The Supreme Court on Friday delivered a sweeping rebuke to President Donald Trump’s use of emergency powers to impose broad tariffs, ruling that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to levy duties on foreign imports.

The 6–3 decision throws the future of Trump’s trade agenda into turmoil and opens the door to potentially massive refunds – totaling tens of billions of dollars – to businesses that paid the now-invalidated tariffs.

Chief Justice John Roberts authored the majority opinion, joined by Justices Amy Coney Barrett, Neil Gorsuch, Ketanji Brown Jackson, Elena Kagan and Sonia Sotomayor. The ruling marks a rare coalition of conservative and liberal justices united in sharply limiting executive authority.

Roberts wrote that the IEEPA contains a “lengthy list of powers” granted to the president in national emergencies, but pointedly excludes any reference to tariffs or duties. That absence, he argued, is decisive.

“It stands to reason that 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,” Roberts wrote. “He cannot.”

Trump ripped into the Supreme Court after ruling that his tariffs were not authorized. “The Supreme Court’s ruling on tariffs is deeply disappointing, and I’m ashamed of certain members of the court – absolutely ashamed – for not having the courage to do what’s right for our country,” Trump said in broadcast remarks.

“Democrats on the court are thrilled, but they will automatically vote no… they’re against anything that makes America, strong, healthy, and Great Again.

“They also are a, frankly, disgrace to our nation.”

The ruling invalidates an array of Trump-imposed levies, including:

A 10% baseline tariff applied to all U.S. trading partners on “Liberation Day” in April 2025

Additional duties of 10%, 25% and 35% on imports from China, Mexico and Canada, tied to fentanyl trafficking concerns.

A 25% tariff on nations importing oil from Venezuela.

A 25% tariff on India for its purchases of Russian petroleum.

A 40% tariff on selected products from Brazil.

As of mid-December 2025, IEEPA-based tariffs had generated $133 billion of the roughly $251 billion in tariff revenue collected across fiscal years 2025 and 2026, according to U.S. Customs and Border Protection. The ruling does not stipulate whether those funds must be returned, and the majority opinion remains silent on the issue.

In dissent, Justice Brett Kavanaugh warned that the refund process is likely to be a “mess,” and said the decision could destabilize trade arrangements negotiated under pressure from the tariffs.

Trump’s team had prepared for a loss. The White House previously signaled it could turn to other legal authorities – including Section 232 of the Trade Expansion Act of 1962 and Sections 201 and 301 of the Trade Act of 1974 – though these mechanisms are narrower, more procedurally burdensome and sometimes time-limited.

The president has also floated rebranding his tariff system as a licensing fee regime, though experts say that too would face significant hurdles.

During oral arguments last fall, several conservative justices expressed deep skepticism of Trump’s approach. Gorsuch warned that granting such authority would become a “one-way ratchet toward the… continual accretion of power in the executive branch.”

The ruling invokes the major questions doctrine, emphasizing that programs of far-reaching economic impact must be explicitly authorized by Congress.

The decision is already reshaping international expectations. European officials, who had been preparing for Trump to swiftly reinstate tariffs using alternate laws, are now reassessing a July 2025 trade agreement awaiting ratification.

“Our basic assumption that President Trump could use another legal basis has to be confronted with the new contextual elements,” a European official said, noting the ruling’s implications for future negotiations.

EU policymakers are now modeling scenarios that assume the U.S. may have far fewer tariff tools available; potentially weakening Washington’s leverage.

Democrats, meanwhile, are celebrating the ruling as they head into a high-stakes election year. With inflation and household costs dominating voter concerns, party strategists see a fresh opening to tie Republicans to unpopular price hikes tied to tariffs.

“This decision from SCOTUS will NOT save vulnerable House Republicans,” the House Majority PAC said. “They voted multiple times to enable Trump’s tariffs which have raised prices across the board.”

House Democratic leaders suggest the decision could force Republicans into a politically perilous vote if Trump presses Congress for new tariff authority.

The midterm election cycle begins in earnest next month, with control of both chambers of Congress up for grabs.

Trump has warned repeatedly that invalidating the tariffs could require the U.S. government to issue enormous refunds – “many Hundreds of Billions of Dollars,” he claimed last month – and trigger collateral compensation claims from companies that made costly investments to avoid duties. When those investments are accounted for, he argued, the total could reach “Trillions.”

The court’s ruling does not address those assertions. But with so much money collected under an authority now deemed invalid, political, diplomatic and financial turmoil is likely to continue unfolding for months.

No president before Trump attempted to use IEEPA to impose tariffs. The only historical parallel came in 1971, when Richard Nixon invoked a precursor statute to impose a temporary 10% tariff on most imports.

Analysts say U.S. households may see meaningful savings this year; though the president’s pledge to mail out $2,000 “tariff dividend” checks looks increasingly unlikely.

Before Friday’s ruling, the average U.S. household faced an estimated $1,300 to $1,700 in added annual costs due to an average tariff rate of 16.9%, according to Yale’s Budget Lab.

But with the court invalidating the IEEPA-based duties, the expected burden may fall by roughly half.John Ricco, associate director of policy analysis at the Budget Lab, told CNBC that households could now save approximately $600 to $800 in 2026; a projected boost for consumers amid continued inflation concerns.

The precise amount remains contested. Some experts believe the earlier cost projections were low to begin with.Trump’s promise to send Americans $2,000 “rebate” checks tied to tariff revenues now appears at risk. With the IEEPA duties struck down – and no guarantee that alternative legal pathways will generate equivalent revenue – there may simply not be funds to sustain the proposed payout.

“I’m actually shocked that the number wasn’t a little higher,” Erik Rosica, a sales supervisor at OEC Group New York, speaking to The NY Post. Still, he agreed that removing the tariffs would likely cut the financial hit by about half.

Whether savings will fully reach consumers remains uncertain. Rosica warned that while companies might trim prices on lower-cost goods, many firms could feel pressured to maintain elevated prices amid volatile supply-chain costs.“Again, that’s only if people lower their prices,” he cautioned, adding that business incentives don’t always align with consumer relief.

Trump’s promise to send Americans $2,000 “rebate” checks tied to tariff revenues now appears at risk. With the IEEPA duties struck down – and no guarantee that alternative legal pathways will generate equivalent revenue – there may simply not be funds to sustain the proposed payout.

“The decision means there just won’t be funds to pay for the checks,” Rosica said, though he noted that unexpected policy maneuvers could still emerge, adding, “nothing’s off the table.”

As global markets absorb the shock and the White House searches for new options, one thing is clear: the Supreme Court has upended the legal foundation of Trump’s trade war, leaving a policy once touted as a “national security bonanza” on uncertain ground.