The US Supreme Court ruled on Friday that President Donald Trump’s reciprocal tariffs imposed on several nations last year are unlawful, as they were outside of the executive’s authority.
The ruling was approved by a 6-3 majority.
The court’s opinion held that the 1979 International Emergency Economic Powers Act (IEEPA), on which these duties were based, does not give Trump “the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time.”
However, the scenario for the 25% tariff on auto parts and vehicles is not set to change, as the duty was based on Section 232 of the Trade Expansion Act of 1962.
IEEPA
The US Constitution gives the power to impose taxes and duties to Congress and not to the executive branch, as the Supreme Court’s Chief Justice John Roberts pointed out.
According to the government, tariffs were imposed on the IEEPA statute as it gives the president wider authority to take immediate action after declaring a national emergency.
The mechanism was designed to allow for Presidents to freeze assets and restrict financial transactions in true emergencies.
Congress cannot approve or disapprove the measures beforehand, but it has formally requested the White House to use it against Russia or China before, in tougher international scenarios.
According to the Congress’s website, and as of September 2025, US Presidents have declared 77 national emergencies invoking IEEPA, “46 of which are ongoing.”
“National emergencies invoking IEEPA often last nearly a decade, although some have lasted significantly longer,” the institution says, exemplifying with a response to hostages taken by Iran in 1979, which is “currently in its fifth decade.”
Case in Court
However, the IEEPA has never been used before to justify imposing duties of this matter.
The President justified these tariffs over persistent US trade deficits, which several parties have since challenged in court.
The parties are challenging two sets of tariffs: first, they oppose the reciprocal tariffs imposed last April by the Trump Administration.
Second, they are contesting the legality of extra tariffs imposed on Chinese, Mexican, and Canadian goods under the same act, in response to a national emergency declared over illegal fentanyl entering the US.
Besides the Supreme Court, over 1,800 tariff-related suits have been filed with the US Court of International Trade since April — compared with less than two dozen such cases in all of 2024.
Section 232
With Section 232 of the Trade Expansion Act of 1962, the President can act for national security reasons, after a Department of Commerce investigation.
Congress does not need to formally approve these measures, but it can pass laws to stop or block them after they are imposed.
The 25% tariff for imported vehicles and auto parts, also imposed last April, was based on this act.
The rates apply to all imports except for parts from Canada and Mexico that comply with the USMCA — although the agreement’s renewal later this year has not been granted — and imports covered by trade deals with the EU, Japan, and South Korea.
The 25% duty relies largely on a study from Trump’s first term, which claimed the tariffs were necessary to protect national security.
As of Friday, the tariff remains in effect, since its legality under the Trade Expansion Act has not been challenged.
The Supreme Court’s ruling on IEEPA-based tariffs could provide relief to automakers, who are expected to face near to $1 billion in costs for raw materials and machinery imports, according to CBT News.
Ruling Reactions
According to Penn-Wharton Budget Model economists cited by Reuters, businesses can now decide if they will pursue refunds of collected US tariffs, which could total over $175 billion.
Business owners are still concerned, however, because even though the court ruling blocks the IEEPA-based approach, the Trump Administration is expected to find other ways to impose the tariffs.
Bloomberg reporter Isabel Gottlieb noted that there are “at least five fallback options,” although each is more limited and comes with several procedural restrictions.
US President Donald Trump reacted to the Court’s ruling a few hours later.
In a press briefing at the White House, the President stated that the Supreme Court has been “swayed” by foreign countries that are “dancing in the streets, but they won’t be dancing for long.”
The President called the justices of the Supreme Court who voted in favor of the ruling “a disgrace to our country.”
“They’re very unpatriotic and disloyal to our Constitution,” the President said, adding that “the court has been swayed by foreign interests and a political movement that is far smaller than people would ever think.”
Saying that the decision has allowed the Administration to opt for other measures, Trump said “tariffs will remain.”
“The good news is that there are methods, practices, statutes, and authorities, as recognized by the entire court in this terrible decision, and also as recognized by Congress, which they refer to, that are even stronger than the IEEPA tariffs available to me as President of the United States,” he stated.
The President exemplified this with the Trade Expansion Act of 1962 (Section 232), the Trade Act of 1974 (Sections 122, 201 and 301), and the Tariff Act of 1930 (Section 338).
He said the decision made the President’s ability to impose tariffs “more powerful and clearer.”
As such, effective immediately, Trump imposed a 10% “global tariff” on top of existing US levies, using section 122 of the Trade Act of 1974, which allows the President to set import restrictions temporarily for up to six months.
