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Less than a year after President Donald Trump heralded “Liberation Day,” his dream of a new trade order has been all but snuffed out. The Supreme Court declared on Friday that the legal basis for Trump’s unilateral “emergency” tariffs was wholly unlawful and unconstitutional. The economic sanctions law he drew upon, 1977’s International Emergency Economic Powers Act, does not allow the president to unilaterally determine new charges on foreign goods—and the Constitution holds that Congress is the main arbiter of American trade. It’s tariff-ic news, you might say.
“This ruling is deeply disappointing, and I’m ashamed of certain members of the court,” Trump stated at an afternoon press conference. He also announced his next steps: a new executive order reimposing the 10 percent universal tariffs he’d declared last year, a recommitment to existing foreign taxes that were not levied via IEEPA, and a maximalist application of all laws and provisions that delegate any amount of trade regulation to the administration.
Naturally, there’s a lot of befuddlement over what this means for an already convoluted system. Which tariffs are dead? Will there be refunds, and could every American hit by the price hikes get a check?
Allow us to liberate you.
So, what tariffs just got struck down?
As of this SCOTUS ruling, all “emergency” tariffs that Trump levied during his second term, by invoking IEEPA, are nullified. If you recall, the president’s initial taxes on Canada, Mexico, and China were premised on the assumption that none of these nations were doing enough to stem the flow of fentanyl into the U.S. For the “reciprocal” tariffs drawn up last April, Trump’s even simpler justification for the “emergency” was that the U.S. is getting ripped off because of trade deficits (even though some of the countries that eventually earned the steepest rates, like Brazil, are actually sources of trade surpluses).
Trump often exploited IEEPA as his basis for new tariffs, so SCOTUS’ decision strikes directly at his economic agenda, even beyond the mere numbers. The funds hoarded from U.S. sales of Venezuelan oils—illegitimate. Last summer’s trade agreements with Japan and the United Kingdom—scrapped, at least on their current terms. A helluva lot of the duties on China—vanquished. The tax exemptions for already cheap imports like Temu products—back in action.
Does this mean my grocery bill goes back to normal?????
Not quite, unfortunately. In erratic fashion, Trump had already mandated that certain products be excluded from his steepest taxes, such as myriad agricultural goods (e.g., fruits and veggies, beef cuts, teas) and key electronics (e.g., generators, air conditioners). And there are plenty of tariffs that remain. For example, the Yale Budget Lab notes that the goods-specific tariffs Trump placed upon most imports of steel, aluminum, copper, wood, and cars will stay in effect, since they were implemented under a separate national security authority.
So don’t expect the costs of cars and furniture to go down. And don’t expect the economy to rear its head back up. Overall tariff rates will be much lower than they would be had SCOTUS not issued this ruling, but there are still some that aren’t going away. Trump threatened at the press conference to use “alternative” methods to revive his spurned tariffs, so this fight might not be over.
Are you kidding me right now?
Buddy, I wish.
How could he revive the tariffs?
In addition to the national security authority he’s already used, Trump has a lot of other tariff tools at his disposal, like Section 301 of the 1974 Trade Act, which he used in his first term to slap sweeping tariffs on China. He’s already reapplying it toward ongoing investigations into whether he will enact new penalties on Brazilian and Chinese goods.
More worryingly, Trump floated invoking other provisions no modern president has ever used. One, from the 1974 Trade Act, allows him to impose temporary tariffs up to 15 percent without a formal investigation. Another, dating back to 1930, permits presidential tariffs as high as 50 percent if the government determines foreign countries are “discriminating” against U.S. goods. He’s already used the first to reinstate the 10 percent universal tariff he brought up Friday—though that will expire after 150 days unless Congress reauthorizes. Still, while some Republicans have bristled at specific tariffs, there’s little sign they plan to rein him in.
But for now, those other tariffs are still nixed, right? Does that mean that I, the humble American taxpayer, can get a refund?
The Supreme Court did not address the whole reimbursement matter, but we already have a clue as to how the process is going to unfold—and it’s not going to be of much benefit for the people.
One thing worth remembering is that tariff revenue is paid not directly by other countries, but by our own importers. Customs and Border Protection estimates that American businesses of all sizes have paid a total of $170 billion to the Treasury under the IEEPA-specific tariffs—and that cash could come up for grabs by those corporations and small firms, albeit through a painstaking process.
According to Bloomberg, the U.S. Court of International Trade (the judicial body that oversaw the first legal battles against Trump’s tariffs) is set to hear up to 1,500 cases filed by businesses hoping for refunds on the import taxes they paid in. Even Trump recognized during the presser that this is going to take years. Unfortunately for you and me, it’s not likely to trickle down to us—unless you, dear reader, are a sentient business that has a robust crew of lawyers and has paid ample import duties over the past year.
So … once again, we get screwed.
The real liberation is the friends we’ve made along the way.
