President Donald Trump paid a price for going it alone on tariffs, as the Supreme Court on Friday delivered a rare rebuke, ruling that he lacked the power to declare an economic emergency and impose sweeping new taxes on imports.
Trump had made tariffs the bedrock of his economic pitch to voters ahead of the midterm elections, even describing tariffs as his “favourite word in the dictionary.” He promised that factories would relocate from overseas and bring jobs with them, and he warned that losing the tariffs could plunge the US into a deep recession.
However, Friday’s ruling is likely to prolong political and economic uncertainty over international trade through the election year.
Trump reacts strongly to court ruling
Trump called the decision “a disgrace” after he was handed a note informing him of the ruling during a private meeting with several governors, according to two people familiar with his reaction who spoke on condition of anonymity. Another person briefed on the conversation said Trump remarked that he would “have to do something about these courts.”
The meeting with the governors ended shortly after Trump learned of the decision. He is expected to address the ruling publicly during an afternoon press conference.
Republican strategist Doug Heye said it was immediately clear that the president “is not going to be happy” about the decision.
“We’re starting to hear that this is a massive blow, a massive repudiation,” he said.
However, Heye added that Trump would likely look for another way to pursue his trade agenda.
“Are they going to be able to figure out how to use this as an opportunity or not?” he asked. “There are too many questions.”
White House explores alternative legal routes to maintain tariffs
The White House plans to use alternative laws to preserve the tariffs, but those policies could prolong the debate and keep alive an issue that is largely unpopular with voters.
About six in 10 Americans said Trump had gone too far in imposing new tariffs on other countries, according to an AP-NORC poll conducted in January.
Even more concerning for a president elected on promises to address affordability, 76 per cent said in a poll conducted last April that Trump’s tariff policies would increase the cost of consumer goods in the US.
Trump’s aggressive use of tariffs had left many Republican lawmakers uneasy, both publicly and privately, forcing them to defend what were essentially tax increases on American consumers and businesses.
At various points during Trump’s second term, at least seven senators from his party voiced concerns. Earlier this month, six House Republicans joined Democrats in voting for a resolution opposing Trump’s tariffs on Canada.
Free trade had long been a central plank of the Republican Party before Trump’s rise to power.
Former Vice President Mike Pence, who served during Trump’s first term, praised the Supreme Court ruling as a victory for the public, the constitutional separation of powers and free trade.
“American families and American businesses pay American tariffs — not foreign countries,” Pence wrote on social media. “With this decision, American families and businesses can breathe a sigh of relief.”
Democrats highlight Supreme Court ruling as rebuke to Trump’s tariffs
Democrats were quick to seize on the opportunity presented by the ruling. Rep. Suzan DelBene, D-Wash., said Trump “is not a king” and that his “tariffs were always illegal.”
“Republicans in Congress could have easily ended this economic crisis by standing up for their communities,” said DelBene, chair of the Democratic Congressional Campaign Committee. “Instead, they chose to bend the knee to Trump while families, small businesses and farmers suffered from higher prices.”
The ruling allows Trump’s critics to argue that he broke the law and that middle-class families suffered as a result.
Still, Trump has maintained that his tariffs were the difference between national prosperity and deep poverty, a message he repeated Thursday night to voters in the swing state of Georgia.
The president used the word “tariff” 28 times during his speech at a Georgia steel company, Coosa Steel, which credited the import taxes with making its products more competitive against goods from China.
Trump defends tariffs, warns country would face economic trouble without them
“Without tariffs, this country would be in such trouble right now,” Trump said.
He also complained that he had to justify his use of tariffs to the Supreme Court.
“I have to wait for this decision. I’ve been waiting forever, forever, and the language is clear that I have the right to do it as president,” he said. “I have the right to put tariffs on for national security purposes, against countries that have been ripping us off for years.”
By a 6–3 vote, the high court disagreed.
The president has consistently misrepresented his tariffs, claiming — despite evidence to the contrary — that foreign governments would pay them and that the revenues would be sufficient to reduce the national debt and provide taxpayers with dividend checks.
New research linked to one of America’s leading banks found that tariffs paid by midsize US businesses tripled over the past year.
The additional costs meant that companies employing a combined 48 million people in the US — the types of businesses Trump had promised to revive — had to absorb the expense by passing it on to customers through higher prices, reducing their workforce or accepting lower profits.
Trump’s tariffs — not all of which were overturned — were expected to generate USD 3 trillion in revenue over 10 years, according to the Congressional Budget Office. While substantial, that amount would still be insufficient to cover projected deficits.
The Supreme Court has not ruled on how any refund process would work.
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