The Supreme Court struck down some of President Donald Trump’s most far-reaching global tariffs on Friday, handing him a significant loss on an issue crucial to his economic agenda.
The 6-3 decision centers on tariffs imposed under an emergency powers law, including the sweeping “reciprocal” tariffs he levied on nearly every other country starting last April.
It’s the first major piece of Trump’s broad agenda to come squarely before the nation’s highest court, which he helped shape with the appointments of three conservative jurists in his first term.
Trump is vowing to use other tools to assert his trade agenda, including imposing a temporary import tax starting Tuesday, according to a proclamation signed late Friday.
The Oregon Department of Justice led a coalition of a dozen states that sued over the president’s signature trade strategy.
The state’s Deputy Attorney General Benjamin Gutman argued before the Supreme Court in November that only Congress, not the president, has the power to impose and collect taxes under the U.S. Constitution.
Oregon Attorney General Dan Rayfield told reporters on Friday that 80% of the cost of tariffs is passed on to consumers.
“These have never been paid by foreign countries,” Rayfield said. “This has never been the case. They have, and they always will be, paid by Americans and our businesses.”
Dissenter says fallout will be a ‘mess’
The Supreme Court majority found that the Constitution “very clearly” gives Congress the power to impose taxes, which includes tariffs.
“The Framers did not vest any part of the taxing power in the Executive Branch,” Chief Justice John Roberts wrote.
Justices Samuel Alito, Clarence Thomas and Brett Kavanaugh dissented.
“The tariffs at issue here may or may not be wise policy,” Kavanaugh wrote. “But as a matter of text, history, and precedent, they are clearly lawful.”
The majority did not address whether companies could get refunded for the billions they have collectively paid in tariffs. Many companies, including the big-box warehouse chain Costco, have already lined up to demand refunds in lower courts. Kavanaugh noted the process could be complicated.
“The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers. But that process is likely to be a ‘mess,’ as was acknowledged at oral argument,” he wrote.
Damage to supply chains
Trump set what he called “reciprocal” tariffs on most countries in April 2025 to address trade deficits that he declared a national emergency. Those came after he imposed duties on Canada, China and Mexico, ostensibly to address a drug trafficking emergency.
A series of lawsuits followed, including the case from Oregon and other largely Democratic-leaning states and others from small businesses selling everything from plumbing supplies to educational toys to women’s cycling apparel.
The challengers argued the emergency powers law doesn’t even mention tariffs and Trump’s use of it fails several legal tests, including one that doomed then-President Joe Biden’s $500 billion student loan forgiveness program.
A state like Oregon is especially sensitive to swings in federal trade policy. Trade helps fuel the state economy. Last year, companies operating in the state imported more than $28 billion worth of parts and finished products, and exported over $34 billion to global markets.
Emily Smith works for importer Hacea Coffee Company. Until November, coffee was subject to at least a 10% tariff.
“Coffee has to be grown in very special conditions,” Smith said, “And those are conditions that do not occur in the United States other than in small spots like Hawaii and Puerto Rico. So, Hawaii and Puerto Rico are able to produce about 26 million pounds of coffee each year, but the US consumption and US demand for coffee is closer to 3.6 billion pounds of coffee.”
That means more than 99% of raw coffee is imported into the country, Smith said. The biggest crop often comes in over the summer.
“A lot of the coffee that’s currently in the United States being purchased by coffee roasters was all tariffed,” Smith said. “Tariffs were paid on it, and have been passed through to the roaster. And they’re still paying tariffs on those coffees.”
Smith said Hacea Coffee Company kept track of how much they were paying in tariffs, and passed on the entire amount to roasters. If the tariff money is refunded – which Smith acknowledges is a big “if” – Hacea will send the refund to roasters.
Not the end of tariffs
The tariffs decision doesn’t stop Trump from imposing duties under other laws. While those have more limitations on the speed and severity of Trump’s actions, top administration officials have said they expect to keep the tariff framework in place under other authorities.
Britt Howard is the owner of Portland Garment Factory and Oregon Natural Fiber Mill. Her companies manufacture clothing, mattresses and other goods in Portland.
Howard says tariffs and the chaos around them contributed to a tough 2025 for her businesses – and she’s apprehensive about how the tariff situation will shift.
“I also feel worried that something could change,” Howard said. “I’m happy that it’s likely that this is what it is for now – but it creates so much uncertainty that it’s distrustful and it’s frustrating.”
A loss for Trump
The Supreme Court ruling comes despite a series of short-term wins on the court’s emergency docket that have allowed Trump to push ahead with extraordinary flexes of executive power on issues ranging from high-profile firings to major federal funding cuts. Some lower court rulings with relevance in Oregon have gone against the Trump administration, such as a decision blocking National Guard troops that the federal government decided not to appeal.
The Republican president has been vocal about the tariff case, calling it one of the most important in U.S. history and saying a ruling against him would be an economic blow to the country. But legal opposition crossed the political spectrum, including libertarian and pro-business groups that are typically aligned with the GOP. Polling has found tariffs aren’t broadly popular with the public, amid wider voter concern about affordability.
The Constitution gives Congress the power to levy tariffs. But the Trump administration argued that a 1977 law allowing the president to regulate importation during emergencies also allows him to set tariffs. Other presidents have used the law dozens of times, often to impose sanctions, but Trump was the first president to invoke it for import taxes.
The economic impact of Trump’s tariffs has been estimated at some $3 trillion over the next decade, according to the Congressional Budget Office.
The Treasury had collected more than $133 billion from the import taxes the president has imposed under the emergency powers law as of December, federal data shows.