BLUF
In a 6-3 ruling on Friday, the Supreme Court concluded that the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to levy broad global tariffs was an executive overreach of power. The majority argued that the language of IEEPA was not explicit enough to justify granting President Trump the ability to impose taxes, a power expressly reserved for Congress. Additionally, it agreed that the legislative history behind Congressional authority to regulate imports did not support an interpretation that Congress could even delegate such authority. The dissent argued that the national security rationale behind Trump’s “Liberation Day” tariffs granted broad authority to regulate importation as a means of conducting foreign policy, an authority that encompassed taxation. This ruling does little to stop Trump’s use of tariffs to carry out his foreign policy agenda. Still, it does open the door for up to $175 billion of tariff refund requests and potential renegotiations of trade agreements.
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How did we get here?
Facts of the Case
On April 2, 2025, U.S. President Donald Trump declared a national emergency on the basis of unfair trade practices, trade imbalances, and harms to American manufacturing. As part of this national emergency, he invoked the International Emergency Economic Powers Act (IEEPA), which authorizes the President to “investigate, regulate, or prohibit…any transactions in foreign exchange…between the United States and any foreign country.” President Trump used IEEPA to justify his famous “Liberation Day” tariffs that same day, imposing a base level 10% tariff on all countries with an additional 25-45% tariffs on goods from countries like Canada, Mexico, and China.
Learning Resources, Inc., an educational toy company based in Illinois, was significantly impacted by these tariffs, ballooning their import costs from $2.3 million in 2024 to $100 million in 2025. Along with its sister company, Hand2Mind, Inc., Learning Resources filed suit against the Trump administration in the U.S. District Court for the District of Columbia. The court granted them a preliminary injunction and ruled that IEEPA does not authorize Trump’s reciprocal tariffs. However, this decision and those similarly decided by the U.S. Court of International Trade were stayed by the U.S. Circuit Court of Appeals for the Federal Circuit. And on September 9, the Supreme Court granted certiorari to hear this case on November 5.
Arguments of the petitioners (Learning Resources, Inc. et al.)
President Trump’s tariffs lacked explicit authorization. The Petitioners argued that while IEEPA authorizes the President to “regulate importation” during a national emergency, it never explicitly mentions this to include tariffs or taxes, a power granted solely to Congress under Article I of the Constitution. Futhermore, IEEPA authorizes the President to regulate the “importation and exportation” of transactions and property (50 U.S.C. § 1702(a)(1)(B)), meaning that if the word “regulate” had truly meant to grant the power to tariff, the entirety of IEEPA would have been unconstitutional on the grounds that the Constitution expressly prohibits export tariffs (Article I, § 9, cl. 5).
Historical precedent does not back up Trump’s interpretation of IEEPA. In the history of IEEPA and its predecessor, the Trading with the Enemy Act (TWEA) of 1977 (50 USC Ch. 53), no prior president had ever invoked the statutes to impose tariffs. President Nixon imposed a surcharge on imports in 1971 using the Tariff Act of 1930 and the Trade Expansion Act of 1962, both of which explicitly authorize tariffs. President Trump himself imposed tariffs in his first term on the basis of Section 232 and Section 301 authorities, not IEEPA.
If Congress wanted him to, it would’ve said so. The Petitioners further argue that if Congress truly had intended to authorize presidents to use IEEPA in this manner, effectively bypassing the legislative branch’s own power of the purse, it would have explicitly said so in no uncertain terms. This is commonly referred to as the Major Questions Doctrine. If the executive branch wants to invoke any powers that were not previously granted by Congress, it requires clear congressional authorization, especially for powers of such vast economic and political significance. They argue that no such authorities were enumerated.
The government could argue that the Major Questions Doctrine doesn’t apply to issues of national security. “Nope,” says the Petitioners. The famous Youngstown v. Sawyer case asserts that the President cannot assume powers expressly delegated to Congress without its authorization, even in a national security context.
