This is fantastic news. These tariffs were clearly unconstitutional. Only Congress can raise taxes. Article 1, Section 7 says, "All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills." That is pretty clear. The International Emergency Economic Powers Act authorizes the U.S. President to regulate or prohibit international commerce and freeze foreign assets after declaring a national emergency in response to an "unusual and extraordinary threat" to national security, foreign policy, or the economy. It does not mention tariffs.
Not only were the Trump Tariffs enacted under the International Emergency Economic Powers Act uncontitutional but they were also economically foolish. Trump consistently said foreigners pay the tariffs. That is just blatantly false. I am not sure if Trump is just a compulsive liar or if he is a total economic illiterate who really believes false things. Either way, he was wrong. The tariffs are paid by the importer and, like any other business cost, are passed along to the consumer. The only way the consumer does not end up paying the full cost of the tariffs is if the exporters are willing to make less money by lowering their cost, or the importers are willing to make less money by not passing on the full amount of the tariffs. While companies can rationally decide to eat the cost of a tax increase, profit margins are small on almost everything, and the amount of a tax the seller can eat is limited. On a mix of imports, 90% to 100% of the cost was passed on to consumers. As of 2026, increased tariffs are estimated to cost the average U.S. household over $1,300 annually.
Not only were the Trump Tariffs unconstitutional and economically foolish and costly to the American consumer, but they also had the opposite effect of returning manufacturing to America and creating good-paying American jobs. While some sectors did increase manufacturing in the US to avoid the tariffs, other producers fled the United States to avoid paying the import tax on the components that go into the products they produce. Data shows a net negative impact on manufacturing employment, with reports of over 70,000 jobs lost in the sector between April and December 2025.
Another negative to Trump Tariffs was the chaos they produced. A foreign leader could make Trump feel disrespected by doing something like putting out an advertisement showing President Ronald Reagan speaking on the benefits of free trade, or a foreign leader could speak out against US policy to annex Greenland at some international conference, and Trump would throw a temper tantrum and increase the tariffs on imports from that country. The Trump Tariffs were on again-off again, often making it difficult for producers to set prices or make decisions.
When the case was first heard, I read and listened to some of the proceedings, and based on the justices' questioning, I was almost certain the Court would rule the way it eventually did and find the tariffs unconstitutional. The Court waited so long to issue this ruling, however, that I was beginning to think the Court might rule the other way. While the Court should, in my view, consider only the merits of a legal matter before them, justices do live in the real world, and I feared that they may reason that if they ruled against the tariffs, then the revenue collected by the tariffs would have to be refunded and this would create chaos. I am always pleased when the Courts uphold the Constitution, regardless of the chaos or public opinion.
So what now? It is too early to know. Importers may sue for a return of the tax they paid the government. If they successfully earn the right to a refund, will the refund be passed on to consumers who ultimately paid the tax, or will importers pocket the money? How will the government deal with the hole this shoots in revenue projections? How will Trump respond? Not all of the tariffs are unconstitutional. Some were collected under a different authority. Those will remain in effect, and Trump may impose some of these same tariffs under different authorities. To impose most of the tariffs, Trump will have to go to Congress for authorization.
Republicans have long been the party of free trade. Free enterprise and free trade have been bedrock Republican positions. Of course, we have witnessed that most Republicans will put loyalty to Trump above principles. However, legislating a trade war will be too far for some Republicans to go. While they could not muster the courage to oppose and call out Trump for his tariff policy, all they had to do to please Trump was be passive and let it happen. It is one thing to passively accept a bad policy and another to positively enact it. To pass new tariffs would mean holding Republican feet to the fire. If no Democrats vote with Republicans for additional tariff authority, it only takes two Republican votes against new tariffs for them to fail. Also, Trump's poll numbers are falling, and Republican willingness to stand up to Trump seems to have an inverse relationship to Trump's popularity. I suspect the weaker Trump becomes, the more Republicans will develop a backbone. The timing for this decision seems right. The wait was worth it.
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