Why did the U.S. Supreme Court reject Trump’s tariffs? | Explained

The Supreme Court of the United States held that the International Emergency Economic Powers Act (IEEPA) does not authorise the President to impose tariffs, striking down the sweeping tariffs imposed by Donald Trump in 2025. The court ruled that tariffs fall under Congress’s power to lay and collect taxes and regulate trade with foreign countries, and that the President must identify clear congressional authorisation to impose them.

The story so far:

On February 20, the U.S. Supreme Court delivered a decision that could reshape the legal boundaries of presidential trade power. The court held that the International Emergency Economic Powers Act (IEEPA), which U.S. President Donald Trump relied on, does not authorise a President to impose tariffs. It struck down the sweeping reciprocal and drug-trafficking-related tariffs imposed by Mr. Trump in 2025, calling them unconstitutional.

So far, Mr. Trump has used the IEEPA, a 1977 law that allows the President to regulate certain economic transactions after declaring a national emergency to address an “unusual and extraordinary threat” originating outside the country.

IEEPA emerged out of the Trading with the Enemy Act, which was passed in 1917 when the U.S. entered the First World War, to regulate trade with enemy nations. It has been used to freeze foreign assets held in American banks, block financial transfers, and impose sanctions on hostile governments and terrorist groups. However, before 2025, it was never used to impose tariffs.

After returning to office for his second term, Mr. Trump declared national emergencies tied to drug trafficking from Latin American countries and trade imbalances. His administration imposed 25% tariffs on most goods from its neighbours, Canada and Mexico, 10% tariffs on most goods from China, and a separate reciprocal tariff programme imposing at least a 10% duty on imports from virtually all trading partners. Some countries, including India, were hit with even higher rates.

The U.S. Constitution gives Congress the power “to lay and collect taxes, duties, imposts and excises.” Congress also has the power to regulate trade with foreign countries, and tariffs fall squarely within that authority.