Supreme Court Rules Against Trump Tariffs

WASHINGTON, DC — The Supreme Court of the United States has ruled 6-3 that the President does not have the power to impose tariffs. The Court made its ruling in the case of Learning Resources, Inc. v. Trump, with Chief Justice John Roberts joined by Justices Sotomayor, Kagan, Gorsuch, Barrett and Jackson in the majority, while Justices Thomas, Kavanaugh, and Alito dissented.

President Trump declared a national emergency and then signed an executive order on February 1st, 2025, imposing tariffs on China, Mexico and Canada. Trump claimed this authority under the International Emergency Economic Powers Act (IEEPA). The Trump administration has since then declared (and at times rescinded) sweeping tariffs on a range of countries (including Japan and South Korea) and even the European Union.

As of late 2025 and early 2026, the US government has collected over $200 billion in revenue from tariffs. These tariffs are paid by US companies on imported goods, with associated price increases typically passed on to the US consumer.

Ruling

The IEEPA was enacted by Congress in 1977. Ironically, the act grew out of concerns that presidents had been using emergency powers too broadly. The IEEPA does not explicitly mention tariffs, a point that became central in Learning Resources, Inc. v. Trump.

Chief Justice Roberts, wrote in the majority opinion that, “the Government reads IEEPA to give the President power to unilaterally impose unbounded tariffs and change them at will. That view would represent a transformative expansion of the President’s authority over tariff policy. It is also telling that in IEEPA’s half century of existence, no President has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope.”

The lead plaintiffs in the case were small US businesses directly harmed by the tariffs, most notably Learning Resources, Inc., a family-owned educational toy maker based in Vernon Hills, IL, along with its affiliate hand2mind, Inc. These companies import a large share of their products and faced sharply higher duties because of the tariff regime.

What Comes Next

It is unclear what happens next. Only hours after the Supreme Court Ruling, President Trump in a press conference announced a 10% tariff on imports from various countries, which will last for 150 days under Section 122 (which governs “balance of payments”) of the Trade Act of 1974.

Other legal justifications the administration might turn to include national security, under the Trade Expansion Act of 1962 (Section 232), and addressing unfair trade practices under the Trade Act of 1974 (Section 301). The clearest path forward (and the one most in keeping with the Constitution) would be to seek Congressional authority for any new tariffs, but the President faces steep opposition in Congress.

Another thorny problem the ruling raises is how (or even if) monies collected via tariffs would be repaid. Justic Kavanaugh, in the dissenting opinion wrote, "Refunds of billions of dollars would have significant consequences for the US Treasury," adding that the Supreme Court’s ruling, "says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers"—a process he said was likely to be a "mess" during oral arguments.

Industry Reactions

NAHB

Bill Owens, chairman of the National Association of Home Builders (NAHB) and a home builder and remodeler from Worthington, Ohio, issued the following statement after the Supreme Court issued its verdict:

“While the Supreme Court’s ruling reins in presidential authority to impose tariffs under IEEPA, President Trump still has wide latitude in setting tariff policy. With the nation facing a housing affordability crisis, NAHB urges the president to exempt building materials as part of his tariff strategy because they raise construction costs, impede supply chains and result in market and business uncertainty that make it difficult for builders to price their homes. NAHB will continue to work with the administration and Congress to remove regulatory obstacles that hinder the construction of new homes and apartments.”

Associated Builders and Contractors

“Now that the US Supreme Court has overturned IEEPA tariffs, the construction industry could see a modest but meaningful reduction in materials price escalation, specifically for manufactured components like specialty equipment, HVAC and electrical systems, and fixtures,” said Anirban Basu, ABC chief economist.

“Of course, the administration has signaled that plans are in place to replace at least some of those tariffs through other means, so the benefits could be short-lived and completely counteracted by heightened uncertainty during the transition from one tariff mechanism to another," Basu continued. "That, combined with the fact that the Section 232 tariffs on raw inputs like steel and aluminum will remain in place, means that this Supreme Court ruling could ultimately be less consequential for the construction industry.”

CONTRACTOR will continue to follow this story as it develops.