U.S. President Donald Trump holds a chart detailing tariffs, at the White House in Washington, April 2, 2025.Carlos Barria/Reuters
Donald Trump has promised to hit back with a new barrage of tariffs after the U.S. Supreme Court struck down a central pillar of his protectionist agenda and delivered a stinging rebuke of his expansive vision of presidential power.
In a 6-3 ruling, the court determined that the President acted illegally when he used emergency economic powers to impose sweeping tariffs on trade partners last year.
However, it does not mean the end of tariffs or Mr. Trump’s attempts to remake global trade.
The decision does not apply to the sectoral tariffs on steel, aluminum, automobiles and lumber, which are doing the most damage to Canadian trade. And hours after the decision was released, Mr. Trump said he would impose a new 10-per-cent global tariff using a different piece of legislation and reach for other less-convenient legal tools to recreate his tariff wall.
Canada lauds U.S. court ruling that strikes down legal justification for some Trump tariffs
In a fiery press conference, Mr. Trump attacked the six judges who voted against him, calling them “a disgrace to our nation.”
“The Supreme Court’s ruling on tariffs is deeply disappointing, and I’m ashamed of certain members of the court, absolutely ashamed, for not having the courage to do what’s right for our country,” Mr. Trump told reporters at the White House.
The Supreme Court decision focuses on duties that were imposed using the International Emergency Economic Powers Act, or IEEPA. These include “fentanyl tariffs” imposed on Canada, Mexico and China, and the “Liberation Day” or “reciprocal” tariffs placed on the rest of the world.
IEEPA allows the President to take extraordinary steps to regulate international commerce after declaring a national emergency. Mr. Trump relied on this extensively over the past year to quickly increase tariffs and put pressure on other countries to cut deals with Washington to avoid further duties. By mid-December, the U.S. government had collected around US$130-billion in tariff revenue using IEEPA.
IEEPA, however, does not explicitly mention tariffs. The Supreme Court upheld two lower-court decisions that found Mr. Trump was misusing the legislation and acting beyond the powers explicitly granted to him by Congress.
“Had Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly, as it consistently has in other tariff statutes,” Chief Justice John Roberts wrote.
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The decision was a major test of the scope of U.S. presidential power, and the role of Congress. In his attempt to overhaul the global trading system and remake parts of the U.S. government, Mr. Trump has wielded executive authority in an unprecedented – almost imperial – manner.
The Supreme Court pushed back against this, reminding the Trump administration that the President operates within a carefully constructed balance of powers.
“Against that backdrop of clear and limited delegations, the Government reads IEEPA to give the President power to unilaterally impose unbounded tariffs and change them at will. That view would represent a transformative expansion of the President’s authority over tariff policy,” the court said.
Mr. Trump particularly reserved his anger for three conservative justices who sided with the liberals on the bench to rule against him. He labelled them “fools and lapdogs for the RINOs,” using an acronym for “Republican in Name Only,” and said they were “very unpatriotic and disloyal to our Constitution.”
A key question now is what happens to tariff revenue collected using IEEPA. Hundreds of companies reportedly filed lawsuits in U.S. courts ahead of the Supreme Court ruling to try to protect their right to a refund or position themselves at the front of the line for one.
The Supreme Court did not say how refunds should be handled. Mr. Trump said the question will have to be “litigated” and “we’ll end up being in court for the next five years.”
Dominic LeBlanc, Canada’s federal minister responsible for Canada-U.S. trade, welcomed the development.
“The United States Supreme Court’s decision reinforces Canada’s position that the IEEPA tariffs imposed by the United States are unjustified,” Mr. LeBlanc said in a statement. He added that “critical work lies ahead to support Canadian businesses and workers who remain affected by Section 232 tariffs on steel, aluminum and automotive sectors.”
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Canada has been less impacted by IEEPA than some other U.S. trading partners, because of a significant exemption.
It was among the first to be hit with countrywide tariffs last year, when Mr. Trump imposed a 25-per-cent levy on most Canadian goods – which has since risen to 35 per cent – asserting it was needed to force Ottawa to do more to address fentanyl trafficking and illegal migration.
However, two days later, the President granted a broad carve-out to the “fentanyl tariffs” for Canadian products that complied with the United States-Mexico-Canada Agreement on free trade. That allowed more than 90 per cent of Canadian exports to continue crossing the border tariff-free, even as some sectors are being hammered by the separate industry-specific tariffs.
An executive order published late Friday said the USMCA exemption would continue to apply to the new 10-per-cent global tariff.
As of mid-December, U.S. Customs and Border Protection had collected around US$2.4-billion in IEEPA tariff revenue on imports from Canada – less than 2 per cent of the total.
