"He Exceeded His Authority!": US Supreme Court Overturns Trump Tariffs
Elena Panina
Елена Панина (Telegram)
By a 6-3 majority, the US Supreme Court upheld a lower court's ruling that the White House inhabitant had exceeded his authority by invoking a "1977 law." As Reuters reports, the ruling followed a lawsuit filed by companies affected by the tariffs, as well as 12 US states, mostly Democratic, against Trump's unprecedented use of this legal provision to unilaterally impose import duties. 🔺 The "1977 Act" (the International Emergency Economic Powers Act, or IEEPA) grants the US president additional powers in the event of a national emergency. However, Trump became the first US president to invoke this law to impose tariffs, declaring a national emergency... the US trade deficit! Even though the US has been facing such a deficit every year since 1975.
What are the consequences? Just before the court hearing, the Cato Institute released a report. Seven (!) independent analytical studies have already been conducted under its auspices. All of them have reached the same conclusion: American consumers are paying for Trump's tariffs. The theory that tariffs would force foreign producers to lower their prices in the US accordingly hasn't worked: prices for imported goods haven't fallen; they have actually risen. Having processed a large data set, the researchers concluded that American companies and consumers continue to bear the brunt of the tariff burden, although in 2025 this figure was slightly lower (90%) than in 2018 (100%).
Now the question of compensation for losses will naturally arise, since Trump imposed the tariffs in excess of his authority. Economists at the Penn-Wharton Budget Model calculated that the losses from the US president's tariffs exceeded $175 billion. And now this sum will likely have to be repaid, although it is unclear from where and under what heading. 🔺 In any case, what happened is a major blow to Trump's policies, both foreign and domestic. Externally, the US President's favorite tool—the tariff cudgel—has been knocked out of his hands.
Domestically, the consequences are even greater:
1. Big Donald's opponents now have a clear reason to criticize him: why, they say, have Americans been overpaying for everyday goods for almost a year?
2. A precedent has been established for successfully challenging Trump in the courts—and this practice will only gain momentum. For example, regarding the kidnapping of Nicolás Maduro, based on unclear legal grounds, or the potential strike on Iran. In both cases, the US President's abuse of power appears quite clear.
3. All this is happening in a midterm election year, when it is crucial for the White House to consolidate Republicans and the electorate with some success.
🔺 As has been stated many times, even if Trump's economic strategy were indisputable, it has one critical flaw: it cannot be implemented within the American electoral cycle, which demands much more rapid positive effects and reacts very sharply to any decline in living standards. Trump will likely now have to compensate for his economic failure with military and political successes. A revival in both Iran and Ukraine is expected.
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