The U.S. Supreme Court has struck down a major tool of President Donald Trump’s tariff wars, declaring his exercise of so-called border “emergency” powers an unconstitutional flex.
In a 6-3 ruling Friday, the court wrote that Trump had no authority under the International Emergency Economic Powers Act (IEEPA) to levy tariffs against dozens of countries, including Canada.
The ruling comes just four months after a hearing where Trump-appointed judges challenged his administration’s arguments with a defiance that surprised many.
It does not, however, affect the legality of sector-specific tariffs issued under Section 232 of the Trade Expansion Act.
Those remain in place, with many observers in Canada warning Friday that Trump may now shift to using different powers to effectively continue his imposition of punishing duties on countries he blames for using unfair competitive or trading practices.
Still, the 170-page court decision released Friday was an unequivocal dismissal of the Trump administration’s arguments that the president has extraordinary emergency powers to levy tariffs.
It declares that taxing powers lie only with Congress, and leaves no doubt that tariffs are a domestic tax, contrary to Trump’s claim that other countries, not Americans, are the ones that pay.
“Tariffs operate directly on domestic importers to raise revenue for the Treasury and are ‘very clear[ly] … a branch of the taxing power’” that only Congress can exercise, Chief Justice John Roberts wrote in the case of Learning Resources, Inc. v. Trump.
The framers of the U.S. Constitution gave Congress “alone … access to the pockets of the people,” the majority states. “The Framers did not vest any part of the taxing power in the Executive Branch.”
However, for Canada and other affected trading partners, the ruling contains a big red flag.
The Supreme Court points out that Trump’s use of other tariffs that affect specific sectors like steel or aluminum is a different and more constitutional exercise of presidential power.
Section 232(b) of the Trade Expansion Act of 1962 “contains sweeping, discretion-conferring language that IEEPA does not contain,” the court said. The Trade Expansion Act contains an explicit reference to duties which “renders it natural” that it can be cited to “authorize duties,” as Trump has done in the case of tariffs he imposed on global auto, steel, aluminum, copper and other specific imports.
Shortly after returning to office, Trump cited the IEEPA or emergency act to address “two foreign threats: the influx of illegal drugs from Canada, Mexico and China” and the growing American trade deficits the president says have hollowed out the American manufacturing base and undermined critical supply chains, the court stated.
But the court’s decision dismissed the administration’s justification for doing so entirely. It cited precedents and ordinary interpretation of the words in the statute, and refuted federal lawyers’ claims that the emergency law should be read to allow the president “to unilaterally impose unbounded tariffs and change them at will,” saying to do so “would represent a transformative expansion of the President’s authority over tariff policy.”
In more than half a century since the law was enacted, no president has invoked the act that way, and the court said “the foreign affairs implications of tariffs do not make it any more likely that Congress would relinquish its tariff power through vague language, or without careful limits.”
The section 232 tariffs have hit Canada’s automotive, steel, aluminum and softwood lumber industries. Section 232 gives the U.S. president authority to issue tariffs on national security grounds.
In a brief statement posted on social media, Canada-U. S. Trade Minister Dominic LeBlanc offered a mild cheer for the American high court ruling, saying it “reinforces Canada’s position” that the border emergency tariffs “imposed by the United States are unjustified.”
But LeBlanc did not claim victory, saying that although Canada currently has “the best” trade arrangement of any American trading partner due to tariff exemptions that Trump agreed to for exports that comply with the current free-trade agreement, there remain the punishing sectoral tariffs, as well as the upcoming review of the trade agreement itself.
“We recognize that critical work lies ahead to support Canadian businesses and workers who remain affected by Section 232 tariffs on steel, aluminum and automotive sectors,” he wrote.
“Through a period of transformation in Canada’s relationship with the United States and as we approach the first joint review of the Canada-United States-Mexico Agreement, we are working to create growth and opportunities on both sides of the border, while strengthening our collaboration with reliable trading partners and allies around the world.”
In a written statement, the head of the Canadian Chamber of Commerce echoed LeBlanc’s sentiments, and warned that the ruling could prompt harsh retaliation from Trump.
“The Supreme Court’s decision to strike down the use of IEEPA tariff powers is a legal ruling, not a reset of U.S. trade policy. This is certainly not the last chapter of this never-ending story,” said chamber CEO Candace Laing. “Canada should prepare for new, blunter mechanisms to be used to reassert trade pressure, potentially with broader and more disruptive effects.”
In a dissenting opinion, Justice Brett Kavanagh noted that the court didn’t mention the sticky question of refunding tariffs that had already been collected.
“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,” Kavanagh wrote.
The Supreme Court heard appeals late last year of lower-court rulings that had declared Trump’s IEEPA tariffs illegal.
At Queen’s Park, Premier Doug Ford applauded the ruling.
“Today’s U.S. Supreme Court decision is another important victory in the fight against President Trump’s tariffs but the battle isn’t over yet. We need to watch how the White House reacts. We need to keep up the fight against tariffs on auto, steel, aluminum and forestry, which remain in place and continue to hurt our workers,” he said in a statement.
“I won’t stop fighting until every last tariff against Canada is dropped so we can grow our economies and create jobs on both sides of the border.”
With files from Rob Ferguson
