The Supreme Court strikes down Trump's 'Liberation Day' tariffs

The Supreme Court on Friday struck down some of President Donald Trump's sweeping tariffs, dealing a significant blow to his second-term agenda.

In the 6-3 decision on "Learning Resources, Inc. v. Trump" issued Friday morning, the high court said the president does not have unilateral authority to impose import taxes. In the majority opinion from Chief Justice John Roberts, it was made clear that tariffs are another form of taxation. The power to tax, the opinion said, belongs to Congress as the legislative branch.

At issue were the so-called "Liberation Day" tariffs that Trump imposed last April, citing emergency authority drawn from the International Emergency Economic Powers Act, or IEEPA. The law had never been applied to collect import taxes before, and Trump's extraordinary application of its legal authorities generated multiple court challenges from scores of businesses that eventually came before the Supreme Court.

“It is also telling that in IEEPA’s half century of existence, no President has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope," the majority opinion said. "The President must 'point to clear congressional authorization' to justify his extraordinary assertion of that power. He cannot."

The U.S. government may still be obligated to issue refunds, but the Supreme Court punted on the matter for now. In the dissenting opinion from Supreme Court Justice Brett Kavanaugh, he acknowledged the chaotic situation that awaits the U.S. government if it is obligated to refund a swath of the tariffs it has collected.

"The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers," Kavanaugh wrote. "But that process is likely to be a 'mess.'"

About one-third of Trump's tariffs will remain in effect. The White House has also applied import taxes under separate legal authorities on lumber, furniture, steel, aluminum, and more. Trump administration officials also publicly stated their intention to pursue other unilateral powers to stand up the tariff regime if the Supreme Court struck it down.

During oral arguments in November, conservative and liberal justices alike expressed skepticism that IEEPA granted the president sweeping ability to impose tariffs at will.

For months, Trump kept up pressure on the Supreme Court to rule in his favor, arguing that anything but a supportive decision would deprive the U.S. of critical revenue to achieve his goals, such as shrinking the persistent trade deficit and securing new trade deals with foreign governments.

"Without tariffs … the whole country would be bankrupt,” the president said in a Thursday economic speech in Rome, Georgia. “And I have to wait for this decision! I’ve been waiting forever. And the language is clear: I have the right to do it as president.”

In the late 1990s, the U.S. government provided $750 million in tariff refunds to importers after the Supreme Court struck down a harbor maintenance tax which had been applied to thousands of companies. The scope of the refunds were much smaller then compared to what's in play now. It still took the federal government several years to return the smaller sum.

Customs and Border Protection said in December that it had collected $200 billion in tariff revenue since the start of Trump's second term. About $88 billion worth of import taxes collected through the end of October was done so under IEEPA, according to CBP data.