U.S. Supreme Court rules president doesn’t have tariff authority excluding auto parts
The U.S. Supreme Court has ruled that the president lacks the authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA); however, the tariffs on auto parts remain in effect.
The ruling affirmed a lower court decision that invalidated two sets of IEEPA tariffs: one on imports from Canada, Mexico, and the People’s Republic of China (PRC) based on declared emergencies concerning illicit drugs, and another set of tariffs on most other U.S. imports based on a declared emergency concerning the U.S. trade deficit.
The court concluded that “when Congress addresses both the power to regulate and the power to tax, it does so separately and expressly.”
“Justice Kagan, in concurrence, wrote that it was unnecessary to invoke ‘the so-called major-questions doctrine’ because she thought ‘the ordinary tools of statutory interpretation amply support’ the court’s decision,” states a Congressional summary of the ruling. “She reasoned, for example, that ‘the meaning of ‘regulate,’ both in common parlance and as Congress uses the word, does not encompass taxing.’ In addition, Justice Kagan emphasized that none of IEEPA’s several other authorities permits the President to raise revenue. She also pointed to ‘Congress’s consistent practice in delegating tariff power’ via statutes that specifically refer to tariffs and set limits on the president’s discretion, unlike IEEPA.”
It adds that Justice Kavanaugh, in dissent, argued that “‘[s]tatutory text, history, and precedent’ showed that tariffs may be used to ‘regulate… importation’ under IEEPA.”
“He opined that tariffs fall within the plain meaning of ‘regulate,’ as they can be a means to ‘control’ imports, ‘adjust [imports] by rule,’ or ‘subject [imports] to governing principles or laws,'” the summary states.
The court’s ruling doesn’t address tariffs the president may impose under other statutory authorities, including Section 232 of the Trade Expansion Act of 1962, which applies to automotive parts, steel, and aluminum, and Section 301 of the Trade Act of 1974.
Following the decision, President Donald Trump signed an executive order imposing a temporary global tariff under Section 122 of the Trade Act of 1974. For 150 days, a 10% ad valorem import duty will be imposed on articles imported into the U.S.
The administration initially announced a 10% rate, then increased it to 15%.
United Press International reports that the Federal Reserve Bank of New York stated earlier this month that U.S. entities and consumers paid 94% of the tariffs imposed by Trump last year during the first eight months of 2025.
“U.S. Customs and Border Protection reported in December that it had collected $200 billion in tariff revenue,” the article states. “The largest portion of tariffs collected was on imports from China, a report by the Federal Reserve Bank of Richmond said. The report is based on data from the U.S. Treasury Department and the Census Bureau.
“It remains unclear what will happen to the revenue the court ruled has been unlawfully collected. The Supreme Court did not address refunds for tariffs paid.”
Images
Featured image credit: wildpixel/iStock