Trump’s tariffs on Canada, world are unlawful, U.S. Supreme Court rules – National
- Read the timeline of all Trump’s tariffs imposed so far here
The U.S. Supreme Court on Friday ruled that U.S. President Donald Trump overstepped his presidential authority by imposing tariffs on Canada, Mexico and other countries under emergency powers, striking down a central economic and diplomatic strategy that has upended global trade.
A majority of the justices sided with lower courts that had found Trump improperly used tariffs to respond to national emergencies he declared over fentanyl trafficking in North America and international trade deficits, the latter of which led to so-called “reciprocal” tariffs against dozens of nations.
The law Trump used to exercise that authority, the International Emergency Economic Powers Act (IEPPA), “does not authorize the President to impose tariffs,” Chief Justice John Roberts wrote in the majority opinion.
Two of Trump’s appointees to the court, Amy Coney Barrett and Neil Gorsuch, joined Roberts and the three liberal justices in striking down the tariffs.
The ruling is a blow to Trump, who has called his apparent power to quickly impose tariffs a “vital” negotiating tool. He has claimed the tariffs are helping reduce the national debt and pay for certain domestic policy priorities, despite recent data showing the historic U.S. trade deficit has continued to grow.
The impact of the ruling is not immediately clear.
Trump can still impose tariffs under other authorities, including a national security clause known as Section 232 that targets specific industries rather than countries. Those tariffs on goods including steel, lumber and automobiles remain in place.
A vast majority of goods from Canada and Mexico have also been exempt from the fentanyl-related tariffs due to the Canada-U.S.-Mexico Agreement on free trade (CUSMA). Several countries have also since struck new trade deals with the U.S. that replaced the “reciprocal” tariffs with lower duties.
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Still, the ruling takes away a key negotiating and diplomacy tool Trump has used to threaten countries with tariffs in exchange for concessions on trade and foreign policy.
The ruling also doesn’t address the issue of refunding tariffs paid by American businesses for foreign imports.
A coalition of business owners that signed onto the case, organized under the name We Pay the Tariffs, has said that revenues from presidential tariffs totalled a record US$175 billion between March and October of last year.
The case involved a pair of lawsuits that challenged Trump’s use of IEEPA, a 1977 law that allows the president to manage economic transactions during an emergency.
Trump first used the law in February to declare a national emergency over fentanyl trafficked into the U.S., and imposed economy-wide tariffs on Canada, Mexico and China to force action from those countries on the issue.
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He then declared persistent U.S. trade deficits a national emergency in April, leading to what he called “Liberation Day” and the “reciprocal” tariffs on most of the rest of the world.
The court sided with the plaintiffs who argued the IEEPA makes no specific mention of tariffs as a remedy to national emergencies, that Trump’s tariffs are an inappropriate response to the specific emergencies he declared — particularly the one over the fentanyl crisis — and that persistent trade deficits aren’t an “emergency” at all.
Roberts and the other justices in the majority also repeatedly pointed out that the U.S. Constitution gives Congress the sole authority over domestic and foreign taxes, which includes tariffs on countries as a whole.
The Trump administration argued in court that the law’s language allowing the president to regulate imports in response to a national emergency includes tariffs, which the court didn’t accept.
“Based on two words separated by 16 others” within the IEEPA, Roberts wrote —“’regulate’ and ‘importation’—the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time.
“Those words cannot bear such weight.”
Ontario Premier Doug Ford took to X to react to the news of the tariff ruling Friday, and called the decision an “important victory.”
“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,” said Ford.
“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. 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.”
Friday’s ruling marks a rare rebuke by the high court, whose conservative majority was strengthened during Trump’s first term, of Trump’s push to expand the powers of the presidency at the expense of congressional oversight.
In his dissenting opinion, Justice Brett Kavanaugh pointed to many questions left unanswered by the ruling, including the potential “mess” of future tariff refunds — something acknowledged during oral arguments in November.
“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,” he wrote.
“A second issue is the decision’s effect on the current trade deals. Because IEEPA tariffs have helped facilitate trade deals worth trillions of dollars — including with foreign nations from China to the United Kingdom to Japan, the Court’s decision could generate uncertainty regarding various trade agreements. That process, too, could be difficult.”
Prepare for ‘blunter mechanisms’
Canada-U.S. Trade Minister Dominic LeBlanc said in a social media post that the ruling “reinforces Canada’s position that the IEEPA tariffs imposed by the United States are unjustified.”
Yet he noted the government is still working to get remaining tariffs removed on critical sectors, both in direct negotiations and in this summer’s review of CUSMA.
“While Canada has the best trade deal with the United States of any trading partner, 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.
Canada’s business and industry leaders responded to the ruling on Friday, warning the challenges are not over yet.
The Canadian Chamber of Commerce said Canada should be prepared for “blunter mechanisms.”
“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. Canada should prepare for new, blunter mechanisms to be used to reassert trade pressure, potentially with broader and more disruptive effects,” said Candace Laing, president and CEO of the Canadian Chamber of Commerce, in a written statement.
“While we walk confidently into the upcoming CUSMA review with the clear value of the deal on the table, companies are moving fast to diversify to hedge against future shocks. The Mexico Mission this past week is a further push toward not being caught with all our eggs still all in the same basket.”
U.S. tariffs have especially impacted Canada’s autos and auto parts sectors, with layoffs seen most recently at General Motors in Ontario.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said he sees the “value” in the ruling announced Friday, but the the industry is still faced with tariffs.
“There is some value in knowing now that the Supreme Court was prepared to uphold the law with an overreaching President,” said Volpe in a written statement.
“We all know that the President was misusing the law in unprecedented trade aggression with the rest of the world. This decision though only deals with the IEEPA tariffs, national security tariffs on industrial Canada remain in place.”
The Canadian Federation of Independent Business’s president, Dan Kelly, said although this ruling won’t eliminate the sense of uncertainty facing Canadian business owners, this is still “good news,” especially with upcoming trade negotiations.
“Unfortunately, this ruling will not help address the uncertainty related to Canada/U.S. trade, nor the crippling tariffs on steel and aluminum that have been imposed by both countries,” said Kelly in a written statement.
“While we should not expect the administration to end its efforts to impose tariffs, this decision may help sway other U.S. political leaders against this harmful approach as both countries review the CUSMA [Canada-United States-Mexico] agreement. While uncertainty continues, this is a good day for Canadian businesses.”
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