SUMMARY The Supreme Court ruled 6-3 today that IEEPA, the International Emergency Economic Powers Act of 1977, does not authorize the President to impose tariffs. The decision in Learning Resources, Inc. v. Trump, 607 U.S. __ (2026), 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.

The Decision: Two Words That Cannot Bear Such Weight

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 “investigate, block … regulate, direct and compel, nullify, void, prevent or prohibit … importation or exportation” when he identifies an unusual and extraordinary threat. The administration read the words “regulate” and “importation” to authorize tariffs of unlimited amount and duration on any product from any country. Today, six justices disagreed.

Chief Justice Roberts opened the majority opinion with the core problem: “Based on two words separated by 16 others in Section 1702(a)(1)(B) of IEEPA — ‘regulate’ and ‘importation’ — 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.” Slip Op. at 5.

The constitutional foundation is Article I, Section 8, which gives Congress, not the president, the power to “lay and collect Taxes, Duties, Imposts and Excises.” The Court noted that the power to impose tariffs is “very clear[ly] . . . a branch of the taxing power,” citing Gibbons v. Ogden, 9 Wheat. 1, 201 (1824). Slip Op. at 6. Roberts quoted Madison’s observation that the Framers gave Congress “alone … access to the pockets of the people,” The Federalist No. 48, 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.

The textual analysis is straightforward. IEEPA’s §1702(a)(1)(B) lists nine verbs — investigate, block, regulate, direct and compel, nullify, void, prevent, prohibit — 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: “Absent 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.” Slip Op. at 14.

The majority also noted the telling absence of historical practice: “It is also telling that in IEEPA’s ‘half century of existence,’ no President has invoked the statute to impose any tariffs — let alone tariffs of this magnitude and scope.” Slip Op. at 9 (quoting National Federation of Independent Business v. OSHA, 595 U.S. 109, 119 (2022)). That historical silence, combined with the breadth of authority claimed, put the tariffs beyond the president’s “legitimate reach.” Id.

A Fractured Majority: Three Routes to the Same Destination

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 “major questions doctrine,” a canon requiring that when the executive claims sweeping new authority over a major area of the economy or governance, it must point to “clear congressional authorization.” Biden v. Nebraska (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. Slip Op. at 11–12.

Justice Kagan, joined by Justices Sotomayor and Jackson, concurred in the judgment but declined to reach the major questions doctrine. In her view, “ordinary principles of statutory interpretation” independently resolve the case. Kagan Op. at 3. She concluded that the word “regulate” 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 “regulate” something, and “the Government cannot identify a single one that is understood to grant taxing power.” Kagan Op. at 4 (citing Tr. of Oral Arg. 30). When Congress delegates tariff authority, it uses different vocabulary entirely, “duty,” “tariff,” “surcharge,” none of which appears in IEEPA. Id.

Kagan’s statutory analysis identified a particularly sharp structural point: if IEEPA’s “regulate . . . importation” grants tariff power, it would also grant the power to tax exports — a result expressly forbidden by Art. I, §9, cl. 5 of the Constitution. See also Slip Op. at 15. More practically, she noted that reading IEEPA to grant unlimited tariff authority would “effectively erase” all of Title 19’s carefully confined tariff provisions, since any president could escape their procedural requirements by the “simple expedient of identifying a foreign threat.” Kagan Op. at 6.

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 “control or freeze property transactions where a foreign interest is involved.” S. Rep. No. 95–466, 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 2–3.

The Kavanaugh Dissent: Wrong on the Law, Right About What Comes Next

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 (TWEA) that had already been construed to authorize tariffs, specifically in the 1976 Supreme Court decision Federal Energy Administration v. Algonquin SNG, Inc. (1976), and in the Yoshida case upholding Nixon’s 1971 tariffs under virtually identical statutory language. For Kavanaugh, Congress’s reenactment of that language in 1977 incorporated its established meaning. The majority distinguished Algonquin on the ground that Section 232’s explicit reference to “duties” made it natural to read its companion provision to authorize them, a textual cue absent from IEEPA. Slip Op. at 18–20.

Whatever its legal force, the Kavanaugh dissent is also a candid forward-looking assessment. Acknowledging that “the decision might not substantially constrain a President’s ability to order tariffs going forward,” 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 5–6. His summary: “In 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.” Id. at 6.

