US Supreme Court strikes down Trump’s global tariffs

The United States Supreme Court has struck down US President Donald Trump’s sweeping tariffs that he pursued under a law ⁠meant for use in national emergencies, rejecting one of ⁠his most contentious assertions of his authority in a ruling with major implications for the global economy.

The decision on Friday comes after Trump leveraged tariffs – taxes on imported goods – as a key economic and foreign policy tool.

They have been central to a global trade war that Trump initiated after he began his second term as president, one that has alienated trading partners, affected financial markets and caused ⁠global economic uncertainty.

The justices, in a 6-3 ruling authored by conservative Chief Justice John Roberts, upheld a lower court’s decision that the Republican president’s use of this 1977 law exceeded his authority.

Roberts, citing a prior Supreme Court ruling, wrote that “the president must ‘point to clear congressional authorization’ to justify his extraordinary assertion of the power to impose tariffs,” adding: “He cannot.”

The Supreme Court reached its conclusion in a legal challenge by businesses affected by the tariffs and 12 US states, most of them Democratic-governed, against Trump’s unprecedented use of this law to unilaterally impose the import taxes.

It is the first major piece of Trump’s broad agenda to come squarely before the nation’s highest court, which he helped shape with the appointments of three conservative jurists in his first term.

The majority found that the Constitution “very clearly” gives Congress the power to impose taxes, which include tariffs. “The Framers did not vest any part of the taxing power in the Executive Branch,” Chief Justice John Roberts wrote.

Justices Samuel Alito, Clarence Thomas and Brett Kavanaugh dissented.

“The tariffs at issue here may or may not be wise policy. But as a matter of text, history, and precedent, they are clearly lawful,” Kavanaugh wrote in the dissent.

The majority did not address whether companies could get refunded for the billions they have collectively paid in tariffs. Many companies, including the big-box warehouse chain Costco, have already lined up for refunds in court, and Kavanaugh noted the process could be complicated.

“The Court 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. But that process is likely to be a ‘mess,’ as was acknowledged at oral argument,” he wrote.

Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, told Al Jazeera that the court ruling was “definitely a big repudiation of Trump’s tariff agenda and will force him to rely more on other tools, most of which require more public comment period and Congressional authorisation.”

Friday’s ruling will also, in particular, “rein in Trump’s ability to threaten tariffs against any country for any reason,” Ziemba told Al Jazeera.

Additional tariffs

Trump’s tariffs were forecast to generate over the next decade trillions of dollars in revenue for the US, which possesses the world’s largest economy.

Trump’s administration has not provided tariffs collection data since December 14. But Penn-Wharton Budget Model economists estimated on Friday that the amount collected in Trump’s tariffs based on the International Emergency Economic Powers Act stood at more than $175bn. And that amount likely would need to be refunded with a Supreme Court ruling against the IEEPA-based tariffs.

The US Constitution grants Congress, not the president, the authority to issue taxes and tariffs. But Trump instead turned to a statutory authority by invoking IEEPA to impose the tariffs on nearly every US trading partner without the approval of Congress, the first president to use that.

Trump has imposed some additional tariffs under other laws that are not at issue in this case. Based on government data from October to mid-December, those represent about third of the revenue from Trump-imposed tariffs.

Ziemba said she expects Congress to support tariffs on China and perhaps approve secondary tariffs, but many other tariffs like fentanyl tariffs on Canada and Mexico or broad reciprocal tariffs “are unlikely to pass.”

Trump described the tariffs as vital for US economic security, predicting that the country would be defenseless and ruined without them. Trump in November told reporters that without his tariffs “the rest of the world would laugh at us because they’ve used tariffs against us for years and took advantage of us.” Trump said the US was abused by other countries including China, the second-largest economy.

After the Supreme Court heard arguments in the case in November, Trump said he would consider alternatives if it ruled against him on tariffs, telling reporters that “we’ll have to develop a ‘game two’ plan.”

Treasury Secretary Scott Bessent and other administration officials said the US would invoke other legal justifications to retain as many of Trump’s tariffs as possible.

Among others, these include a statutory provision that permits tariffs on imported goods that threaten US national security and another that allows retaliatory actions including tariffs against trading partners that the Office of the US Trade Representative determines have used unfair trade practices against American exporters.

None of these alternatives offered the flexibility and blunt-force dynamics that IEEPA provided Trump, and may not be able to replicate the full scope of his tariffs in a timely fashion.

Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: aljazeera.com