{"id":4995,"date":"2026-02-20T16:05:47","date_gmt":"2026-02-20T21:05:47","guid":{"rendered":"https:\/\/waltercounsel.com\/?p=4995"},"modified":"2026-03-11T16:34:02","modified_gmt":"2026-03-11T20:34:02","slug":"supreme-court-strikes-down-trump-tariffs-what-happens-next","status":"publish","type":"post","link":"https:\/\/waltercounsel.com\/?p=4995","title":{"rendered":"Supreme Court Strikes Down Trump Tariffs: What Happens Next"},"content":{"rendered":"\n

SUMMARY\u00a0\u00a0\u00a0<\/strong>The Supreme Court ruled 6-3 today that IEEPA, the International Emergency Economic Powers Act of 1977<\/a>, does not authorize the President to impose tariffs. The decision in\u00a0Learning Resources, Inc. v. Trump<\/em>, 607 U.S. __ (2026)<\/a>, invalidates roughly half of all tariff revenue the government has collected over the past year. Trump responded within hours by invoking alternative statutory authority and launching new trade investigations. Businesses that paid the struck-down tariffs may be owed up to $175 billion in refunds, though collecting that money may require years of litigation that the Court deliberately left unresolved.<\/p>\n\n\n\n

The Decision: Two Words That Cannot Bear Such Weight<\/h2>\n\n\n\n

Since early 2025, President Trump imposed sweeping tariffs on imports from virtually every country by declaring national emergencies under IEEPA, a 1977 statute authorizing the president to \u201cinvestigate, block … regulate, direct and compel, nullify, void, prevent or prohibit … importation or exportation\u201d when he identifies an unusual and extraordinary threat. The administration read the words \u201cregulate\u201d and \u201cimportation\u201d to authorize tariffs of unlimited amount and duration on any product from any country. Today, six justices disagreed.<\/p>\n\n\n

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Chief Justice Roberts opened the majority opinion with the core problem: \u201cBased on two words separated by 16 others in Section 1702(a)(1)(B) of IEEPA \u2014 \u2018regulate\u2019 and \u2018importation\u2019 \u2014 the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time. Those words cannot bear such weight.\u201d Slip Op. at 5<\/a>.<\/p>\n\n\n\n

The constitutional foundation is Article I, Section 8, which gives Congress, not the president, the power to \u201clay and collect Taxes, Duties, Imposts and Excises.\u201d The Court noted that the power to impose tariffs is \u201cvery clear[ly] . . . a branch of the taxing power,\u201d citing\u00a0Gibbons v. Ogden<\/em>, 9 Wheat. 1, 201 (1824).\u00a0Slip Op. at 6<\/a>. Roberts quoted Madison\u2019s observation that the Framers gave Congress \u201calone … access to the pockets of the people,\u201d The Federalist No. 48<\/a>, requiring that all bills for raising revenue originate in the House. The government conceded, as it had to, that the president has no inherent peacetime authority to impose tariffs. Its entire case rested on IEEPA.<\/p>\n\n\n\n

The textual analysis is straightforward. IEEPA\u2019s \u00a71702(a)(1)(B) lists nine verbs \u2014 investigate, block, regulate, direct and compel, nullify, void, prevent, prohibit \u2014 paired with eleven objects describing foreign property transactions. The Court observed that none of the other ninety-eight possible verb-object combinations involves raising revenue; each instead imposes penalties, restrictions or controls. Roberts wrote: \u201cAbsent from this lengthy list of specific powers is any mention of tariffs or duties. Had Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly, as it consistently has in other tariff statutes.\u201d\u00a0Slip Op. at 14<\/a>.<\/p>\n\n\n\n

The majority also noted the telling absence of historical practice: \u201cIt is also telling that in IEEPA\u2019s \u2018half century of existence,\u2019 no President has invoked the statute to impose any tariffs \u2014 let alone tariffs of this magnitude and scope.\u201d Slip Op. at 9<\/a> (quoting National Federation of Independent Business v. OSHA<\/em>, 595 U.S. 109, 119 (2022)). That historical silence, combined with the breadth of authority claimed, put the tariffs beyond the president\u2019s \u201clegitimate reach.\u201d Id.<\/p>\n\n\n\n

