BREAKING: Supreme Court BLOCKS Trump's Tariffs

The Supreme Court, in a 6-3 decision, struck down the 'liberation day tariffs' that former President Trump imposed using claimed emergency authority. The ruling found that the executive branch overstepped its constitutional bounds by asserting an extraordinary power to set tariff levels without explicit congressional authorization, violating the 'power of the purse' and the 'major questions doctrine.'

Host Andrew Edgar and economics editor Katherine Mangu-Ward discuss the Supreme Court's decision, noting it was 'expected to be clear' (01:37) and that the justices ruled on the 'major questions doctrine' and the specific law used to justify the tariffs (02:06). Chief Justice Roberts' opinion is quoted: 'The president's assertion here of broad statutory power over the national economy is extravagant by any measure' (22:22).

The Supreme Court punted on the issue of what happens to the estimated $175 billion in tariffs already collected from businesses. This leaves companies in limbo, many of whom absorbed these costs and delayed price increases in anticipation of a refund. The matter has been sent back to the Court of International Trade, prolonging the uncertainty for small and medium-sized businesses.

Katherine Mangu-Ward states, 'They punted however on what happens to all of the tariffs that have already been collected. And there is a lot of money on the line. That's about $175 billion' (02:41). She also mentions businesses 'have been trying to temporarily absorb the cost of those tariffs in the hopes that the Supreme Court was going to give the money back to them' (16:17).

Despite the Supreme Court's ruling, the Trump administration has signaled its intent to reconstitute similar tariffs using other existing legal authorities. These alternative authorities (e.g., Sections 122, 301, 201, 232) are more constrained by procedural requirements like public hearings and specific criteria (e.g., unfair practices, sudden import increases, national security), making it harder for the president to impose them unilaterally and quickly.

Andrew Edgar asks, 'Do these stay up because the White House has promised that even if these particular authorities were overturned, they might try to get basically the same tariff regime in place in another way' (05:15). Katherine Mangu-Ward details various other powers: 'Section 122 allows the president to impose 15% tariffs on imports for 150 days... Section 301 is something about unfair practices... safeguard tariffs under section 201... section 232 about national security' (07:28).

The constant imposition and removal of tariffs, along with the lingering uncertainty, have created significant economic inefficiencies and chaos for businesses. Companies have spent considerable resources scrambling and unscrambling supply chains, delaying investments, and holding off on price adjustments, impacting both their profitability and consumer prices.

Andrew Edgar highlights 'the inefficiencies that are created by the chaos of having tariffs being slapped on and pulled off and slapped on and pulled off' (04:18). Katherine Mangu-Ward notes companies 'have been scrambling and unscrambling and cancelling and uncancelling supply chains and orders and everything else' (08:51).