Trump overstepped executive power by imposing tariffs, supreme court rules

• The court rejected the administration's argument that tariffs were 'regulatory' rather than revenue-raising, with Justice Sotomayor stating 'that's exactly what they are' when referring to tariffs as taxes
• Chief Justice John Roberts, a Trump appointee, expressed skepticism, noting that 'the imposition of taxes on Americans has always been a core power of Congress'
• Trump had claimed the ruling would be the 'difference between going bankrupt and thriving' for the US, while economists have warned the tariffs risk raising prices for Americans after years of high inflation

Summary

Key Ruling: The U.S. Supreme Court ruled 6-3 that President Trump overstepped executive authority by imposing tariffs on global imports, determining that the 1977 International Emergency Economic Powers Act (IEEPA) did not provide legal justification for the measures.

Legal Challenge: The Constitution grants Congress sole authority to levy taxes. Trump argued IEEPA granted presidential power to impose tariffs during national emergencies. The administration claimed these were "regulatory tariffs" with revenue generation being merely "incidental," despite Trump's previous assertions they would raise trillions for federal coffers.

Court Response: Justices across the ideological spectrum expressed skepticism. Liberal Justice Sonia Sotomayor stated tariffs are "exactly" taxes, while Chief Justice John Roberts noted that "imposition of taxes on Americans...has always been a core power of Congress."

Market Implications: This ruling dismantles a key pillar of Trump's economic agenda. The president had positioned tariffs as crucial to filling federal coffers, revitalizing industrial heartlands, and rebalancing global trade. However, economists warned the tariffs risked raising consumer prices following years of elevated inflation.

Broader Context: Trump characterized the decision as having seismic consequences, suggesting it represented "the difference between going bankrupt and thriving" for the U.S. The ruling occurred against a backdrop of slowed Q4 2025 economic growth amid government shutdown concerns.

Impact: The decision significantly constrains presidential authority on trade policy, requiring congressional approval for future tariff implementation and potentially reshaping the administration's economic strategy.