Supreme Court Limits Presidential Authority on Tariffs

What happened: The U.S. Supreme Court Feb. 20 ruled that the Trump administration may not rely on the International Emergency Economic Powers Act (IEEPA) to impose tariffs. The suit, Learning Resources, Inc. v. Trump, was brought by affected businesses and states who argued the law does not grant the President authority to take this action. The Court emphasized that Congress, not the President, holds the authority to impose duties and tariffs.

Why it matters: The Court’s decision reinforces Congress’s primary role over tariffs and may potentially reduce uncertainty around the issuance of sweeping emergency tariffs that can affect materials costs and supply chains. The IEEPA tariffs at issue were country-specific, rather than sector-specific, making them particularly broad in scope. Estimates suggest they accounted for at least 70 percent of recent U.S. tariff revenues. Sectoral and commodity-specific tariffs issued under other authorities, such as for steel and aluminum, remain in place.

What’s next: Following the Court’s ruling, tariffs issued under IEEPA must cease, although implementation may not be immediate. The administration is also expected to attempt reissuing IEEPA-like tariffs under other laws. Josh Hurwitz and Prianka Sharma are the contacts.