US Supreme Court rules Trump’s sweeping global tariffs are illegal

BY Michael Koziol

Washington: The United States Supreme Court has ruled Donald Trump’s sweeping global tariffs are illegal, upending the president’s signature economic initiative, opening the door to billions of dollars in refunds and creating a “complete mess”, in Trump’s words.

The 6-3 majority ruling was handed down Friday morning (Washington time) and found Trump exceeded his powers as president. The framers of the US Constitution gave “Congress alone” the power to impose tariffs during peacetime, the majority found.

Trump called a news conference and branded the decision “incorrect”, “terrible” and “deeply disappointing”. He claimed the court had been “swayed by foreign interests”, without explaining what he meant by that.

“It’s a ridiculous decision,” he said. “Foreign countries that have been ripping us off for years are ecstatic. They’re dancing in the streets – but they won’t be dancing for long, I can assure you.”

The court’s ruling pertained only to the so-called “reciprocal tariffs” Trump levied using his emergency powers. Other tariffs he has imposed, such as sectoral tariffs on steel and aluminium, are unaffected.

Trump said he would immediately impose a 10 per cent global tariff using Section 122 of the Trade Act of 1974, which allows him to impose temporary levies up to 15 per cent for up to 150 days, unless extended by Congress. The US would also begin trade practices investigations with a view to imposing other sectoral tariffs.

“We have other ways, numerous other ways,” the president said. “It takes a little more time, but the end result is going to get us more money.”

Trump personally criticised the Supreme Court justices who struck down the tariffs - particularly those he appointed in his first term, Neil Gorsuch and Amy Coney Barrett, saying he was “ashamed” of them.

“I think it’s an embarrassment to their families, the two of them,” he said. Meanwhile, the three justices who ruled to uphold the tariffs showed “great strength and wisdom” - particularly his appointee Brett Kavanaugh, whose dissenting opinion Trump repeatedly cited.

The Supreme Court decision to strike down Trump’s central economic policy is the biggest blow to his authority to date. It represents a rare curb on presidential power from the nation’s highest court.

In a majority opinion written by Chief Justice John Roberts, the court ruled: “When Congress has delegated its tariff powers, it has done so in explicit terms and subject to strict limits.

“Against that backdrop of clear and limited delegations, the government reads [the emergency powers laws] to give the president power to unilaterally impose unbounded tariffs and change them at will. That view would represent a transformative expansion of the president’s authority over tariff policy.

“It is also telling that in [that law’s] half century of existence, no president has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope.”

In his dissent, Kavanaugh said it was nonsensical to find that the president had the power to block imports from a country but not to raise revenue with tariffs. He noted courts had upheld tariffs imposed by Richard Nixon using previous emergency laws.

“The tariffs at issue here may or may not be wise policy. But as a matter of text, history, and precedent, they are clearly lawful,” Kavanaugh found.

Australian exports to the US were hit with a 10 per cent tariff – effectively the lowest rate Trump applied to any country – which the Australian government opposed. Prime Minister Anthony Albanese said at the time it was “not the act of a friend”.

Trump asserted in a Truth Social post last month that it would take years to figure out how to repay the tariffs if the court found they were unlawful. He said countries and companies would demand “payback” for investments they were making in the US to avoid his tariffs.

“When these Investments are added, we are talking about Trillions of Dollars! It would be a complete mess, and almost impossible for our Country to pay,” he said last month.

The Tax Foundation, a non-partisan, Washington-based think tank, estimated the reciprocal tariffs have raised $US160 billion to date, and would have raised $1.4 trillion by 2035.

At Friday’s news conference, Trump made no commitments about returning the money that has already flowed into US government coffers. He criticised the Supreme Court for not issuing an order on that matter, and predicted a long period of litigation. “We’ll end up being in court for the next five years,” he said.

Share markets rose upon the ruling, with the Dow Jones up more than 100 points at midday, New York time.

Trump’s tariff agenda was aimed at reducing the US’s long-standing trade deficit. But figures released by the Department of Commerce on Thursday showed the deficit barely changed in 2025, coming in at $US901.5 billion ($1.28 trillion).

The administration has previously insisted it can rebuild the tariff mosaic using laws other than the one struck down by the Supreme Court.

National Economic Council director Kevin Hassett has said meetings were held to discuss alternative legal means to reproduce the president’s international tariff deals, which could begin immediately.

“Our expectation is that we’re going to win, and if we don’t win, then we know that we’ve got other tools that we could use that get us to the same place,” Hassett told CNBC television last month.

https://www.smh.com.au/world/north-america/us-supreme-court-rules-donald-trump-s-sweeping-global-tariffs-are-illegal-20260115-p5nu5t.html

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