A Fractured Majority: Three Routes to the Same Destination<\/h2>\n\n\n\n

The six-justice majority agreed on the outcome but not entirely on the reasoning. Chief Justice Roberts, joined by Justices Gorsuch and Barrett, applied the \u201cmajor questions doctrine,\u201d a canon requiring that when the executive claims sweeping new authority over a major area of the economy or governance, it must point to \u201cclear congressional authorization.\u201d\u00a0Biden v. Nebraska<\/a><\/em> (2023). Roberts acknowledged that no exception to this doctrine exists for emergency statutes, and that foreign affairs implications do not make it more likely Congress would cede the taxing power through ambiguous language.\u00a0Slip Op. at 11\u201312<\/a>.<\/p>\n\n\n\n

Justice Kagan, joined by Justices Sotomayor and Jackson, concurred in the judgment but declined to reach the major questions doctrine. In her view, \u201cordinary principles of statutory interpretation\u201d independently resolve the case.\u00a0Kagan Op. at 3<\/a>. She concluded that the word \u201cregulate\u201d simply does not encompass taxation, a point she demonstrated by noting that hundreds of provisions in the U.S. Code grant agencies the authority to \u201cregulate\u201d something, and \u201cthe Government cannot identify a single one that is understood to grant taxing power.\u201d\u00a0Kagan Op. at 4<\/a>\u00a0(citing Tr. of Oral Arg. 30). When Congress delegates tariff authority, it uses different vocabulary entirely, \u201cduty,\u201d \u201ctariff,\u201d \u201csurcharge,\u201d none of which appears in IEEPA. Id.<\/p>\n\n\n\n

Kagan\u2019s statutory analysis identified a particularly sharp structural point: if IEEPA\u2019s \u201cregulate . . . importation\u201d grants tariff power, it would also grant the power to tax exports \u2014 a result expressly forbidden by Art. I, \u00a79, cl. 5 of the Constitution. See also Slip Op. at 15<\/a>. More practically, she noted that reading IEEPA to grant unlimited tariff authority would \u201ceffectively erase\u201d all of Title 19\u2019s carefully confined tariff provisions, since any president could escape their procedural requirements by the \u201csimple expedient of identifying a foreign threat.\u201d Kagan Op. at 6<\/a>.<\/p>\n\n\n\n

Justice Jackson concurred separately to add that legislative history confirms what text already establishes. The Senate Report accompanying IEEPA describes the delegation provision as authorizing the president to \u201ccontrol or freeze property transactions where a foreign interest is involved.\u201d S. Rep. No. 95\u2013466, p. 5 (1977). The House Report similarly limits it to regulating or freezing such property. Neither report suggests Congress intended to cede its taxing power. Jackson Op. at 2\u20133<\/a>.<\/p>\n\n\n\n

The Kavanaugh Dissent: Wrong on the Law, Right About What Comes Next<\/h2>\n\n\n\n

Justice Kavanaugh dissented, joined by Justices Thomas and Alito. His central thesis: when IEEPA was enacted in 1977, Congress reused language from the Trading with the Enemy Act<\/a> (TWEA) that had already been construed to authorize tariffs, specifically in the 1976 Supreme Court decision\u00a0Federal Energy Administration v. Algonquin SNG, Inc.<\/a><\/em> (1976), and in the Yoshida<\/a> case upholding Nixon\u2019s 1971 tariffs under virtually identical statutory language. For Kavanaugh, Congress\u2019s reenactment of that language in 1977 incorporated its established meaning. The majority distinguished\u00a0Algonquin<\/em>\u00a0on the ground that Section 232\u2019s explicit reference to \u201cduties\u201d made it natural to read its companion provision to authorize them, a textual cue absent from IEEPA.\u00a0Slip Op. at 18\u201320<\/a>.<\/p>\n\n\n\n

Whatever its legal force, the Kavanaugh dissent is also a candid forward-looking assessment. Acknowledging that \u201cthe decision might not substantially constrain a President\u2019s ability to order tariffs going forward,\u201d Kavanaugh catalogued the alternative statutory authorities the president retains: Section 232 of the Trade Expansion Act of 1962; Sections 122, 201, and 301 of the Trade Act of 1974; and Section 338 of the Tariff Act of 1930. Kavanaugh Dissent at 5\u20136<\/a>. His summary: \u201cIn essence, the Court today concludes that the President checked the wrong statutory box by relying on IEEPA rather than another statute to impose these tariffs.\u201d Id. at 6.<\/p>\n\n\n\n

