On Friday, the U.S. Supreme Court issued a significant ruling on the limits of presidential authority over trade policy. In a 6‐3 decision, the Court held that President Donald Trump did not have the authority to impose two categories of tariffs under the International Emergency Economic Powers Act (IEEPA), a 1977 law typically used to regulate economic activity during national emergencies.

The majority opinion described the administration’s interpretation of IEEPA as “extravagant by any measure.” According to the ruling, IEEPA does not grant the president authority to:

• Impose tariffs on nearly every country in the world in response to trade deficits; or
• Levy tariffs on Mexico, Canada and China as a means of pressuring them over their roles in the flow of illegal fentanyl into the United States.

The Court did not address whether $150 billion collected under the IEEPA‑based tariffs should be refunded. In response to the ruling, Trump announced that he would move forward with tariff increases under different statutory authorities, increasing his 10% global tariff to 15% by relying on:

• Section 122 of the Trade Act of 1974, which allows temporary import surcharges under specific balance‑of‑payments conditions, and
• Section 301 of the Trade Act of 1974, which permits retaliation against unfair foreign trade practices.

These new tariffs shift the policy debate to the 2026 midterm campaign cycle, ensuring that trade policy will remain a major political battleground in the coming months.