In a 6-3 decision (Learning Resources, Inc. v. Trump) on Friday, the U.S. Supreme Court ruled President Donald Trump’s “Liberation Day” tariffs under the International Emergency Economic Powers Act (IEEPA) unconstitutional, upsetting the worldwide tariff regime President Trump unilaterally imposed last April, citing emergency powers. Hours later, Trump reimposed a 10% worldwide tariff, citing a different legal provision.

“Based on two words separated by 16 others in Section 1702(a)(1)(B) of IEEPA — ‘regulate’ and ‘importation’ — the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time,” wrote Chief Justice John Roberts for the majority. “Those words cannot bear such weight.”

That part of the opinion was joined by Justices Neil Gorsuch and Amy Coney Barrett, as well as Justices Elena Kagan, Sonia Sotomayor, and Ketanji Brown Jackson, the bench’s three progressive members. Roberts, Gorsuch, and Barrett based their reasoning on the “major powers” doctrine, arguing that President Trump “must identify clear congressional authorization to exercise” what they called “the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope.” Kagan, Sotomayor, and Jackson did not join that portion of the opinion, choosing to write separately.

Justices Samuel Alito and Clarence Thomas joined a dissent by Justice Brett Kavanaugh, which argued that “tariffs are a traditional and common tool to regulate importation.” Kavanaugh went on to list other laws Trump could use as a basis for tariffs, including the Trade Expansion Act of 1962, the Trade Act of 1974, and the Tariff Act of 1930. Justice Thomas wrote a separate dissent “to explain why the statute at issue here is consistent with the separation of powers as an original matter.”

The decision affected all tariffs on specific countries, although Trump’s product-specific tariffs remain in effect. These include tariffs on steel, aluminum, copper, automobiles, trucks, buses, lumber, and wood products.

Economist Jerry Bowyer said the case’s outcome was unsurprising, given the plain text of the Constitution. “I would have been surprised if it had gone the other direction,” he said on “Washington Watch.” “Because, even though I’m not an attorney, I read the Constitution of the United States, which I believe firmly is not mainly restricted to attorneys … and it’s pretty clear.”

Bowyer referred to Article I, Section 8 of the Constitution, which vests the “Power to lay and collect … Duties” in Congress. “Whether you agree with the president’s tariff agenda or not, you have to agree with the Constitution,” he argued, “and presidents are not allowed to gin up taxes out of thin air or even get rid of them out of thin air.”

Overturning such a consequential policy after months of operation means the Learning Resources ruling may have unusually large ramifications for the federal government. In particular, “The United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs,” Kavanaugh noted.

Through December 14, the U.S. government had collected nearly $134 billion through IEEPA tariffs. At least 1,000 firms have now sued to recoup the tariffs they paid. “The administration’s only responsible course of action now is to establish a fast, efficient, and automatic refund process that returns tariff money to the businesses that paid it,” stipulated We Pay the Tariffs, a small business coalition. “It has to be given back,” Bowyer estimated. “The Supreme Court basically said, ‘Hey, federal government, you overtaxed Americans. Give it back.’ … Seems to me like that’s a good thing.”

“A second issue is the decision’s effect on the current trade deals,” Kavanaugh added. “Because IEEPA tariffs have helped facilitate trade deals worth trillions of dollars — including with foreign nations from China to the United Kingdom to Japan, the court’s decision could generate uncertainty regarding various trade agreements.”

However, the ruling “certainly doesn’t impact [those deals] directly,” Bowyer cautioned. “It might be that the other countries say, ‘Well, we did it because we thought you had tariff power, and so we gave you the deal that you wanted, and so we’re going to go back on that deal.’ I don’t think they’re going to do that. I think that most of the world is afraid of Donald Trump.”

At the end of the day, he added, “I don’t mind the world respecting us a little more and seeing a president who is resolute … and I wouldn’t want it to change any of those deals. Most of that was decreasing trade taxes across the board.”

On Friday, President Trump called the ruling “deeply disappointing,” declaring that, “when you read the dissenting opinions, there’s no way that anyone can argue against them. Foreign countries that have been ripping us off for years are ecstatic … and they’re dancing in the streets, but they won’t be dancing for long.”

Trump added that he was “ashamed of certain members of the Court, absolutely ashamed for not having the courage to do what’s right for our country.” Trump said the “Democrats on the court” were “an automatic no” on any case involving his administration, making them a “disgrace” to the country.

Of the conservative justices who sided against the administration, Trump said they were “just being fools and lapdogs for the RINOs and the radical left Democrats. … They’re very unpatriotic and disloyal to our Constitution. It’s my opinion that the Court has been swayed by foreign interests.” In response to a question, Trump said that only three justices were “happily invited” to his upcoming Sate of the Union address, while the other six were “barely invited.”

