Supreme Court of the United States issued a landmark 6-3 ruling in Trump v. V.O.S. Selections, Inc., officially declaring that President Trump lacked the legal authority to impose his sweeping “Liberation Day” global tariffs under the International Emergency Economic Powers Act (IEEPA).
The decision is a major constitutional check on executive power, asserting that the authority to levy taxes and tariffs belongs exclusively to Congress.
The Ruling: Key Takeaways
- The Verdict: The Court ruled that the IEEPA, a 1977 law intended for national emergencies, does not grant the President the power to impose revenue-raising tariffs.
- Constitutional Basis: Chief Justice John Roberts, writing for the majority, emphasized that Article I of the Constitution vests the “power of the purse”—including the power to tax and set duties—firmly in the hands of Congress, not the Executive Branch.
- Major Questions Doctrine: The Court applied this legal principle, stating that when the President takes an action of such “vast economic and political significance,” they must have clear, explicit authorization from Congress. The majority found that the IEEPA’s language to “regulate importation” was too vague to justify trillions of dollars in new taxes.
The Judicial Split
The ruling featured a rare cross-ideological coalition:
- The Majority (6): Chief Justice John Roberts was joined by the three liberal justices (Sotomayor, Kagan, Jackson) and two Trump appointees, Neil Gorsuch and Amy Coney Barrett.
- The Dissent (3): Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh dissented, arguing that the President should have broad flexibility to use tariffs as a tool of foreign policy and national security.
Immediate Fallout & The “Revenge” Tariff
President Trump reacted with an unusually sharp rebuke, calling the justices who voted against him a “disgrace” and “disloyal to the Constitution.” However, he moved almost immediately to keep his trade agenda alive:
- Section 122 “Surcharge”: Within hours of the ruling, Trump signed a new executive order imposing a 10% temporary global import surcharge under Section 122 of the Trade Act of 1974.
- The 150-Day Limit: Unlike his previous tariffs, Section 122 has a strict 150-day limit and a 15% cap, meaning this new baseline will likely expire or require renewal by late July 2026.
- Surviving Tariffs: The ruling does not affect tariffs imposed under other laws, such as Section 232 (National Security) or Section 301 (Unfair Trade Practices), which remain in full effect.
The “Billion-Dollar Mess”: Refunds?
The Supreme Court did not provide a framework for what happens to the estimated $134 billion already collected in IEEPA duties since 2025.
- Complex Litigation: Justice Kavanaugh warned in his dissent that the refund process will likely be a “mess” and could take years of further litigation in the Court of International Trade.
- Business Impact: Importers who paid these now-illegal duties are expected to file massive class-action lawsuits for reimbursement, though the government has not yet announced a formal refund process.
Impact on the India-U.S. Trade Deal
Despite the ruling, President Trump clarified that the parameters of the recently signed Interim Trade Agreement with India (which lowered some tariffs to 10%) remain unchanged.
“Nothing changes. They’ll be paying tariffs, and we will not be paying tariffs.” — President Donald Trump, Feb 20, 2026.
