The US Supreme Court has delivered a landmark 6-3 ruling that curtails the President's authority to impose broad import tariffs under the International Emergency Economic Powers Act (IEEPA) of 1977. 

Chief Justice John Roberts authored the majority opinion, which explicitly states that IEEPA does not empower the executive to levy duties on goods from nearly all major US trading partners.

Justice Brett Kavanaugh, joined by Justices Clarence Thomas and Samuel Alito in dissent, warned of immediate and substantial fallout from the decision. He highlighted that the United States might now face demands to refund billions of dollars to importers who had paid the contested IEEPA tariffs.

This could prove particularly contentious, as many importers have already passed those costs on to consumers or downstream businesses.

Kavanaugh's dissent underscores the practical disruptions this ruling could unleash. Refunds would not simply reverse financial flows; they might trigger a cascade of claims, legal battles, and economic recalibrations across supply chains. Importers, having absorbed or redistributed the tariff burdens, could seek restitution even from parties far removed from the original transactions.

The majority opinion, penned by Roberts, leaves no ambiguity on IEEPA's scope. It notes that the Act's language—authorising the President to "regulate... importation"—makes no mention of tariffs or duties. Roberts points out that no prior administration has interpreted IEEPA as conferring taxation powers, and the government cited no precedent where "regulate" equated to imposing levies.

This interpretation aligns with the Court's self-described "limited role" under Article III of the Constitution. Roberts emphasised that the judiciary claims no expertise in economics or foreign policy but must enforce statutory boundaries. The ruling thus reins in unilateral executive action, prioritising congressional intent over expansive presidential readings of emergency powers.

Kavanaugh counters by cataloguing existing statutes that explicitly grant the President wide tariff latitude. He cites the Trade Expansion Act of 1962 (Section 232), which allows duties for national security reasons; the Trade Act of 1974 (Sections 122, 201, and 301), covering balance-of-payments issues, safeguard measures, and unfair trade practices; and the Tariff Act of 1930 (Section 338), permitting discrimination against discriminatory countries.

Crucially, neither the plaintiffs nor the majority alleged these laws violate separation of powers principles. Kavanaugh argues this preserves presidential flexibility through alternative channels, rendering the IEEPA-specific block overly narrow. The dissent implies the ruling disrupts ongoing trade strategies without fully dismantling executive tariff tools.

The tariffs in question stemmed from Trump's aggressive trade policies, targeting imports amid claims of economic emergencies like trade imbalances and national security threats. Imposed on goods from China, Europe, and others, they generated revenue but inflamed global tensions and raised US consumer prices. The Court's decision invalidates their IEEPA foundation, potentially exposing the Treasury to massive liabilities.

The refund implications loom large. Billions collected—estimates from prior analyses suggest upwards of $80 billion across Trump's terms—could return to importers, many of whom are multinational firms. This might lower retail prices if costs unwind, but litigation over pass-through expenses could drag on for years, complicating fiscal planning.

Politically, the verdict arrives amid Trump's ongoing influence in Republican circles, even post-presidency. It limits future administrations' ability to wield IEEPA as a tariff hammer, shifting reliance to Congress-approved mechanisms. Dissenters like Kavanaugh signal that these remain robust, potentially paving the way for new tariff actions under different legal banners.

Broader trade ramifications extend to US allies and adversaries alike. Partners hit by the duties may pursue their own retaliatory measures or WTO challenges anew, while domestic industries shielded by tariffs—steel, aluminium, manufacturing—face renewed import competition. The ruling reinforces congressional primacy in trade, echoing historical delegations now under judicial scrutiny.

For importers, the decision offers vindication but practical headaches. Proving eligibility for refunds, navigating pass-on disputes, and complying with Treasury processes will test administrative capacities. Kavanaugh's note frames this as an "interim effect," suggesting appeals or legislative fixes could mitigate long-term damage.

The 6-3 split reflects ideological lines, with conservative justices Roberts joining the liberal bloc in the majority—a rare alignment on executive power. This underscores growing judicial wariness of post-9/11 emergency expansions, from surveillance to economic controls.

The ruling recalibrates the balance between branches, affirming that tariff authority demands clear congressional warrant. While Kavanaugh laments the fiscal sting, the majority prioritises textual fidelity, leaving Trump's tariff legacy—and successors' strategies—in legislative hands.

ANI