On Friday, President Trump also issued an executive order imposing worldwide tariffs under Section 122 of the Trade Act of 1974. The order set tariffs at 10% from February 24 until July 24.

Section 122 empowers the president to impose a “temporary import surcharge” of up to 15% for a period of 150 days. The section is designed to address “fundamental international payments problems” that create certain currency crises, such as “large and serious United States balance-of-payments deficits,” “imminent and significant depreciation of the dollar in foreign exchange markets,” or “an international balance-of-payments disequilibrium.”

This section of code responded to a financial crisis in the late 1960s and early 1970s under the Bretton Woods scheme, when more money was going overseas than was returning to the United States. Legal expert Andy McCarthy explained that “The balance of payments is a broader concept than the balance of trade,” including foreign investment into the U.S. economy, among other types of payments.

In sum, McCarthy writes, “What Trump is complaining about — something he insists is a crisis but is not — is the balance of trade, not of payments. The United States does not have an overall balance of payments deficit, much less a large and serious one.”

Nevertheless, Trump’s executive order contended, “senior officials have informed me that fundamental international payments problems within the meaning of section 122 exist and that special import measures to restrict imports are required to address these problems. … Among other things, I have been informed by my advisors that the United States balance-of-payments position, under any reasonable understanding of the term in the context of section 122, is currently a large and serious deficit.”

On Saturday, President Trump revised the policy set forth in his executive order in a Truth Social post, “raising the 10% Worldwide Tariff on Countries … to the fully allowed, and legally tested, 15% level.” This decision, Trump said, was “Based on a thorough, detailed, and complete review of the ridiculous, poorly written, and extraordinarily anti-American decision on Tariffs issued yesterday, after MANY months of contemplation, by the United States Supreme Court.”

“During the next short number of months,” Trump added, “the Trump Administration will determine and issue the new and legally permissible Tariffs, which will continue our extraordinarily successful process of Making America Great Again.” This signals a plan to pivot once again from the temporary tariff authority under Section 122 to a longer-lasting tariff authority under Section 301 of the Trade Act, which requires more upfront work before they can be implemented.

On Monday morning, the Dow Jones index fell by more than 1% after the news of Trump’s imposition of new tariffs, reflecting the business world’s response to the sudden increase in taxes. “I’m surprised when people are surprised that prices went up after the tariffs,” said Bowyer, “because … it’s not just something that’s a side effect of tariffs. It’s what tariffs are designed to do.”

“The rationale for a tariff is that we Americans produce goods, foreigners produce some goods and services cheaper, and so … that hurts the American companies and producers,” Bowyer explained. “And so, we’re going to put a tariff on the foreigners. So that raises the price of the foreign goods to give American businesses a little breathing room, so they can raise their prices too and make a profit. So, the mechanism of tariffs is supposed to be to raise prices, to decrease competition, to help American companies in competition with foreigners.”

“So it doesn’t help consumers. It’s never going to help consumers,” he concluded. “It’s supposed to hurt consumers but help producers. And so, we shouldn’t be surprised when it raises prices. Raising prices is what it’s intended to do.”

President Trump’s claims to new tariff authority will likely face similar challenges on constitutional grounds. “The Supreme Court simply upheld the tradition of American law, ‘This thing’s a tax, Mr. President. If you want there to be an additional tax, go over to Congress and ask them for it and see if you can convince them,’” Bowyer summarized.

However, President Trump has insisted that he has the authority to implement tariffs without going to Congress. “I don’t need to, it’s already been approved,” the president said, when asked about the possibility.

A number of Republicans in Congress have broken with President Trump and voted against tariffs on Canada, suggesting the president could face an uphill battle forcing a policy that increases consumer prices through Congress before the midterm elections.

On that score, Bowyer argued, “I think the Supreme Court just did the president a solid by striking down these tariffs. We’re going to get some decreases in prices, and it just might help Republicans in the midterms.”

“There’s really one reason Donald Trump is president. It’s not most of his agenda. It was the Biden inflation,” Bowyer elaborated. “Inflation was very high under Biden. The president was supposed to bring inflation down. And it’s certainly lower than it was under Biden, but it’s higher than it should be, and tariffs are part of that.”

Bowyer praised most of President Trump’s economic agenda, including the 2017 tax cuts made permanent in the Big Beautiful Bill. “I believe in the president’s agenda enough to believe that we don’t need protectionism to win,” he declared. Thus, his message to Trump is, “Mr. President, you did it already. Take a victory lap, let the economy run, and stay off Twitter for a little while. And let’s have a little stability in trade policy.”