US Supreme Court rules against Trump's tariffs, raising questions for trade policy

• Chief Justice Roberts wrote that while IEEPA allows presidential action in economic emergencies, it does not authorize tariffs specifically, invalidating those implemented under this statute
• Approximately $133.5-$175 billion in tariff revenue is potentially affected, with Wedbush noting this creates 'financial relief for many companies' and greater supply chain visibility, particularly benefiting tech and AI sectors
• US stocks rallied on the news with the Nasdaq up 0.8%, S&P 500 up 0.4%, and Dow up 0.1%, reversing earlier losses from weak Q4 growth and higher inflation data

Summary

The US Supreme Court ruled 6-3 that former President Donald Trump exceeded his authority by imposing broad tariffs on Canada, Mexico, and other nations under emergency powers. The decision in *Learning Resources, Inc. v. Trump* struck down tariffs implemented using the International Emergency Economic Powers Act (IEEPA), which Trump had invoked citing national emergencies including fentanyl trafficking and trade deficits.

Chief Justice John Roberts determined that while IEEPA permits presidential action during economic emergencies, it does not authorize tariff imposition. The ruling specifically invalidates IEEPA-based tariffs but leaves other Trump-era tariffs unaffected.

Financial Impact:

Approximately $133.5 billion in tariff revenue is potentially affected, with estimates suggesting up to $175 billion in refunds. Wedbush analysts noted the decision provides "financial relief for many companies" and improves "supply chain visibility, especially coming from the Asia supply chain."

Market Reaction:

US equities rallied following the announcement despite earlier weakness from disappointing Q4 growth and elevated PCE inflation data. By midday, the Nasdaq gained 0.8%, the S&P 500 rose 0.4%, and the Dow Jones advanced 0.1%.

Alternative Options:

Wedbush emphasized that alternative tariff mechanisms remain available, including Section 232, Section 301, and Section 122 authorities.

Broader Context:

The ruling comes as businesses have already adjusted operations to navigate complex tariff landscapes. Analysts view the decision as particularly positive for the technology sector and AI trade. Meanwhile, oil prices climbed to six-month highs amid US-Iran tensions, and the dollar reached a one-month peak on safe-haven demand.