US Supreme Court strikes down most of Trump’s tariffs

The conservative-majority U.S. Supreme Court has decided to overturn the so-called “reciprocal” tariffs that President Donald Trump indiscriminately imposed on more than a 100 countries. The 170-page ruling threatens the U.S. government with the obligation to return tens of billions of dollars in unconstitutionally collected taxes. It is not entirely clear how this refund could be made, nor the final scope of the ruling, but there is no doubt it is of enormous significance.

The Supreme Court’s decision does not affect all trade tariffs imposed by the Trump administration. It addresses only the so-called reciprocal tariffs, most of which target trading partners, and others aimed at China, Canada, and Mexico. These are the tariffs Trump enacted by invoking the 1977 International Emergency Economic Powers Act (IEEPA). There are other specific trade tariffs, such as those on aluminum and automobiles, that are not affected by this decision. The court considers that Trump is making widespread use of the emergency powers considered under the law and is therefore abusing it.

The majority opinion is signed by Chief Justice John Roberts and has the expected support of liberals Ketanji Brown Jackson, Elena Kagan, and Sonia Sotomayor, as well as conservative justices Neil Gorsuch and Amy Coney Barrett. Gorsuch, appointed by Trump during his first term, already expressed skepticism about the Republican’s tariffs during the oral hearing in November. This result (6-3) is common in the current Supreme Court, with a conservative supermajority that hasn’t been seen since the 1930s, but it usually serves to leave the three liberal judges in the minority.

The Supreme Court has shown a strong tendency to agree with Trump in his sustained strategy of expanding executive power, which this ruling contradicts. The news comes four days before the State of the Union address, the first to be given by the U.S. president since his return to power. Friday’s setback will undoubtedly influence the drafting of that text, after weeks in which the Republican has directly and indirectly pressured the Supreme Court justices to rule in his favor.

There are two dissenting opinions: that of Clarence Thomas, the most senior and most right-wing of the judges, and that of Brett Kavanaugh, one of the three justices appointed by Trump in his first term.

In the latter, 63-page document, Kavanaugh anticipates that this ruling will spell “disaster” for the U.S. economy. “The interim effects of the Court’s decision could be substantial. The United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others,“ Kavanaugh writes. ”As was acknowledged at oral argument, the refund process is likely to be a ‘mess.’”

U.S. Trade Representative Jamieson Greer said a few weeks ago that if the Supreme Court rules against the tariffs, the administration would “start the next day” to reinstate them “to respond to the problems the president has identified.”

Previous skepticism

The decision, which deals a fatal blow to Trump’s economic agenda, comes three months after the Supreme Court hearing to examine the legality of the trade tariffs. The judges heard arguments from both sides on the president’s authority to invoke the IEEPA in designing his tariff policy. During that hearing, which lasted more than two hours, the justices’ skepticism about its legality came to light.

The IEEPA was passed nearly half a century ago by Jimmy Carter to limit presidential power in foreign economic matters after Richard Nixon’s attempts to bypass executive limits.

The White House had already contemplated the possibility of a Supreme Court setback and said it would resort to other legal means to maintain the tariffs. The government had considered at least five alternative ways to maintain or reapprove the tariffs.

Although the ruling does not expressly mention it, the Supreme Court decision poses a huge threat to the Trump administration due to the taxes that were improperly collected. Economists at Penn-Wharton Budget Model estimate that the White House could face refunds of $175 billion, according to calculations made for Reuters.

The ruling resolves two lawsuits filed by an Illinois toy company and a…