In a major blow to President Donald Trump’s economic agenda, the US Supreme Court has struck down his sweeping “Liberation Day” global tariffs, ruling that he exceeded his authority by imposing them under a law reserved for national emergencies.
By a 6-3 majority, the justices held that Trump improperly relied on the International Emergency Economic Powers Act of 1977 to enact broad import taxes without congressional approval. The court made clear that while the statute allows the president to regulate certain economic transactions during a declared emergency, it does not authorize the unilateral imposition of tariffs. The power to levy taxes on imports, the court emphasized, rests with Congress.
Check on Executive Power
The ruling represents a significant judicial check on the expansive use of executive authority. Trump, a longtime advocate of tariffs, argued that taxing imported goods would boost American manufacturing, reduce trade deficits, and strengthen domestic industry.
Many in the business community, as well as Trump’s political adversaries, rejected that argument, warning that the tariffs increased costs for companies and consumers while disrupting global supply chains.
The court’s decision specifically applies to the so-called “Liberation Day” tariffs — sweeping duties imposed on goods from a wide range of US trading partners. It does not affect separate, country-specific or product-specific tariffs enacted under other statutory authorities.
Financial markets responded quickly. Wall Street rose in early trading after the ruling, reflecting investor optimism that easing trade barriers could reduce uncertainty and improve global trade flows.
Impact on India
The ruling could carry meaningful implications for India, one of the United States’ key trading partners. If the “Liberation Day” tariffs included broad duties affecting Indian exports, sectors such as pharmaceuticals, engineering goods, textiles, auto components, and information technology hardware could benefit from reduced trade friction.
Indian exporters had faced higher compliance costs and pricing pressures under sweeping tariff regimes. The court’s decision may improve predictability in US trade policy, a factor crucial for long-term supply contracts and investment planning.
However, any India-specific or product-specific tariffs imposed under separate legal provisions would remain unaffected. Trade experts say the judgment may also create space for more structured, congressionally backed trade negotiations between Washington and New Delhi rather than unilateral executive actions.
How the Case Reached the Court
The Supreme Court upheld earlier lower court rulings that Trump had overstepped his authority. The legal challenge was brought by businesses affected by the tariffs, along with 12 US states, most governed by Democrats. They argued that the president’s unprecedented use of an emergency law to impose broad import taxes violated the constitutional separation of powers.
The decision is expected to shape future debates over presidential power in trade policy and could influence how emergency economic laws are interpreted in the years ahead.