Supreme Court Makes Ruling on Tariffs

In the most recent Supreme Court trade tariff case, the Court ruled that the President cannot use the International Emergency Economic Powers Act (IEEPA) to impose tariffs (import taxes) unilaterally. IEEPA allows a President, during a declared national emergency, to “regulate”imports. President Trump argued that this authority let him impose broad tariffs to address illegal drug flows and trade deficits. The Court rejected that view. Tariffs are essentially taxes that raise revenue, and the Constitution assigns taxing and tariff power to Congress, not the President. While IEEPA authorizes strong emergency actions—such as blocking or restricting imports—it does not mention tariffs, duties, or taxes, and the Court said “regulate” does not automatically mean “tax.”

What does this mean for producers? It is not entirely clear at the moment. The court did not instruct the administration on what to do with the funds already collected but,one thing we do know is that this only removes one lever for the President to impose tariffs.

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