In a major setback to President Donald Trump’s trade policy, the US Supreme Court, in a 6-3 ruling, struck down sweeping global tariffs imposed under emergency powers, holding that the president exceeded his legal authority by bypassing Congress.
In its majority opinion, the court ruled that the International Emergency Economic Powers Act (IEEPA) does not grant the president unilateral authority to impose broad import tariffs, emphasizing that the Constitution clearly vests taxing powers, including tariffs, with Congress.
Reacting to the verdict, California Governor Gavin Newsom called for immediate refunds to American families and businesses for what he described as unlawfully collected tariffs.
“Time to pay the piper. These tariffs were nothing more than an illegal cash grab that drove up prices and hurt working families. Every dollar unlawfully taken must be refunded immediately — with interest,” Newsom wrote on X.
California’s role in challenging Trump tariffs
California played a central role in the legal battle, becoming the first state to challenge the tariffs in court in April 2025. The state argued that Trump’s use of emergency powers to impose sweeping tariffs without congressional approval was unlawful and economically damaging.
State officials warned the measures had a disproportionate impact on California’s vast agricultural sector, exporters, and small businesses, given its position as the largest state economy in the US.
According to estimates from Yale University’s Budget Lab and federal customs data, more than USD 130 billion to USD 142 billion was collected under the tariffs in 2025 alone. Analysts said the costs were largely passed on to consumers through higher prices, with the average American household losing an estimated USD 1,751 over the year.
The Supreme Court’s decision marked a significant victory for states, businesses, and trade groups that had challenged the tariffs, arguing they disrupted global trade relationships and imposed heavy financial burdens domestically.
Trump, however, criticised the ruling, calling it “deeply disappointing” and asserting that his administration has “very powerful alternatives” to continue protecting US trade interests. He also indicated plans to pursue other legal avenues to maintain tariffs under different statutory authorities.
