• The US Supreme Court ruled 6-3 to strike down President Trump's sweeping tariffs imposed under the International Emergency Economic Powers Act (IEEPA).
• The ruling concluded that Trump exceeded his legal authority, as the IEEPA does not authorize the president to impose tariffs.
• The decision could lead to billions in refunds for American businesses affected by the repeal of these tariffs.
• Analysts predict a decrease in the overall tariff burden, potentially bringing the average tariff rate down from 16.9% to 9.1%.
• The ruling does not impact sector-specific tariffs imposed for national security reasons, which remain in effect.

The US Supreme Court delivered a significant blow to President Donald Trump's economic agenda on Friday, ruling that the tariffs he imposed under the International Emergency Economic Powers Act (IEEPA) are unconstitutional. In a decisive 6-3 ruling, Chief Justice John Roberts stated, "the president asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope" but lacks the clear congressional authorization required to exercise such power. This ruling marks a pivotal moment, as it directly challenges the legal foundation of one of Trump's key policies, which relied on a broad interpretation of emergency powers to impose tariffs on nearly all trading partners, according to CBS News and Reuters.

The ruling means that the tariffs—previously imposed as an economic blackmail tool citing drug trafficking and trade imbalances as national emergencies—are invalidated, effectively confirming lower-court findings against Trump's utilization of IEEPA for tariff imposition. Chief Justice Roberts emphasized that had Congress intended to grant the president the authority to impose sweeping tariffs, it would have explicitly stated so in relevant statutes, underscoring the separation of powers outlined in the Constitution, as reported by Los Angeles Times and NPR.

As a direct consequence of the ruling, estimates suggest that the average tariff rate in the US could drop from around 16.9% to approximately 9.1%. This not only reduces costs for businesses but potentially lowers prices for consumers. The Supreme Court's decision also opens the door for businesses that paid tariffs to seek refunds, which could amount to billions of dollars. Legal experts note that the process of receiving these refunds might be complicated and lengthy, with more than 1,000 companies currently pursuing legal action for reimbursement, according to BBC and Vox.

Despite the setback, the decision does not eliminate all of Trump's tariffs. Sector-specific tariffs that remain in effect were imposed under different legal authority that allows for national security measures. These include tariffs on steel and aluminum, which could still be enforced separately using existing legislation. The ruling emphasizes that while President Trump may have lost this battle over broad tariffs, he retains alternative avenues to impose tariffs under established provisions like Sections 232 and 301 of the Trade Expansion Act, limiting the implications of this ruling to those tariffs implemented under IEEPA, as noted in sources like Channel News Asia and India Times.