The Supreme Court just handed President Trump one of the most consequential losses of his presidency — and it wasn’t even close.
In a sweeping 6-3 decision delivered Friday morning, the Court ruled that Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs on nearly every country on Earth was flatly unconstitutional. Chief Justice John Roberts didn’t mince words: the law “does not authorize the President to impose tariffs.” No president in American history had ever used IEEPA this way, the majority noted, and this one doesn’t get to be the first.
The practical fallout is staggering. The IEEPA tariffs generated more than $130 billion in government revenue last year alone. Under the ruling, the U.S. could be on the hook to refund up to $175 billion to importers, according to the Penn Wharton Budget Model. Even dissenting Justice Brett Kavanaugh acknowledged the refund process would be a “mess” — and he wasn’t wrong.
Markets, true to form, barely flinched. The S&P 500 was up 0.5% midday Friday, and analysts were quick to explain why: Wall Street had already priced this in. The lower courts had ruled the tariffs illegal months ago, and most traders assumed the Supreme Court would agree. The real question was always about what comes next.
And that’s where it gets interesting. Trump has already signaled he’ll try to reimpose tariffs through other legal mechanisms. Congressional Republicans are exploring legislative routes to codify some version of the duties. The tariff saga isn’t over — it’s entering a new chapter. But the era of one man imposing sweeping trade levies on the entire planet by executive decree? That chapter just closed.
For investors, the calculus is straightforward. Importers — especially in retail, footwear, auto parts, and consumer electronics — just got a massive weight lifted. The Footwear Distributors and Retailers of America called the ruling “an important step toward creating a more predictable and competitive environment.” Translation: margins are about to get a lot healthier for anyone who’s been eating 25-145% tariff costs for the past year.
Watch the import-heavy names. The tariff tax just died. The refund checks might be next.