In a 6–3 decision, the conservative-majority court held that the International Emergency Economic Powers Act (IEEPA) does not authorise a president to impose tariffs. The justices said that if Congress had intended to grant such “distinct and extraordinary power,” it would have done so explicitly, as it has in other tariff laws.

Trump had relied heavily on tariffs as leverage in trade negotiations. Upon returning to office last year, he invoked emergency economic powers to introduce broad “reciprocal” duties on nearly all US trading partners, citing unfair trade practices. Separate tariffs were also imposed on Mexico, Canada and China, linked to concerns over illicit drug flows and immigration.

The court’s ruling does not affect sector-specific tariffs previously placed on imports such as steel and aluminium. Several investigations remain ongoing, potentially paving the way for more targeted duties in the future.

The three liberal justices joined three conservatives in upholding earlier lower court decisions that had found the IEEPA-based tariffs unlawful. Conservative Justices Brett Kavanaugh, Clarence Thomas and Samuel Alito dissented.

Chief Justice John Roberts, delivering the opinion, emphasised that the emergency economic powers statute “contains no reference to tariffs or duties.”

A lower trade court had ruled in May that Trump overstepped his authority with across-the-board levies and blocked most of them. That ruling had been temporarily paused while the government pursued an appeal.

Economists say the decision could significantly reduce average US tariff rates. Gregory Daco, chief economist at EY-Parthenon, estimated ahead of the ruling that average tariffs could fall from 16.8 percent to around 9.5 percent. However, he cautioned that the reprieve might be temporary if alternative legal avenues are used to reintroduce broad trade measures.

The judgment could also impact federal revenue, with estimates suggesting potential losses of $100 billion to $120 billion. The justices did not directly address whether importers would receive refunds, though concerns were raised that the process could prove complicated.

The ruling narrows the scope of presidential emergency powers in trade policy and marks a significant moment in the ongoing debate over executive authority and global commerce.