Trump has lost the tariff battle but not the tariff war

The Supreme Court’s tariff decision landed about where conventional wisdom said it would: The justices ruled 6–3 that the International Emergency Economic Powers Act simply doesn’t give the president the sweeping authority the Trump administration claimed. That’s not a political rebuke. It’s a legal one, and a narrow one at that.

Chief Justice John Roberts put the bottom line plainly: “We hold that IEEPA does not authorize the President to impose tariffs.”

That’s it. Not that tariffs are unconstitutional. Not that Trump’s trade agenda is illegitimate. Just that this particular statute doesn’t do the work the administration wanted it to do.

The core of the majority’s reasoning is straightforward and, frankly, hard to argue with. Article I gives Congress the power to tax, and tariffs are taxes.

As Roberts explained, “The power to impose tariffs is ‘very clear[ly] . . . a branch of the taxing power.’” The administration conceded the president has no inherent authority to impose tariffs. So everything turned on whether Congress clearly delegated that power in IEEPA.

It didn’t.

IEEPA authorizes the president to “investigate, block… regulate, direct and compel, nullify, void, prevent or prohibit” various economic transactions. But, as the court noted, “Absent from this lengthy list of powers is any mention of tariffs or duties.”

That omission matters, especially because Congress knows how to delegate tariff authority when it wants to.

The government tried to argue that the power to “regulate … importation” naturally includes the power to impose tariffs. The court wasn’t buying it.

“The Government cannot identify any statute in which the power to regulate includes the power to tax,” Roberts wrote.

And that makes sense. We don’t assume that when Congress creates a federal program, it’s secretly giving the agencies in charge of the implementing regulations carte blanche taxation authority.

The majority drove the point home: “None of IEEPA’s authorities includes the distinct and extraordinary power to raise revenue.” Tariffs “operate directly on domestic importers to raise revenue for the Treasury” and are, again, “a branch of the taxing power.” That’s basic separation of powers.

At the same time, the ruling is necessarily narrow. The court did not say the president lacks authority to impose tariffs. It said this law doesn’t authorize these tariffs.

That’s a process foul, not a substantive veto.

Indeed, a clear court majority would agree with Justice Brett Kavanaugh’s observation in dissent that “numerous other federal statutes authorize the President to impose tariffs and might justify most (if not all) of the tariffs at issue in this case” — albeit with a few procedural hoops to jump through.

Treasury Secretary Scott Bessent has been publicly discussing these alternatives for months, clearly anticipating that IEEPA might not survive judicial scrutiny.

So the practical effect is likely to be a policy win for the administration.

Instead of a blunderbuss “tariff the world” approach justified by a vaguely defined emergency, the White House will now have to rely on more tailored statutory authorities. That means specific national-security findings and sector-by-sector adjustments that lead to a more disciplined and defensible trade strategy.

That’s good economics and good foreign policy.

Blanket global tariffs make little sense as a matter of strategy. Targeted measures against unfair trade practices or specific strategic vulnerabilities are far more coherent — and far more likely to survive legal challenge.

I was surprised, however, by Justice Clarence Thomas’s dissent. In recent years he has been one of the court’s most vocal skeptics of broad, open-ended congressional delegations. Yet here he was willing to read IEEPA as granting vast discretion. It’s a head-scratcher.

Justice Kavanaugh’s position was less surprising. Having worked in the White House, he’s long been more deferential to presidential authority, especially in foreign affairs and national security, though Chief Justice Roberts pointed out that there’s no “foreign affairs exception” to the idea that Congress must speak clearly when delegating authority over “major questions” of political or economic importance.

As for the liberal justices, their votes were predictably result-oriented. It’s not hard to imagine them upholding sweeping global tariffs if imposed by a Democratic president under a supposed climate-change emergency.

To leave themselves that wiggle-room, they joined the statutory holding here, but declined to embrace the broader separation-of-powers reasoning.

In the end, this decision doesn’t kneecap Trump’s trade agenda but forces it onto firmer legal ground.

The court essentially told the administration: don’t steal bases in pursuit of what may be worthy goals. If Congress wants to give the president sweeping tariff authority, it can.

That’s not a defeat for executive power. It’s a reminder that, as Justice Neil Gorsuch explained, in our system, big policy changes are supposed to go through the legislative process.

And if the administration adjusts accordingly, this ruling will strengthen its long-term project.

Ilya Shapiro is director of constitutional studies at the Manhattan Institute and author, most recently, of “Lawless: The Miseducation of America’s Elites.” He also writes the Shapiro’s Gavel newsletter.