The Supreme Court ruled today against the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to institute sweeping tariffs on nearly every country that conducts trade with the U.S. The ruling upends much of the trade action taken by the Trump administration, as part of a broad policy aimed at reshaping the U.S. economy, impacting estimated tariff revenue of well over $100 billion collected by the federal government in 2025.
The court decided 6-3 against the administration’s use of IEEPA for tariffs, with both Republican and Democratic appointees, including Chief Justice John Roberts and Trump appointees Neil Gorsuch and Amy Coney Barrett, ruling against. Justices ruling against found that Congress did not delegate the authority to tax in that law, with tariffs being a tax on imports into the country. The justices upheld a lower court ruling from last year that reached a similar conclusion and prohibited the administration from using IEEPA for tariffs.
It is not yet clear if refunds will be a part of the court-ordered remedy, although return of the tens of billions of dollars in IEEPA tariffs paid by importers could well be directed by a federal judge. The Supreme Court did not explicitly order import duties that were incorrectly levied by the administration to be repaid. Instead, the justices remanded the case back to a lower court for further determination.
Tariffs impacted by the ruling include the 10% universal tariffs on most imports, as well as additional tariffs of varying levels imposed on major trade partners including China, Canada, Mexico and the European Union. However, hours after the decision, President Donald Trump promised to reimpose a 10% universal tariff, temporarily, using a different law. Other tariffs imposed under different statute also remain in place, and more are possible in the near future.
Grant Thornton insight:
The imposition of aggressive new tariffs by the Trump administration led a number of trading partners to negotiate trade frameworks and interim agreements with the U.S. to lower tariffs on their products in the U.S. In many cases — for the EU, for example — the agreements were viewed as heavily skewed towards the U.S. The Supreme Court’s decision, nullifying the duties that were the basis for these temporary deals, could create additional uncertainty over the durability of those agreements, and international supply chains will be tested.
Trump administration can still use other tariff options
The administration continues to be committed to other increased tariffs using more well-established legal mechanisms and has said it will replace IEEPA tariffs with duties allowed under other statutes if the court’s ruling was unfavorable.
During his press briefing on Feb. 20, Trump called the decision “deeply disappointing” and referred to “very powerful alternatives” the administration can use to impose tariffs. Trump said that under a new executive order, the U.S. will immediately impose a 10% universal tariff under Section 122 of the Trade Act of 1974, which allows for tariffs for up to 150 days if the president deems there is a balance of payments crisis or international payments problem.
Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962 have already been used by Trump in both his terms in office to raise tariffs above historical rates, including new duties and trade controls imposed or announced in 2025, including on steel, aluminum, copper, auto parts, timber, lumber, trucks, and hundreds of derivatives or parts related to those products. The Trump administration also has ongoing Section 232 investigations into:
- Pharmaceuticals, pharmaceutical ingredients, and medical devices
- Semiconductors
- Processed critical minerals and derivative products
- Commercial aircraft and jet engines
- Polysilicon and derivatives
- Unmanned aircraft systems, parts, and components
- Wind turbines
- Personal protective equipment, medical equipment, and medical devices
- Robotics and industrial machinery
In addition to ongoing product-specific tariffs, the U.S. Trade Representative has ongoing Section 301 investigations into Brazil and China that could result in additional tariffs on products from those countries. Trump said today that the administration will initiate more such investigations.
However, Section 232 and Section 301, as well as most other laws the Trump administration could cite to impose or reimpose duties, require more process than the IEEPA tariffs, allowing for more planning time for businesses, consumers and countries. Section 201 of the Trade Act of 1974, another tariff statute that the administration could use, also involves an investigatory process.
Section 338 of the Tariff Act of 1930 also delegates tariff authorities to the president but has never been used, allowing for tariffs of up to 50% on products from countries the president believes have discriminated against U.S. products. While there is no investigation requirement for the administration, the International Trade Commission is tasked with informing the president of instances of discriminatory trade practices for using Section 338.
Tariffs became a significant revenue source for the federal government in 2025, with $91 billion of tariff revenue exceeding $81 billion of corporate tax receipts collected in the last quarter of the year.
Grant Thornton insight:
While Congress also could pass new laws delegating more tariff authority to the president or imposing tariffs in line with those that have been nullified by the Supreme Court, such legislative action is highly unlikely. Tariffs are politically unpopular, and several congressional Republicans have joined resolutions to overturn IEEPA tariffs on specific countries prior to the court’s ruling. Immediately following the decision today, House Speaker Mike Johnson, R-La., wrote in a social media post, “Congress and the Administration will determine the best path forward in the coming weeks.”
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