The US Supreme Court struck down Trump’s tariffs

from Levi SumagaysaiCalMatters

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In a major blow to President Donald Trump, the U.S. Supreme Court ruled Friday that he lacks the authority to impose sweeping tariffs that have caused economic uncertainty in the state, the nation and beyond.

Trump cited the International Emergency Economic Powers Act of 1977 when he imposed tariffs on goods from most countries around the world soon after taking office early last year. In a 6-3 decision, the court said only Congress has the broad authority to tax Americans under the law.

“The President has no inherent power to impose tariffs in time of peace,” Chief Justice John Roberts wrote for the majority. Justices Clarence Thomas, Samuel Alito Jr. and Brett Cavanaugh dissented.

The White House did not immediately respond to questions from CalMatters, including whether it plans to cite other laws. The Trump administration has the power to impose tariffs using other laws, but the president has used tariffs as an economic cudgel largely under the act, which the Supreme Court has now said does not give him broad authority to do so.

American businesses and consumers have paid most of the cost of the president’s tariffs, according to recent surveys by researchers for the Federal Reserve Bank of New York and others have shown. In California, the tariffs have had an impact ports, farmsbusinesses, workers and consumers in different ways and have been a factor of persistence inflation.

The state’s trade with China has fallen so sharply that it is no longer the state’s largest trading partner, according to a recent analysis by the Public Policy Institute of California.

Daniel Payares-Montoya, a PPIC researcher who based his analysis on International Trade Administration data, said trade with China has been declining since Trump’s first term, “but to see the dramatic decline, I didn’t expect it.”

In 2024, imports from and exports to China will account for 20% of all trade activity in California. In 2025, at least through October, that number has dropped to 13.4%. Mexico became the country’s largest trading partner, followed by China and Taiwan.

Payares-Montoya emphasized that his analysis is not causal: “I can’t say what would have happened in the absence of (Trump’s tariff unveiling, known as) ‘Liberation Day,’ or if Kamala Harris had won (the presidency).”

The country’s beverage industry has been weighed down by tariffs, analysis shows. California’s beverage exports of brewery, winery and distillery products fell more than 32 percent compared to the same period in 2024, from more than $1.3 billion to $880 million through October, Payares-Montoya found. A big factor was that beverage exports to Canada fell to 16% in 2025 due to a boycott of American products and travelwhich was also linked to the president’s threats to annex Canada. The big drop came after beverage exports to Canada averaged nearly a third of the state’s total annual volume from 2010 to 2024. Most recently, Trump threatened with 100% tariffs for Canada to conclude a trade agreement with China.

Overall, the state saw a slight decline, 0.1 percent, to $459 billion, in the dollar value of imports and exports in the first 10 months of last year, the PPIC analysis found.

Two of the nation’s busiest ports, in Long Beach and Los Angeles, ended up handling the highest and third-highest volumes of cargo last year, respectively, despite uncertainty surrounding tariffs. But exports fell as retaliatory tariffs also hit American farmers.

Gene Seroka, executive director of the Port of Los Angeles, said at a media briefing this week that soybean exports to China from his port dropped 80 percent last year.

“Almost every agricultural commodity that we export was affected,” Noel Hasegaba, CEO of the Port of Long Beach, said in an interview with CalMatters this week.

The Supreme Court’s ruling will set off what could be a messy process to claw back tax revenue collected by the government, which totals more than $264 billion in 2025. U.S. corporations, including Costco, Alcoa and Revlon, have sued the federal government over the tariffs, hoping to be first in line for refunds.

In his dissent, Kavanaugh wrote that the Supreme Court’s decision is likely to have “serious practical consequences in the near future” and that “the recovery of billions of dollars will have significant implications for the US Treasury.”

Trump has worried on social media about possible refunds, saying it “would be a complete mess and almost impossible for our country to pay. Anyone who says it can be done quickly and easily would be giving a false, inaccurate or completely misunderstood answer to this very large and complex question.”

But US Treasury Secretary Scott Bessent did said that the federal government could issue refunds if needed, though he questioned how the companies would handle eventually getting their money back: “Will Costco, which is suing the US government, refund their customers?”

Costco, which filed its lawsuit in November, did not respond to CalMatters’ questions, including about how soon it would seek reimbursement from the federal government. The Treasury Department did not respond to an email about how the refunds would work.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.