The Supreme Court handed President Donald Trump a major loss on Friday, striking down his sweeping “Liberation Day” tariffs as unlawfully implemented.
The high court said in its majority ruling that the International Emergency Economic Powers Act does not authorize the president to impose tariffs. The ruling marks a significant setback for the president’s signature economic agenda item and is a rare rebuke for Trump from the justices after a a series of wins at the high court over the last year.
During oral arguments in November 2025, the justices appeared highly skeptical of the Trump administration’s arguments that the International Emergency Economic Powers Act authorized the president to implement the sweeping tariffs.
Trump used IEEPA to implement his sweeping “reciprocal tariffs” for most countries, with a 10% baseline rate and higher rates for select countries, along with his tariffs aimed at Canada, Mexico, and China over their alleged role in the fentanyl crisis. Other tariffs imposed by the president on aluminum, steel, and cars, among other products, are not affected by the ruling, because they were implemented using a different law.
The two consolidated cases before the high court, Learning Resources v. Trump and Trump v. V.O.S. Selections, were appealed after a trio of losses for the Trump administration in two federal district courts and one federal appeals court.
In their arguments to the Supreme Court, The Justice Department defended the president’s signature economic policy as a matter of Trump exerting his foreign policy, arguing in a brief that striking down the tariffs as unlawful would “effectively disarm the President in the highly competitive arena of international trade.”
The companies suing over the tariffs argued they were unlawfully implemented, and that IEEPA does not grant the president the power to tariff, noting that the term “tariff” is not present in the text of statute.
Chief Justice John Roberts grappled with how the imposition of the sweeping tariffs under IEEPA balanced the president’s broad powers dealing with foreign powers and Congress’s inherent taxing power, during oral arguments.
Justice Sonia Sotomayor plainly said she did not “understand this argument” from the DOJ that the tariffs did not impose a tax, a power given to Congress under the constitution, during the November arguments, while Justice Neil Gorsuch expressed concern over future uses of such a sweeping tariff power.
After oral arguments, the Trump administration projected confidence over the case, but also stated it could recreate most of the sweeping tariffs by using other laws if the high court struck down the ones levied using IEEPA.
The ruling marks the first in a set of cases the Supreme Court will decide this term slated to deal with the president’s powers and policies. The high court will also issue ruling in the coming months with implications for the president’s firing power within the executive branch and Trump’s executive order regarding birthright citizenship.
This is a breaking story and will be updated.