Editor's note: This story has been updated with President Donald Trump's policy response to the court's decision.
In a 6-3 ruling handed down Friday morning, the Supreme Court determined that President Donald Trump exceeded his authority when imposing the sweeping trade tariffs that have become a cornerstone of his administration’s foreign and economic policy.
Despite the top court's rebuke, the president has made it clear he doesn't intend to walk away from the levies. Friday evening, Trump signed orders imposing 10% tariffs for 150 days on most imported goods under separate statute that he said the following day would be raised to 15%. Pharmaceuticals and pharmaceutical ingredients are among the goods exempted from the temporary duty, according to the order.
The prior tariffs struck down by the court were championed by Trump to address two issues he declared as national emergencies early in his second term: drug trafficking and major trade deficits. He then invoked his authority to respond to the national emergencies under the 1977 International Emergency Economic Powers Act (IEEPA) to justify the tariffs.
Trump initially imposed tariffs on China, Mexico and Canada, but expanded the policy with “reciprocal” tariffs unveiled against numerous countries in April. Both collections of tariffs have been subject to various pauses and adjustments over the past year, often in response to trade or policy negotiations.
However, in a challenge to the policy that escalated to the top court, justices ruled that IEEPA did not grant Trump that authority.
"Absent from this lengthy list of specific powers [outlined in IEEPA] is any mention of tariffs or duties," Chief Justice John Roberts wrote in the court's opinion. "Had Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly, as it consistently has in other tariff statutes."
The decision is likely to be celebrated in the healthcare and life sciences sectors, which frequently warned the administration of the substantial impact such policies could have on supply purchases. Those could range from higher prices for hospitals and consumers to difficulty securing necessary equipment, industry groups said while seeking exemptions.
In earnings calls and commentary, several major health systems and group purchasing organizations have said they've been able avoid the brunt of the levies to date. This is due to the multiyear contracts with locked rates that were still in effect, and ongoing efforts to shift purchasing to manufacturers in the U.S. or other countries with lower tariff rates.
Historically, IEEPA has allowed administrations to impose sanctions or limit specific deals or investments. Trump was the first president to employ IEEPA for tariffs on imported goods. The administration had been permitted to maintain the tariffs pending SCOTUS’ decision, and the Customs and Border Protection agency said in its most recent estimates that $142 billion will have been collected from those tariffs through 2025.
Roberts noted that the Trump administration's interpretation of IEEPA would "represent a transformative expansion of the President's authority over tariff policy," and disagreed with the administration's argument pinpointing specific, non-adjacent words in the law's text in the law's text to carry its position.
"Based on two words separated by 16 others in … IEEPA—‘regulate’ and ‘importation’—the president asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time. Those words cannot bear such weight," he wrote.
Liberal justices Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson agreed with the chief justice that the tariff policy wasn't supported by the IEEPA's text, and had violated the "major questions" doctrine that requires Congress make explicit its delegation of powers. Justices Neil Gorsuch and Amy Coney Barrett joined the part of the chief's opinion centered on the major questions doctrine.
Conservative justices Brett Kavanaugh, Clarence Thomas and Samuel Alito dissented.
Of note, the court’s decision does not explicitly address a standing question hanging over tariff repeal: whether companies are permitted to seek the additional funds they paid under the invalidated levies, an issue often cited by the president's team and raised by Kavanaugh in his dissent.
"The United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others," the justice wrote. "As was acknowledged at oral argument, the refund process is likely to be a 'mess.'
"Although I firmly disagree with the Court’s holding today," Kavanaugh wrote elsewhere in the dissent, "the decision might not substantially constrain a President’s ability to order tariffs going forward. That is because numerous other federal statutes authorize the President to impose tariffs and might justify most (if not all) of the tariffs at issue in this case—albeit perhaps with a few additional procedural steps that IEEPA, as an emergency statute, does not require,” the justice wrote alongside a list of federal statutes that he said could be used to justify the president's tariffs.
Trump, in a press conference and Friday afternoon social media posts, railed against the Supreme Court's decision and said he believes its members—referred to as "FOOLS" and LAPDOGS"—have been swayed by foreign interests and a minority political movement.
He went on to applaud the dissenting justices and said he would be using Kavanaugh's suggested statutes to maintain the duties.
"Effective immediately, all National Security TARIFFS, Section 232 and existing Section 301 TARIFFS, remain in place, and in full force and effect," Trump wrote in the online post. "Today I will sign an Order to impose a 10% GLOBAL TARIFF, under Section 122, over and above our normal TARIFFS already being charged, and we are also initiating several Section 301 and other Investigations to protect our Country from unfair Trading practices."
Several hours later the president made good on his promise, signing executive orders that repealed the IEEPA tariffs but instructed the 10% duty to take effect beginning Feb. 24 and last 150 days—the maximum under Section 122. The following day, he wrote on social media that those blanket tariffs would be bumped up to up to 15%, also the maximum under that statute. A list of exempted goods outlined in the order included "pharmaceuticals and pharmaceutical ingredients"
Another order also citing Section 122 authority extended the suspension of the so-called "de minimis loophole" allowing shipments under $800 to be duty-free. The president also directed his administration to begin the investigations into other countries' practices required to impose other tariffs under Section 301.