Late last week, the U.S. Supreme Court ruled that President Trump exceeded his authority when imposing tariffs under a federal emergency powers law – a significant decision with implications for businesses engaged in global trade.

In a 6–3 ruling issued February 20, the Court found that the International Emergency Economic Powers Act (IEEPA) does not authorize a president to unilaterally impose broad tariffs by declaring a national emergency. Writing for the majority, Chief Justice John Roberts stated that while Congress has delegated certain trade authorities to the executive branch, it did not grant the power to impose tariffs under IEEPA.

The decision invalidates many of the administration’s country‑by‑country and “reciprocal” tariffs, including duties imposed on imports from China, Canada, Mexico, and dozens of other trading partners. However, the ruling does not affect sector-specific tariffs – such as those on steel and aluminum – that were enacted under separate statutory authorities and which remain in place.

The decision does not provide guidance for how refunds will work. These determinations will lie ahead in the lower courts.

President Trump responded to the Court’s decision saying it is his intention to impose a 15 percent “global tariff” using an alternative law  – the Trade Act of 1974 – which allows the president to set import restrictions for up to 150 days.