On the immediate practical consequences, Kavanaugh was direct, \u201cThe United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others. As was acknowledged at oral argument, the refund process is likely to be a \u2018mess.\u2019\u201d\u00a0Kavanaugh Dissent at 6\u20137<\/a>\u00a0(citing Tr. of Oral Arg. 153\u2013155). He also warned that IEEPA tariffs \u201chave helped facilitate trade deals worth trillions of dollars, including with foreign nations from China to the United Kingdom to Japan,\u201d and that the decision \u201ccould generate uncertainty regarding those trade arrangements.\u201d Id. at 7.<\/p>\n\n\n\n

The Financial Scale<\/h2>\n\n\n\n

The economic stakes are significant. According to\u00a0NPR<\/a>, IEEPA tariffs account for approximately half of all import taxes the government has been collecting monthly.\u00a0CBS News<\/a>\u00a0reported that Treasury collected $287 billion in total tariff revenue in 2025 \u2014 up 192% year-over-year \u2014 with roughly $130 billion attributable to the now-invalidated IEEPA tariffs. The\u00a0Penn Wharton Budget Model<\/a>\u00a0estimates total refund exposure at more than $175 billion based on cumulative IEEPA collections through early 2026. Senior PNC economist Brian LeBlanc estimated that the ruling drops the effective average tariff rate from approximately 9.5% to around 5%, per\u00a0CNBC<\/a>.<\/p>\n\n\n\n

Trump\u2019s Response: An Immediate Pivot<\/h2>\n\n\n\n

Within hours of the ruling, the administration invoked the alternative authorities Kavanaugh had catalogued. As\u00a0CNBC reported<\/a>, Trump announced a new 10% worldwide tariff under Section 122 of the Trade Act of 1974<\/a>, which authorizes a temporary import surcharge to address balance-of-payments deficits, 19 U.S.C. \u00a72132(a). He simultaneously launched new Section 301 investigations targeting unfair foreign trade practices.<\/p>\n\n\n\n

On refunds, Trump offered no concession: \u201cI guess it has to get litigated for the next two years…. We\u2019ll end up being in court for the next five years.\u201d That is a signal that the administration intends to contest every step of the refund process, consistent with Kavanaugh\u2019s prediction of a \u201cmess.\u201d<\/p>\n\n\n\n

The Alternative Tariff Authorities<\/h2>\n\n\n\n

The Kavanaugh dissent\u2019s enumeration of alternative authorities is, in effect, the administration\u2019s post-ruling tariff playbook. Each statute comes with procedural requirements and limitations that IEEPA, as an emergency statute, did not impose. Here is what the president retains:<\/p>\n\n\n\n

Section 232 \u2014 National Security Tariffs<\/em><\/h3>\n\n\n\n

Section 232 of the Trade Expansion Act of 1962<\/a> authorizes the president, after a Commerce Department investigation, to \u201cadjust the imports of [an] article and its derivatives so that such imports will not threaten to impair the national security.\u201d \u00a71862(c)(1)(A). Trump\u2019s existing steel and aluminum tariffs imposed under Section 232 were unaffected by today\u2019s ruling and remain in effect. The administration has already initiated nine new Section 232 investigations. The statute\u2019s constraint is product-specificity: it cannot support a blanket rate across all imports from all countries, as the Court of Appeals held<\/a> in this litigation that IEEPA\u2019s tariffs were \u201cunbounded in scope, amount, and duration.\u201d.<\/p>\n\n\n\n

Section 301 \u2014 Unfair Trade Practices<\/em><\/h3>\n\n\n\n

Section 301 of the Trade Act of 1974 authorizes the U.S. Trade Representative to \u201cimpose duties\u201d when the USTR determines that a foreign country\u2019s act, policy, or practice is \u201cunjustifiable and burdens or restricts United States commerce.\u201d \u00a7\u00a72411(a), (c)(1)(B). Trump used Section 301 extensively in his first term to impose tariffs on hundreds of billions of dollars in Chinese imports that remain in place today. The constraint: the USTR must conduct a formal investigation and document specific practices, a country-by-country process that cannot be replicated at IEEPA\u2019s speed and breadth.<\/p>\n\n\n\n

Section 122 \u2014 The Temporary Surcharge<\/em><\/h3>\n\n\n\n

Section 122 allows the president to impose a \u201ctemporary import surcharge\u201d to address \u201clarge and serious United States balance-of-payments deficits.\u201d 19 U.S.C. \u00a72132(a). No investigation is required. The significant limitation: the surcharge expires after 150 days by statute. As Kavanaugh\u2019s dissent acknowledged, Section 122 is one of the \u201cfew additional procedural steps\u201d that distinguish these alternative authorities from IEEPA. Kavanaugh Dissent at 5<\/a>. It functions as a bridge, buying roughly five months while Section 232 and 301 frameworks are built out.<\/p>\n\n\n\n

