Yicai reporters reviewed the ruling document released by the U.S. Supreme Court on Friday. In it, the Court stated: “Our task today is only to decide whether the President’s authority under IEEPA to ‘regulate… imports’ includes the power to impose tariffs. The answer is no.”

 

The case was brought by several U.S. business groups, joined by 12 states, who claimed the tariffs harmed their interests. The Trump administration announced the so-called “reciprocal tariffs” in April last year, triggering weeks of turmoil in financial markets and raising concerns among U.S. allies.

 

Previously, markets had suspected the U.S. Supreme Court was delaying the ruling, with longer delays seen as potentially favoring the Trump administration. However, Du Ming, Deputy Dean of the Law School, Professor of Transnational Law, and Co-Director of the Global Policy Institute at Durham University in the UK, recently told Yicai: “There is little room for legal dispute. The Court may delay its ruling, but the Trump administration will almost certainly lose.”

 

He also warned reporters that even if the Trump administration loses in the Supreme Court, it may reimpose tariffs through other statutes.

 

 

 

Under the Supreme Court’s ruling, the large-scale tariffs Trump imposed on most U.S. trading partners in 2025 using IEEPA are illegal.

 

Specifically, the Supreme Court ruled 6–3 that the Trump administration exceeded presidential authority when imposing these import duties. The decision invalidates all tariffs Trump imposed under IEEPA.

 

According to an analysis by UBS Group, these account for approximately 75% of all tariffs Trump imposed last year, including the so-called “reciprocal tariffs” on goods imported from most economies around the world.

 

The ruling preserves tariffs on specific goods such as automobiles and steel, however, as those duties were imposed under a separate authority: Section 232 of the Trade Expansion Act of 1962.

 

“The President does not have inherent authority to impose tariffs in peacetime,” the ruling stated. “Instead, the challenged tariffs depend entirely on IEEPA for their legitimacy.”

 

The U.S. Supreme Court sided with Learning Resources Inc., a company that produces educational materials, which sued the government last year, arguing that IEEPA did not grant Trump the power to impose tariffs at will.

 

The decision once again casts U.S. trade policy into uncertainty. Before the ruling, the Trump administration vowed to reimpose tariffs under different legal authorities if the Court struck them down. U.S. Trade Representative Greer said last month the administration would begin work to restore tariffs “starting the day after” the ruling.

 

It remains unclear how quickly Trump will impose new tariffs, or whether the new rates will be as high as before.

 

Trump’s import duties have significantly impacted the U.S. and global economies. They have slowed global growth, weighed on the U.S. labor market, and put upward pressure on inflation. Furthermore, because importers passed costs to consumers, the tariffs also strained household finances. According to an analysis by the Yale Budget Lab, this has caused the average household to lose $1,681 per year.

 

Objectively, however, the $216 billion in revenue generated by tariffs in fiscal year 2025 did reduce part of the U.S. government’s fiscal deficit. The U.S. deficit for FY2025 finished at $1.78 trillion, down from $1.84 trillion in 2024.

 

Although the Trump administration later rolled back some tariffs, by the end of 2025 the effective U.S. tariff rate still exceeded 10%, the highest level since World War II. The stock market rebounded and hit record highs in the following months, but polls show many Americans believe tariffs are hurting the national economy.

 

 

 

Before the ruling, analysts speculated about how a Trump loss would affect the economy.

 

As Du Ming warned, tariffs may eventually return in a different form. For example, Section 232 of the Trade Expansion Act allows the U.S. President to impose tariffs on specific products following a Commerce Department investigation, while Section 301 permits tariffs against countries found to engage in unfair trade practices.

 

Morgan Stanley strategists including Ariana Salvatore wrote in a commentary last month: “We have long believed the case before the Supreme Court will not change our expectations for U.S. trade policy, as the President can use a range of other powers—both temporary and permanent—to effectively replace or quickly reimpose current tariff levels.”

 

Last month, Trump said a court ruling invalidating his tariffs would cause “complete chaos,” as it would lead to lost revenue and potentially require billions of dollars in tariff refunds. He wrote on social media: “If the Court strikes down these tariffs, we are finished!”

 

James Knightley, Chief U.S. International Economist at ING Group, believes the actual amount of tariffs collected so far is too small to have a significant impact.

 

“Since April last year, tariff revenue over the past eight months has increased by $206 billion compared to fiscal 2024, but not all of this came from IEEPA tariffs—this portion is estimated at around $130 billion. It sounds large, but the U.S. is a $30 trillion-plus economy,” he said.

 

“Many companies will fear angering the President by filing for refunds, and the court process for claiming refunds can be quite cumbersome, discouraging others from following suit. Actual refunds are therefore likely to be much lower than $130 billion.”

 

He added that even if Trump loses in the Supreme Court, he may reimpose tariffs through other statutes.

 

“Given that tariffs are his signature policy, and Republican polling is not favorable ahead of the upcoming midterm elections, the administration will act quickly to reinstate tariffs through other legal avenues. The promised $2,000 tariff dividend has to be delivered somehow. This is simply moving money from one pocket to another, since Americans initially paid the tariffs and are now getting the money back, so it is hard to argue this will provide a major economic stimulus.”

 

According to calculations by Pantheon Macroeconomics, tariff revenue is currently running at $30.4 billion per month, or $364.5 billion annualized. However, these revenues have already been declining as companies find workarounds and as the Trump administration makes deals, compromises, or delays harsher measures.