The Supreme Court on Friday delivered a decisive blow to the use of executive emergency powers, ruling that the International Emergency Economic Powers Act (IEEPA) does not grant the President the authority to unilaterally impose tariffs. In a 6-3 decision, the Court held that while the President has broad tools to address foreign threats, the power to tax imports remains a core constitutional function of Congress.
The case, Learning Resources, Inc. v. Trump, centered on a series of duties imposed to address two separate national emergencies: the flow of illegal drugs from Canada, Mexico, and China, and “large and persistent” trade deficits. To combat these, the President had invoked IEEPA to levy a 25% duty on most Canadian and Mexican goods and a 10% “reciprocal” tariff on all global trading partners.
The Power of the Purse
Chief Justice John Roberts, writing for the majority, emphasized that Article I of the Constitution explicitly vests the power to “lay and collect Taxes, Duties, Imposts and Excises” in Congress. The Court rejected the Government’s argument that the statutory authority to “regulate importation” included the power to tax.
“The power to impose tariffs is very clearly a branch of the taxing power,” Roberts wrote. “The Framers did not vest any part of the taxing power in the Executive Branch.” The majority noted that in the nearly 50-year history of IEEPA, no previous president had attempted to use the law to raise revenue through tariffs, a “lack of historical precedent” that the Court found telling.
A Narrower View of “Regulation”
The Government argued that since IEEPA allows the President to take extreme actions—such as total embargoes or blocking property—he must also have the “lesser” power to impose a tax. The Court disagreed, finding that taxes are different in kind, not just degree, from regulatory restrictions.
While the Court was unanimous in its final judgment that IEEPA does not authorize these specific tariffs, the Justices split on the reasoning. A trio of conservative justices relied on the “major questions doctrine,” which requires clear congressional permission for executive actions of vast economic significance. Meanwhile, the Court’s three liberal justices argued that ordinary rules of language were enough to show that “regulate” does not mean “tax.”
Dissent Warns of “Unwisdom”
In a sharp dissent, Justice Brett Kavanaugh, joined by Justices Thomas and Alito, argued that the ruling ignores the flexibility the President needs in foreign affairs. He noted that the Court had previously allowed similar “monetary exactions” under other trade laws.
“Like quotas and embargoes, tariffs are a traditional and common tool to regulate importation,” Kavanaugh wrote. He warned that the decision could create a “mess” for the U.S. Treasury, which may now be required to refund billions of dollars collected from importers over the past year.
Immediate Impact
The ruling effectively freezes the current emergency tariff framework, though the dissent noted that the President may still be able to pursue similar duties under other specific trade statutes that involve more rigorous procedural steps.
The decision may be seen as a major victory for the small businesses and the 12 states that led the legal challenge, claiming the tariffs had disrupted supply chains and increased costs for American consumers.
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