US Supreme Court declares US tariffs illegal
US President Trump exceeded his powers regarding global tariffs. This is the conclusion of the US Supreme Court.
Donald Trump during a visit to a shipyard in Wisconsin in 2020
(Image: White House)
The US government under President Donald Trump suffers a setback before the Supreme Court of the United States (SCOTUS). By a vote of 6 to 3, the country's highest judges declared the current tariff policy illegal.
The SCOTUS dealt with whether the US government is allowed to impose punitive tariffs based on a 1977 emergency law (International Emergency Economic Powers Act, IEEPA). The Court decided by majority that this law does not provide for tariffs and that Trump therefore exceeded his powers. The law provides for controls and steering by rules, but not for taxation, argue the judges. Taxation is the responsibility of the US Congress, which the US government has completely bypassed with the emergency law.
At the beginning of 2025, the US government declared two national emergencies and based its tariff policy on them, later with additional duties of sometimes over 100 percent. On the one hand, Trump cited drug smuggling from Canada, Mexico, and China, and on the other hand, trade deficits that would harm the USA.
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No deadline for end of tariffs yet
The SCOTUS itself does not set a deadline by which the US government must lift the illegal tariffs. This is likely to be handled by the Customs and Border Protection (CBP) in the coming weeks. It will then also be decided whether tariffs already paid must be refunded.
The US government could use other laws for tariffs, which, however, have significantly stricter framework conditions. These include limited amounts and defined periods. In his first term (2017-2021), Trump used, for example, the Trade Act of 1974, which allows 15 percent tariffs for a maximum of 150 days. Extensions are only possible through Congress.
With the end of the current tariff policy, a financial house of cards could collapse in the USA. The government used the emergency law, for example, to indirectly tax AI accelerators from AMD and Nvidia intended for China. The detour was already necessary because such an official tax would be illegal. Hardware could become cheaper again in the USA overall.
(mma)
