NEW YORK (AP) — The Supreme Court dealt President Donald Trump a bruising loss on a cornerstone of his economic policy, striking down sweeping tariffs he imposed on nearly every country.
In its 6-3 opinion on Friday, the court ruled Trump’s attempt to use an emergency powers law to enact the levies was not valid.
Two out of three of the justices appointed by Trump joined the majority in striking down the first major piece of Trump’s second-term agenda to come before them.
Here’s what to know:
What the court ruled
Trump relied on the 1977 International Emergency Economic Powers Act, or IEEPA, as justification for a historic barrage of tariffs, even though that law contains no mention of tariffs. IEEPA, which allows the president to seize assets and block transactions during a national emergency, was first used during the Iran hostage crisis. It has since been invoked for a range of global unrest, from the 9/11 attacks to the Syrian civil war.
The president said the U.S. trade deficit were so serious, it too qualified as an emergency, a contention the high court dismissed.
“The fact that no President has ever found such power in IEEPA is strong evidence that it does not exist,” Chief Justice John Roberts wrote for the majority.
READ MORE: What happens now that the Supreme Court struck down Trump’s tariffs?
In its opinion, the justices noted the Constitution “very clearly” gives Congress, not the president, the power to impose taxes, including tariffs.
Justices Samuel Alito, Clarence Thomas and Brett Kavanaugh dissented.
“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 wrote.
What tariffs are affected
Early last year, Trump cited IEEPA to impose tariffs on America’s three biggest trading partners: Mexico, Canada and China. To justify the levies, he declared a national emergency over undocumented immigration and the trafficking of drugs like fentanyl and the chemicals made to use it.
Then in April, on what Trump billed as “Liberation Day,” he imposed “reciprocal” tariffs of up to 50% on goods from dozens of countries — and a baseline 10% tariff on just about everyone else, also using IEEPA as justification.
Trump also used IEEPA to slap steep import taxes on Brazilian imports, citing the country’s criminal prosecution of former President Jair Bolsonaro, and on India, for the country’s purchases of Russian oil.
Many of the tariffs Trump has imposed under IEEPA have seen a roller coaster of activity after their implementation — taken away, increased and reintroduced at various times in the past year.
While the Supreme Court’s decision upends many of the levies, others imposed by Trump relied on other justifications and are not affected.
Most of America’s trading partners still face steep tariffs on specific sectors, including on steel, aluminum, cars, copper, lumber, kitchen cabinets, bathroom vanities and upholstered furniture.
Businesses embrace the decision
The White House hasn’t yet responded to the ruling, but many opponents of the tariffs are cheering it.
We Pay the Tariffs, a group of small businesses that had fought the implementation of import taxes, called the decision a “tremendous victory” for companies that had been hurt by the tariffs.
“They’ve taken out loans just to keep their doors open,” the group’s leader, Dan Anthony, said. “They’ve frozen hiring, canceled expansion plans, and watched their life savings drain away to pay tariff bills that weren’t in any budget or business plan. Today, the Supreme Court has validated what we’ve been saying all along: These tariffs were unlawful from the start.”
Refunds could be ‘a mess’
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.
But the Supreme Court did not address whether the companies and individuals who paid those tariffs could be refunded. Many companies, including the big-box warehouse chain Costco, have already lined up to demand refunds in lower courts.
Kavanaugh, who dissented from Friday’s decision, 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,” Kavanaugh wrote.
