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| ▲ This file photo, released by Reuters, shows U.S. President Donald Trump delivering remarks on tariffs in the Rose Garden at the White House in Washington, on April 2, 2025. (Yonhap) |
(3rd LD) US court-Trump tariffs
(3rd LD) U.S. Supreme Court strikes down Trump's sweeping emergency tariffs
(ATTN: ADDS more info in paras 7-10)
By Song Sang-ho
WASHINGTON, Feb. 20 (Yonhap) -- The U.S. Supreme Court ruled Friday against President Donald Trump's sweeping emergency tariffs, dealing a major setback to his economic policy and prompting questions over trade deals with South Korea and other partners that he has secured with the duties as a key negotiating tool.
In a six-to-three decision, the high court upheld a lower court's ruling against Trump's use of the 1977 International Emergency Economic Powers Act (IEEPA) to justify duties, including "reciprocal" tariffs on South Korea and other countries, fueling expectations that Washington would have to initiate a complicated tariff refund process.
The Trump administration has levied reciprocal tariffs of 15 percent on South Korean products, down from 25 percent following a bilateral deal under which Seoul has committed to investing US$350 billion in the United States, among other pledges, in return for the tariff reduction.
"We hold that IEEPA does not authorize the president to impose tariffs," Chief Justice John Roberts wrote in the ruling. He was one of the six justices, including two fellow conservatives, who ruled against the emergency tariffs.
Roberts pointed out that the president asserts the extraordinary power to unilaterally impose "tariffs of unlimited amount, duration, and scope," but "in light of the breadth, history, and constitutional context of that asserted authority," the president must identify clear congressional authorization to exercise it.
"IEEPA contains no reference to tariffs or duties. The government points to no statute in which Congress used the word 'regulate' to authorize taxation," the top justice said. "And until now no president has read IEEPA to confer such power."
On April 2, a day he dubbed "Liberation Day," Trump announced his reciprocal tariff plan, arguing that a lack of "reciprocity" in trade with trading partners and their trade barriers led to "large" and "persistent" trade deficits, which he said posed an "unusual" and "extraordinary" threat to U.S. national security and the economy.
But the court stressed that the framers of the U.S. constitution gave "Congress alone" the power to impose tariffs during peacetime, and that the foreign affairs implications of tariffs do not make it any more likely that Congress would relinquish its tariff power "through vague language, or without careful limits."
The ruling came as Trump has been doubling down on his trade policy to reduce America's trade deficit, boost its domestic manufacturing and foreign investments, and increase federal revenue, ahead of the midterm elections, which are seen as a crucial gauge of public sentiment toward his administration.
Commenting on the ruling, South Korea's presidential office Cheong Wa Dae said that it will comprehensively review the court decision and the U.S. government's position, and consider its response in a "direction that best serves national interests."
Trump has leveraged the IEEPA tariffs for various purposes, including pressuring Mexico, Canada and China to help end the flow of fentanyl into the U.S. and securing trade deals with South Korea, Japan, the European Union and other partners, as well as curbing India's purchases of Russian oil.
This week's ruling does not affect Trump's entire tariff policy as it does not cover other levies, including sector-specific tariffs that he imposed under Section 232 of the 1962 Trade Expansion Act -- a law that gives the president the authority to adjust imports when he determines they threaten to impair national security.
In the lead-up to the court decision, Trump repeatedly warned of serious consequences for a court decision undoing IEEPA tariffs, saying it would pose the "biggest threat in history" to U.S. national security or deal a "terrible blow" to America.
The ruling could set the stage for a refund process.
Reuters reported, citing Penn Wharton Budget Model economists, that over $175 billion in U.S. tariff collections could have to be refunded in the event of a ruling against the emergency tariffs.
The Trump administration is expected to seek workarounds or other legal means at its disposal to maintain the levies.
It could weigh a set of provisions, such as Section 232 of the 1962 law for sector-specific tariffs, Section 301 of the 1974 Trade Act for country-specific tariffs against trade violations and Section 338 of the 1930 Tariff Act for duties against countries with trade practices discriminating against the U.S.
Uncertainty remains over how aggressively Trump would push to introduce new tariffs as his administration faces the challenging task of addressing the politically charged issue of "affordability" ahead of the midterm elections seen as a gauge of public sentiment on his administration's performance.
Ahead of the major local elections slated for June, South Korean President Lee Jae Myung could face domestic pressure to nix the trade deal with Washington in the event of a ruling against reciprocal tariffs, Victor Cha, president of the geopolitics and foreign policy department and Korea chair at the Center for Strategic and International Studies, has said.
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