The U.S. Supreme Court struck down U.S. President Donald Trump’s expansive and unprecedented use of Carter-era legislation to levy tariffs on the whole world, dealing a significant if not fatal blow to the Trump administration’s signature economic policy.

Like lower courts did previously, the Supreme Court found that the 1977 International Emergency Economic Powers Act (IEEPA) does not grant the executive branch the authority to arrogate the powers of taxation from Congress, a notion enshrined in the Constitution. The court noted, as several justices had in oral arguments last fall, that the IEEPA never mentions the word “tariffs,” unlike all the other bills that Congress has passed in the last 90 years delegating limited tariff-setting authority to the legislative branch.

The U.S. Supreme Court struck down U.S. President Donald Trump’s expansive and unprecedented use of Carter-era legislation to levy tariffs on the whole world, dealing a significant if not fatal blow to the Trump administration’s signature economic policy.

Like lower courts did previously, the Supreme Court found that the 1977 International Emergency Economic Powers Act (IEEPA) does not grant the executive branch the authority to arrogate the powers of taxation from Congress, a notion enshrined in the Constitution. The court noted, as several justices had in oral arguments last fall, that the IEEPA never mentions the word “tariffs,” unlike all the other bills that Congress has passed in the last 90 years delegating limited tariff-setting authority to the legislative branch.

“We claim no special competence in matters of economics or foreign affairs,” Chief Justice John Roberts wrote in the court’s 6-3 opinion. “We claim only, as we must, the limited role assigned to us by Article III of the Constitution. Fulfilling that role, we hold that IEEPA does not authorize the President to impose tariffs.” (Justices Samuel Alito, Clarence Thomas, and Brett Kavanaugh dissented.)

“I was not expecting the court to definitely rule that the government could not use IEEPA for tariffs,” said Ryan Majerus, a trade lawyer at King & Spalding in Washington. “It’s a significant decision by the court. They laid down a marker.”

Trump greeted the court’s decision with a resounding condemnation, saying in a press conference on Friday afternoon that it was “deeply disappointing” and that he was “deeply ashamed at certain members of the court for not doing what is right.” He called the six concurring justices, who include Trump appointees Amy Coney Barrett and Neil Gorsuch, a “disgrace to our nation.”

What the ruling does not resolve is the multibillion-dollar question of refunds for what are now unlawful tariffs. The IEEPA tariffs were used against Canada, Mexico, and nearly every other country in the world as part of duties imposed  last spring. Estimates of the amount that firms could seek in refunds range from between $130 billion to $175 billion or so.

“Refunds of billions of dollars would have significant consequences for the U.S. Treasury,” wrote Kavanaugh in a dissent. “But that process is likely to be a ‘mess.’” He also noted the potentially negative impact of the ruling on the trade “deals” that the Trump administration struck with a number of countries, saying, “The Court’s decision could generate uncertainty regarding various trade agreements.”

The thumping judicial rebuke of Trump’s big tariff policies does not mean his protectionism is dead; there are still several legal and congressionally delegated authorities that the White House can use to levy tariffs, as it has before in other circumstances. But those authorities, ranging from powers granted in the 1930s to the 1970s, are more limited in both the scope and the duration of the tariffs, and they require prior investigation before implementation.

They are also a suboptimal alternative for a president who likes to use tariffs as a negotiating tool or means of coercion. Majerus expects the administration to turn to a pair of tried-and-tested authorities, Sections 122 and 301 of the 1974 Trade Act. Those allow for country-level tariffs and were crafted specifically by Congress to address the kinds of uncertainties that have arisen during the IEEPA debate.

Another measure that could gain increased prominence is Section 232 of the 1962 Trade Expansion Act, which allows the president to levy tariffs for national security reasons. That is what Trump has used for duties on steel, aluminum, copper, lumber, and kitchen furniture.

“Each of these different laws, they all have their own unique limitations. Section 232 is probably the broadest, but it is not like IEEPA or an executive order and the ability to put on tariffs the next day,” said Katie Hilferty, a trade lawyer at the law firm Morgan Lewis.

Trump embraced the opportunity to use alternative authorities to continue his trade war. “I can even charge more,” he said at the Friday press conference. He also hinted, in an echo of the government’s argument before the court, that the executive branch can “sanction or destroy” any other economy under IEEPA, even if it cannot levy tariffs.

Trump said that he would sign an executive order on Friday to add 10 percent global tariffs under Section 122 and will initiate further Section 301 investigations. “In the end, I think we’ll take in more money than we did before,” he said.

The widely anticipated ruling, which comes just days before Trump’s State of the Union address next week, where the Supreme Court justices will be in attendance, hews closely to the oral arguments made last November. The majority of justices rejected the government’s claim that the broad language of the IEEPA authorizes tariffs and underscored the risks of permanently stripping constitutional powers from a co-equal branch of government.

“Article I, Section 8, of the Constitution sets forth the powers of the Legislative Branch. The first Clause of that provision specifies that the Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises.’ It is no accident that this power appears first,” the court wrote, fulminating the government’s argument that the executive branch can use its power to invoke national emergencies as a way to sidestep the workings of government.

The court specifically took aim at the government’s argument that the statutory ability to regulate imports gives the president unprecedented power to reshape the entire global economy with arbitrary taxes that distort supply chains and have ripple effects across the world. “Based on two words separated by 16 others in Section 1702(a)(1)(B) of IEEPA—‘regulate’ and ‘importation’—the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time. Those words cannot bear such weight,” the court ruled.

While Trump’s trade wars will continue in another guise, and the refund battle will play out in the weeks and months to come, what is worth noting is that the most protectionist administration in nearly a century has failed at its stated objective—rebalancing trade. (It is also worth reiterating, as economists have since before the United States was founded, that tariffs are a tax on the country that implements them, as the Federal Reserve just documented.) The U.S. goods trade deficit soared to record levels in 2025, despite Trump’s avalanche of tariffs that disrupted business small and large and acted as a drag on economic growth.