United States Supreme Court strikes down emergency tariffs

Today, the US Supreme Court released its decision in Learning Resources v. Trump, which addressed whether the president’s emergency powers under the International Emergency Economic Powers Act (IEEPA) include the authority to impose tariffs. The majority of the Court held that the IEEPA does not give the president unilateral authority to impose tariffs on the basis of broadly-worded emergency powers.

What you need to know

• The US Supreme Court struck down tariffs imposed by President Trump under the IEEPA, including tariffs imposed on Canada to address fentanyl trafficking, other country-specific tariffs imposed at various rates, and a global 10% baseline tariff.
• Sector-specific tariffs on aluminum, autos, copper, lumber, steel, and other sectors remain in place.
• In response to the ruling, President Trump announced the imposition of 10% global tariffs under Section 122 of the Trade Act of 1974.

The Supreme Court’s decision

In its 6-3 decision, the majority of the Supreme Court determined that the IEEPA’s broadly-worded emergency powers do not authorize the president to impose tariffs, emphasizing that only Congress—not the president—holds the power to tax, which includes levying tariffs. Absent an express delegation of that power to the president, the IEEPA cannot be stretched to authorize sweeping tariffs in the name of trade policy.

As a result, two broad categories of tariffs imposed by President Trump are now invalid:

• 25% tariffs on goods from Canada and Mexico (subsequently raised to 35% for Canada), and 20% on goods from China, imposed in February-March 2025 based on the purported failure of those countries to curb the flow of fentanyl trafficking (often referred to as “fentanyl tariffs”).
• “Liberation Day” “reciprocal tariffs” imposed on various countries at different rates in April 2025, and a global baseline tariff of 10%.

What this decision means for Canada

This decision will bring tariff relief to Canadian goods exported to the United States that do not comply with CUSMA rules of origin or have not been certified as compliant. As we previously analyzed, CUSMA-compliant goods have already been exempted from IEEPA tariffs.

Global sector-specific tariffs were enacted under different statutory authorities and remain in place. This includes tariffs on aluminum, automobiles, copper, lumber, and steel.

What this decision means globally

As the Supreme Court struck down all tariffs imposed under the IEEPA, those imposed by President Trump’s other “fentanyl tariffs” and “reciprocal” tariffs are no longer in force. These range from a high of 50% for Lesotho to a 10% baseline for the rest of the world. As is the case with Canada, sector-specific tariffs will continue to apply globally.

Broader implications

Tariff relief may ultimately prove to be partial and temporary. In its decision, the Court noted that tariffs imposed under other laws remain valid.

In response, President Trump immediately announced the imposition of 10% tariffs to be applied globally under Section 122 of the Trade Act of 1974, which enables the president to impose tariffs for 150 days without congressional approval in response to “fundamental international payments imbalances” or where “necessary to prevent an imminent and serious significant depreciation of the dollar”. The Trump Administration may also consider imposing additional tariffs under other legislation, including Section 232 of the Trade Expansion Act of 1962 (for national security), and Sections 122 and 301 of the Trade Act of 1974 (for unfair trade practices and temporary balance-of-payment tariffs). Indeed, the Trump Administration previously signaled that if the Court were to strike down the IEEPA tariffs, it would simply seek to impose them under a different framework.

A trilateral review of CUSMA/USMCA is also set to begin in July 2026. It is broadly anticipated that tariffs will be a key issue in negotiations.