Trump’s Labour Day Tariffs and the Limits of Presidential Power
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On 20 February, the U.S. Supreme Court ruled, in a 6–3 decision, that President Trump’s controversial global tariffs, levied in April 2025 under the authority of the International Emergency Economic Powers Act (IEEPA), were unconstitutional in their reliance on that statutory framework.
The Trump administration imposed varying tariffs on over 90 countries. As of 14 December, the U.S. government had collected $134 billion in revenue from over 301,000 importers.
The tariff structure was far from uniform in its application. While allies such as the United Kingdom and Japan faced rates between 10 and 15 per cent, countries such as India and Brazil were subjected to tariffs of 50 per cent despite accounting for only a modest share of U.S. imports. China, Canada and Switzerland, by contrast, faced rates of 30, 35 and 39 per cent respectively, reflecting trade volume as well as political tension. The high tariffs imposed on Switzerland stand out as the country is not regarded as a major tariff aggressor.
This uneven distribution drew scrutiny from both Congress and the international community over the authority under which these measures were imposed. In cases where Presidential action appeared to move beyond Congress’s traditional role in shaping trade policy and instead operate as a form of political pressure, concerns intensified. Several tariff increases coincided with wider geopolitical disputes, ideological differences between governments, and shifts in U.S. foreign and economic policy. As a result, the tariff regime appeared to extend beyond reciprocal trade calculations, incorporating decisions that critics described as punitive, with limited transparency regarding the methodology behind them and justification resting largely on assertions of national interest by the President.
In striking down the measures, Chief Justice John Roberts emphasised the “limited role assigned to us by Article III of the Constitution,” while concluding that the president’s reliance on IEEPA “falls short” of the statutory authorisation required for such sweeping tariffs. The Court noted that IEEPA has historically been used to impose targeted sanctions in response to specific foreign threats, rather than to authorise sweeping global tariff regimes.
The ruling, however, does not automatically resolve the practical consequences of the policy. Although more than $134 billion has been collected, large-scale refunds to importers are expected to face significant legal and administrative obstacles. Moreover, foreign governments cannot challenge the tariffs on constitutional grounds, as the dispute centres on internal separation-of-powers questions within the U.S. legal system.
The decision does not preclude future tariff action. Legal experts note that alternative statutory avenues remain available, including Section 122 of the Trade Act of 1974, which permits tariffs of up to 15 per cent for 150 days under certain economic conditions, and Section 338 of the Tariff Act of 1930, which allows tariffs of up to 50 per cent against countries deemed to discriminate against U.S. commerce. Treasury Secretary Scott Bessent has identified such provisions as potential alternatives, like authorities used during Trump’s first term.