Section 338 \u2014 The Dormant Provision<\/em><\/h3>\n\n\n\n

Section 338 of the Tariff Act of 1930 permits the president to impose tariffs of up to 50% on imports from countries that \u201cplace[ ] any burden or disadvantage upon the commerce of the United States.\u201d \u00a71338(d). It carries no time limit and requires no investigation. Kavanaugh flagged it explicitly as an available tool. Kavanaugh Dissent at 6<\/a>. It has never been used, and novel application of a 95-year-old provision would invite its own legal challenges.<\/p>\n\n\n\n

Congressional Authorization<\/em><\/h3>\n\n\n\n

The constitutionally cleanest path would be explicit legislation granting the president defined tariff authority with appropriate scope and procedural safeguards. This would be unassailable. The obstacle is political: it requires sustained congressional majorities and offers no guarantee of the speed or breadth the administration has sought through executive action.<\/p>\n\n\n\n

The Refund Question<\/h1>\n\n\n\n

The ruling struck down the tariffs but was silent on what happens to the money already collected. That silence was deliberate. The Court left the refund question to the Court of International Trade, which has exclusive jurisdiction over customs matters. As\u00a0CNBC reported<\/a>, more than 1,000 refund-related cases have already been filed in the CIT, and the Justice Department and plaintiffs\u2019 counsel have jointly requested appointment of a steering committee to manage the caseload.<\/p>\n\n\n\n

One significant protection for importers: government counsel has already represented on the record in the CIT that it will not contest the court\u2019s authority to order reliquidation and refunds if the tariffs were invalidated. That concession narrows the fight to mechanics and timing rather than the underlying legal authority to issue refunds. It does not, however, mean payment will be prompt or automatic. Kavanaugh identified the core complication: many importers passed their tariff costs on to customers, raising the question of whether those companies are entitled to a refund they did not ultimately absorb. Kavanaugh Dissent at 6\u20137<\/a>.<\/p>\n\n\n\n

Economic and Political Context<\/h1>\n\n\n\n

The political reaction was partisan and predictable.\u00a0CNBC reported<\/a>\u00a0that House Budget Committee ranking member Brendan Boyle called the ruling \u201ca victory for every American family paying higher prices because of Trump\u2019s tariff taxes,\u201d while Ways and Means ranking member Richard Neal called it \u201ca victory for the American people, the rule of law, and our standing in the global economy.\u201d<\/p>\n\n\n\n

The economic record is complicated. Despite the tariffs\u2019 stated goal of revitalizing American manufacturing,\u00a0NPR reported<\/a>\u00a0that U.S. factories shed 108,000 jobs in 2025. Many manufacturers depend on imported components, meaning tariffs raised their input costs alongside the protective benefit. Cato Institute economist Scott Lincicome called the ruling \u201cwelcome news for American importers, the United States economy, and the rule of law,\u201d per\u00a0CBS News<\/a>, while noting that the government must refund the tariff duties it \u201cillegally collected.\u201d<\/p>\n\n\n\n

The Bottom Line<\/h1>\n\n\n\n

Today\u2019s ruling is a separation-of-powers decision of the first order. The Framers assigned the taxing power to Congress, the branch most directly accountable to the electorate, because they recognized, as Hamilton put it, that it was \u201cthe most important of the authorities proposed to be conferred upon the Union.\u201d The Federalist No. 33<\/a>. The Court\u2019s holding reaffirms that principle: a president who wants to impose tariffs as a matter of trade policy must do so through the channels Congress has built, with the procedural safeguards and substantive limits those statutes impose.<\/p>\n\n\n\n

This ruling does not end the tariff era. Kavanaugh\u2019s dissent is correct that the administration can reconstruct much of its tariff architecture through Sections 232, 301, 122, and 338; albeit with more process, more specificity and more legal constraint than IEEPA\u2019s emergency framework required. Georgetown trade law professor Kathleen Claussen has observed that it is difficult to see any path where tariffs disappear entirely. The difference is structural: each alternative statute requires the government to justify its actions with documented facts and conform to legislative limits. That is not a prohibition on trade policy. It is the constitutional order working as designed.<\/p>\n\n\n\n

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