPA does not authorize the imposition of the tariffs at issue.
The ruling removes one of the legal pillars the administration had used to pursue trade levers during the president’s second term. Observers note that tariffs have been a repeated policy tool for the administration - a means to extract concessions in international negotiations - and the court’s decision could alter the administration’s approach to such measures going forward.
The case’s outcome has immediate legal significance and carries potential implications for trade policy and market participants that had been tracking the litigation. Given indications from the bench during hearings, markets had been anticipating a decision unfavorable to the administration.
This remains a developing story. Please check back later for updates.