Arguments of the respondents (Trump administration)
The power to regulate importations naturally encompasses the power to tariff. The regular meaning of “regulate” in the context of foreign commerce unambiguously authorizes the President to levy tariffs, as Solicitor General D. John Sauer argued. This interpretation tracks all the way back to Gibbons v. Ogden in 1824, in which Chief Justice John Marshall remarked that “The right to regulate commerce, even by the imposition of duties, was not controverted.” Furthermore, the authorities granted by IEEPA not only include “regulate,” but it also authorizes the President to “block,” “nullify,” “void,” “prevent,” and “prohibit” importations, among others (50 U.S.C. 1702(a)(1)(B)). Thus, the Trump administration argues that it would be quite strange to use a whole range of words to cover several different authorities and exclude the power to tariff without explicitly mentioning it.
The Major Questions Doctrine does not apply here. The administration argued that the major questions doctrine does not apply with the same force to the President, especially in the context of foreign affairs and national security. Furthermore, this doctrine is used as a tool for courts to discern ambiguous statutory language. In this case, because the administration argues that the ability to “regulate importation” is unambiguous, this doctrine does not apply.
Threats to national security give the President broad authority. The administration framed the tariffs as essential tools for addressing two “unusual and extraordinary” threats: the illicit drug trade and trade deficits. Presidents have long been granted deference in using IEEPA to address national security issues. For instance, President Ronald Regan invoked IEEPA to respond to South Africa’s apartheid (Executive Order No. 12,532, 50 Fed. Reg. 36,861).
Furthermore, there is the question of the nondelegation doctrine, a rule that prohibits Congress from ceding its legislative authority (including the power of the purse) to another branch of government, essentially ensuring the separation of powers. To this, the Trump administration responded that the nondelegation doctrine has “minimal weight” in the context of foreign affairs and national security. It argued that because the President has independent constitutional authority over international relations, Congress can grant significantly broader discretion than it could in purely domestic matters. And when combining solely vested executive authority with delegated authority from Congress, “his authority is at its maximum,” to quote the Youngstown case again.
Majority opinion in a nutshell
In a 6-3 ruling on Friday, the Supreme Court ruled that IEEPA does not authorize the President to impose these tariffs. But even among the majority opinion, there were internal disagreements as to what was necessary to reach such a ruling.
The major questions doctrine argument (Roberts, Gorsuch, and Barrett)
“Regulate” DOES NOT mean “tax”: The majority ruled that a tariff is a tax. While taxes can be a “means” to a regulatory “end,” the ordinary course of “regulatory powers” does not inherently vest the extraordinary power to “tax.” Furthermore, even if “regulate” did unambiguously mean “tax,” the Court agreed with Learning Resources that, because IEEPA grants regulatory powers over both imports and exports, the Presidential power to tax would also have to include the power to levy tariffs on exports, an action that would be expressly unconstitutional, as mentioned before.
No congressional authorization: In the wide-ranging powers that IEEPA grants the President, Congress essentially “covered the field” of authorities granted under the Act. When Congress delegates tariff authority (as it does in Title 19 Custom Duties), it does so with “clear and unambiguous language” and “careful constraints,” neither of which is present in the text of IEEPA. Justices Roberts, Gorsuch, and Barrett pointed to the major questions doctrine explained above to justify limiting potential executive encroachment. Moreover, they found the argument that the major questions doctrine does not apply in national emergencies to be unconvincing.
The plain text reading and historical precedent argument (Kagan, Sotomayor, Jackson)
While Justices Kagan, Sotomayor, and Jackson came to the same conclusion, they felt that invoking the major questions doctrine was unnecessary and that the ruling could be justified through a plain text reading and historical lens. They maintained that the plain text of IEEPA, along with its legislative history, was sufficient to show it was never intended to be a revenue-raising statute. They viewed IEEPA primarily as a tool for targeted sanctions and freezing foreign assets, not for levying taxes on American importers. Additionally, they expressed concerns that the major questions doctrine could become a tool for judicial overreach, allowing judges to strike down executive actions based on their own political or economic philosophy.