On the immediate practical consequences, Kavanaugh was direct, “The 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 ‘mess.’” Kavanaugh Dissent at 6–7 (citing Tr. of Oral Arg. 153–155). He also warned that IEEPA tariffs “have helped facilitate trade deals worth trillions of dollars, including with foreign nations from China to the United Kingdom to Japan,” and that the decision “could generate uncertainty regarding those trade arrangements.” Id. at 7.

The Financial Scale

The economic stakes are significant. According to NPR, IEEPA tariffs account for approximately half of all import taxes the government has been collecting monthly. CBS News reported that Treasury collected $287 billion in total tariff revenue in 2025 — up 192% year-over-year — with roughly $130 billion attributable to the now-invalidated IEEPA tariffs. The Penn Wharton Budget Model estimates 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 CNBC.

Trump’s Response: An Immediate Pivot

Within hours of the ruling, the administration invoked the alternative authorities Kavanaugh had catalogued. As CNBC reported, Trump announced a new 10% worldwide tariff under Section 122 of the Trade Act of 1974, which authorizes a temporary import surcharge to address balance-of-payments deficits, 19 U.S.C. §2132(a). He simultaneously launched new Section 301 investigations targeting unfair foreign trade practices.

On refunds, Trump offered no concession: “I guess it has to get litigated for the next two years…. We’ll end up being in court for the next five years.” That is a signal that the administration intends to contest every step of the refund process, consistent with Kavanaugh’s prediction of a “mess.”

The Alternative Tariff Authorities

The Kavanaugh dissent’s enumeration of alternative authorities is, in effect, the administration’s 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:

Section 232 — National Security Tariffs

Section 232 of the Trade Expansion Act of 1962 authorizes the president, after a Commerce Department investigation, to “adjust the imports of [an] article and its derivatives so that such imports will not threaten to impair the national security.” §1862(c)(1)(A). Trump’s existing steel and aluminum tariffs imposed under Section 232 were unaffected by today’s ruling and remain in effect. The administration has already initiated nine new Section 232 investigations. The statute’s constraint is product-specificity: it cannot support a blanket rate across all imports from all countries, as the Court of Appeals held in this litigation that IEEPA’s tariffs were “unbounded in scope, amount, and duration.”.

Section 301 — Unfair Trade Practices

Section 301 of the Trade Act of 1974 authorizes the U.S. Trade Representative to “impose duties” when the USTR determines that a foreign country’s act, policy, or practice is “unjustifiable and burdens or restricts United States commerce.” §§2411(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’s speed and breadth.

Section 122 — The Temporary Surcharge

Section 122 allows the president to impose a “temporary import surcharge” to address “large and serious United States balance-of-payments deficits.” 19 U.S.C. §2132(a). No investigation is required. The significant limitation: the surcharge expires after 150 days by statute. As Kavanaugh’s dissent acknowledged, Section 122 is one of the “few additional procedural steps” that distinguish these alternative authorities from IEEPA. Kavanaugh Dissent at 5. It functions as a bridge, buying roughly five months while Section 232 and 301 frameworks are built out.

Section 338 — The Dormant Provision

Section 338 of the Tariff Act of 1930 permits the president to impose tariffs of up to 50% on imports from countries that “place[ ] any burden or disadvantage upon the commerce of the United States.” §1338(d). It carries no time limit and requires no investigation. Kavanaugh flagged it explicitly as an available tool. Kavanaugh Dissent at 6. It has never been used, and novel application of a 95-year-old provision would invite its own legal challenges.

Congressional Authorization

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.

The Refund Question

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 CNBC reported, more than 1,000 refund-related cases have already been filed in the CIT, and the Justice Department and plaintiffs’ counsel have jointly requested appointment of a steering committee to manage the caseload.

One significant protection for importers: government counsel has already represented on the record in the CIT that it will not contest the court’s 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 6–7.

Economic and Political Context

The political reaction was partisan and predictable. CNBC reported that House Budget Committee ranking member Brendan Boyle called the ruling “a victory for every American family paying higher prices because of Trump’s tariff taxes,” while Ways and Means ranking member Richard Neal called it “a victory for the American people, the rule of law, and our standing in the global economy.”

The economic record is complicated. Despite the tariffs’ stated goal of revitalizing American manufacturing, NPR reported that 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 “welcome news for American importers, the United States economy, and the rule of law,” per CBS News, while noting that the government must refund the tariff duties it “illegally collected.”

The Bottom Line

Today’s 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 “the most important of the authorities proposed to be conferred upon the Union.” The Federalist No. 33. The Court’s 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.

This ruling does not end the tariff era. Kavanaugh’s 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’s 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.