“For Canada, this ruling doesn’t eliminate the most significant tariffs currently in place, which are on autos, steel, aluminum, lumber and some copper products,” Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, wrote in a note to clients.
“But it does remove the threat of that 35-per-cent tariff being applied if the US opts to withdraw from the USMCA … So, while this isn’t a cure for tariffs facing Canada in targeted sectors (and actually provides more immediate relief to Canada’s competitors in the US that face reciprocal tariffs on all of their exports), it is nevertheless an improvement in Canada’s negotiating position in the upcoming USMCA talks.”
The decision may be more important for other U.S. trade partners, including the European Union, Britain and Japan, which agreed to increase market access and make substantial investments in the U.S. under the threat of escalating IEEPA tariffs. However, they may wait to see what the Trump administration does next before considering any changes to the deals they cut with Washington last year.
“Call it Liberation Day 2.0 – arguably the first one with tangible upside for U.S. consumers and corporate profitability,” Olu Sonola, head of U.S. economics at Fitch Ratings, said in a statement.
“This is a material rollback: more than 60 per cent of the 2025 tariffs effectively vanish. Mechanically, the U.S. effective tariff rate drops from about 13 per cent to around 6 per cent, removing more than US$200-billion in expected annual tariff collections,” he said.
“However, the bigger macro takeaway is not just ‘lower tariffs,’ but ‘higher tariff-regime uncertainty’... Layer on potential tariff refunds, and you introduce a messy operational and legal overhang that amplifies economic uncertainty.”
On the heels of his Supreme Court defeat, U.S. President Donald Trump said he'll sign an executive order that would impose a 10-per-cent global tariff under federal law known as Section 122. The president also said he is exploring other tariffs through other avenues.
The Associated Press
Mr. Trump told reporters that he intends to use several different laws to introduce new tariffs.
He said he would use Section 122 of the Trade Act of 1974 to impose a 10-per-cent global tariff starting immediately. This law lets the President impose tariffs of up to 15 per cent to address serious balance-of-payments problems. The tariffs can be in place for 150 days before Congress must vote to extend them.
Mr. Trump said he would also ramp up the use of sectoral tariffs, which are imposed on all countries using Section 232 of the U.S. Trade Expansion Act of 1962 – the law behind the steel, aluminum and auto tariffs. The U.S. Department of Commerce has already launched a number of additional Section 232 investigations into various industries, including aircraft, critical minerals and pharmaceuticals.
The Trump administration has at least two other laws it could potentially turn to: Section 301 of the Trade Act of 1974, which permits country-specific tariffs after an investigation into alleged unfair trading practices; and Section 338 of the Tariff Act of 1930, which authorizes tariffs of up to 50 per cent in certain circumstances.
“We have a lot of tools out there,” U.S. Trade Representative Jamieson Greer said in the news conference with Mr. Trump. “We have section 122, which we signed today, and will be implemented very shortly. We have Section 301 investigations, which are incredibly legally durable, where we can investigate and address unfair trading practices that led to our huge trade deficit. So, you can look forward in the coming days and weeks to see all of that come out and we keep continuity in the program.”
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Conservative justices Clarence Thomas and Brett Kavanaugh wrote lengthy dissents to the majority opinion. Mr. Thomas argued that “the power to impose duties on imports is not within the core legislative power” of Congress, which can “therefore delegate the exercise of this power to the President.”
Mr. Kavanaugh argued that the sole question for the court was whether IEEPA confers the power to tariff by granting a president the ability to regulate importation. “Statutory text, history, and precedent demonstrate that the answer is clearly yes: Like quotas and embargoes, tariffs are a traditional and common tool to regulate importation,” Mr. Kavanaugh wrote.
The setback to Mr. Trump’s protectionist agenda was cheered by business groups on both sides of the border.
“The Supreme Court’s decision is welcome news for businesses and consumers,” Neil Bradley, executive vice-president and chief policy officer at the U.S. Chamber of Commerce, said in a statement. “We encourage the administration to use this opportunity to reset overall tariff policy in a manner that will lead to greater economic growth, larger wage gains for workers, and lower costs for families.”
Mr. Bradley said the tariffs had led to “significant cost increases and supply-chain disruptions” for small and medium-sized business. He called for “swift” refunds to U.S. importers who had been forced to pay the tariffs.
Candace Laing, president and CEO of the Canadian Chamber of Commerce, warned that this “is a legal ruling, not a reset of U.S. trade policy. This is certainly not the last chapter of this never-ending story.”
She said that Canada should prepare for “new, blunter mechanisms to be used to reassert trade pressure, potentially with broader and more disruptive effects,” and redouble its efforts to diversify trade.
With reports from Nathan VanderKlippe and Steven Chase
Editor’s note: This article has been updated to correct the first name of Candace Laing, president and CEO of the Canadian Chamber of Commerce.