Dissenting opinion in a nutshell
(Thomas, Alito, Kavanaugh)
“Regulate…importation” DOES authorize taxation: Justices Thomas, Alito, and Kavanaugh agreed with the government’s position that IEEPA’s wording of “regulate…importation” does, in fact, grant broad statutory authority to tax. Justice Kavanaugh stated in his dissent, “Like quotas and embargoes, tariffs are a traditional and common tool to regulate importation,” citing historical precedent of Congress granting the President the authority to impose tariffs on foreign goods.
The President has broad authority when dealing with issues of national security or foreign policy. The dissent further argued that the invocation of the major questions doctrine was misplaced in the context of foreign affairs because Congress intentionally uses vague language when granting emergency powers to allow the President sufficient leverage. In this case, tariffs were likened to “bargaining chips” that the President can use against an adversarial country. Finally, on the point about the nondelegation principle, the dissent rebukes what this idea would mean in practice, emphasizing that it would make the tariffs unconstitutional even if IEEPA had explicitly granted the power to tariff, effectively hamstringing the government’s ability to carry out foreign policy through economic statecraft.
Reversing course on IEEPA tariffs would cause an economic mess: Justice Kavanaugh argued that the economic effects of reversing the IEEPA tariffs would be incredibly disruptive, especially for countries that already struck trade agreements with the Trump administration in exchange for tariff reductions. The government may now be required to refund billions of dollars in collected revenue, causing significant fiscal and administrative disruption.
So, what happens now?
Why this ruling is not as big a deal
As big a disappointment as this opinion was for the Trump administration, it was a fairly narrow ruling, one that struck down just one of the avenues through which it could levy tariffs. Justice Kavanaugh states that “the Court’s decision is not likely to greatly restrict Presidential tariff authority going forward”. This is true, as there are many other statutory means through which tariffs are still possible. For instance, the administration could use Section 338 of the Tariff Act of 1930, which enables the President to tariff foreign countries to offset commercial disadvantages. Or maybe he could use Section 232 of the Trade Expansion Act of 1962, which allows the President to impose tariffs on the basis of national security.
Moments after the Supreme Court’s ruling on Friday, President Trump had already found workarounds, imposing a 10% global tariff based on Section 122 of the 1974 Trade Act, which allows him to impose import restrictions to “deal with large and serious United States balance-of-payments deficits” (19 U.S.C. § 2132). Trump has also noted that he plans to use Section 301 tariffs to crack down on unfair trade practices, the same tariffs that he used in the U.S.-China trade war during his first administration.
Why this ruling is a big deal
Regardless of what the Court said, the tariffs have already been paid. The ruling effectively turns billions of dollars in collected duties into “refundable overpayments.” IEEPA tariffs currently account for 60 percent of current tariffs, and industry estimates peg the refund liabilities that the U.S. government may owe between $130 billion and $175 billion in refunds to over 300,000 importers. And considering the 21 countries with which the U.S. has made trade agreements to address the IEEPA tariffs, the Trump administration has essentially lost a huge source of leverage with these countries, many of which may try to renegotiate for better terms.
The ruling also sets the precedent that there are no emergency or foreign affairs exceptions to the major questions doctrine, meaning that, even in international relations, the President cannot take actions of “vast economic and political significance” without a clear, specific mandate from Congress. This opens up a whole can of worms for future litigation—there are likely to be major challenges to executive actions, such as export controls, if that authority is based on vague statutory language.
Learning Resources v. the Trump administration, in my opinion, is not a landmark case for American history, but rather a landmark case for the Trump administration. Tariffs are Trump’s bread and butter, a way in which he can throw the weight of the entire American economy behind him to effectuate policy change. With this ruling in place, I think it could do one of two things. It could nudge him to exercise more caution when attempting to utilize the coercive economic power that the U.S. market has, or it could embolden him to find more aggressive, non-economic levers of foreign policy.
