The Supreme Court of the United States has declared the sweeping tariffs imposed on imports by President Donald Trump illegal. In a 6-3 majority decision on Friday (20), the court said that the International Emergency Economic Powers Act (IEEPA) of 1977 does not allow the President to impose such broad and long-lasting tariffs. This decision cancels most of the tariffs imposed unilaterally after April 2025 and makes it clear that such commercial taxes cannot be imposed without the approval of Congress.
What did the court say?
The majority, led by Chief Justice John Roberts, held that the IEEPA was a law designed to meet specific emergency circumstances and not to implement a permanent tariff policy. The court upheld the lower court’s decision, which had already declared the tariffs to be without legal basis. This case was initiated on the petition of the companies and 12 American states that were affected by these tariffs. Most of the states were governed by Democrats.
$175 billion at stake
According to experts, this decision can have a big financial impact. According to Penn-Wharton Budget Model estimates, more than $175 billion was collected from tariffs imposed under IEEPA. Now this amount may have to be returned to the government. The Congress Budget Office had estimated annual revenue from tariffs at about $300 billion in the coming years. After the decision of the Supreme Court, questions have been raised on this estimate also.
How many dollars may have to be returned to which country?
Estimating the estimated revenue for different countries from possible tariffs imposed by the US presents an interesting picture. According to the data, China seems to be affected the most. It is estimated that tariffs worth about $205.2 billion may have been collected on imports from China.
This is followed by Mexico ($84.1 billion) and Canada ($78.8 billion). Both these countries are major trading partners of America, hence the possibility of huge revenue from here also has been expressed. India is at fourth place in this list. According to estimates, tariff revenue of about 33 billion dollars can be obtained from imports from India. After this comes Japan ($32.3 billion), Germany ($29.9 billion) and Vietnam ($29.8 billion).
Potential revenue from South Korea has been estimated at $27.9 billion and from Taiwan at $17.3 billion. A significant amount is also expected to come from Italy ($12.9 billion), Thailand ($12.6 billion), Brazil ($12.5 billion) and Switzerland ($12.2 billion). An estimated revenue of $9.9 billion can come from France. Apart from this, a total potential tariff revenue of about $ 105.5 billion has been shown from the category of other countries.
It is clear from these figures that the biggest impact of the tariff policy falls on those countries which have big trade relations with America. It also indicates that any major tariff change in global trade can have a wide-ranging economic impact.
Markets rising, but uncertainty remains
Wall Street witnessed a boom immediately after the decision. Investors took this as a sign of reducing business uncertainty. However, analysts believe that the government may explore other legal avenues to save some tariffs.
emphasis on balance of powers
The Supreme Court made it clear that the basic power to decide the tariff policy rests with Congress. This decision reiterates the balance of powers in the US Constitution. The dissenting justices advocated greater flexibility for the executive in international trade matters, but the majority preferred legal limits.