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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

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In a landmark case that tested whether a president can use executive power to unilaterally impose tariffs on a global scale, the United States Supreme Court today ruled against the Trump Administration’s imposition of tariffs under the International Emergency Economic Powers Act of 1977 (IEEPA). The decision has significant consequences for importers that have paid billions in tariffs under IEEPA — and for the future direction of U.S. tariff policy.

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Background of the IEEPA Tariff Challenge

The case began as a lawsuit by a coalition of importers led by V.O.S. Selections, Inc. (and joined by several state governments), challenging the legality of tariffs issued by the Trump Administration under IEEPA. The case targeted tariffs on Chinese products, a 10% duty on certain imports from Canada and Mexico and a worldwide 10% tariff on most other imports. These tariffs were unprecedented in both their size and scope and in the manner in which they were issued. Automotive suppliers took particular notice, as many rely on parts and materials from Canada, Mexico, China and beyond.

Road to the Supreme Court

On May 28, 2025, the U.S. Court of International Trade ruled in favor of the challengers, finding that the President’s IEEPA tariffs exceeded the authority granted by Congress and were unconstitutional. The court’s unanimous decision not only struck down the tariffs but also issued an injunction blocking their enforcement, giving the administration 10 days to appeal.

The Trump Administration appealed, and on Aug. 29, 2025, the U.S. Court of Appeals for the Federal Circuit affirmed the lower court’s decision that the tariffs were unlawful (the Federal Circuit’s 7–4 ruling agreed that the President had overstepped IEEPA, though it temporarily stayed the nationwide injunction to allow further appeal). The Administration then petitioned the Supreme Court, which took the case on an expedited basis, given the significant economic and constitutional questions at stake.

The Supreme Court heard oral arguments in November. The Justices’ questions showed concern about fundamental issues of statutory authority and separation of powers but mostly centered on the question of whether IEEPA’s language permitting the President to “regulate… importation” was ever intended to authorize the sweeping tariffs in question. We summarized the oral argument further in an <a href="https://www.wnj.com/updates/tariffs-have-their-day-in-the-supreme-court/" target="_blank" rel="noreferrer noopener">earlier blog post</a>.

The Court Strikes Down the IEEPA Tariffs

This morning, the Court ruled by a vote of 6–3 that the President lacked authority to issue tariffs under IEEPA. The majority started with the premise that “[t]he power to impose tariffs is very clearly a branch of the taxing power.” Tariffs are thus constitutionally within Congress’s purview unless expressly delegated to the executive. The majority declined to find that IEEPA’s use of the words “regulate” and “importation” separated by 16 other words was a sufficient delegation.

The majority reasoned that when Congress intends to delegate the power to impose tariffs, it does so expressly and with procedural safeguards in place. The Court observed that this signifies a long-held policy of “executive-legislative collaboration over trade policy.” With this background, the Court declined to read broad, unchecked tariff authority into IEEPA’s single, vague reference to regulating imports.

Chief Justice Roberts authored the majority opinion striking down the tariffs. He was joined in that conclusion by Justices Sotomayor, Kagan, Gorsuch, Barrett and Jackson. The six-justice majority was split evenly over whether the “major questions doctrine” should be applied to the analysis. This resulted in several concurring opinions. But all six agreed with the conclusion that the President lacked the authority to impose the IEEPA tariffs in question.

Justices Alito, Thomas and Kavanaugh dissented. Their dissents argued that the power to regulate imports would historically be understood to include the power to issue tariffs.

Implications for Automotive Supply Chains

The stakes of this case were significant. The Administration’s tariff regime has not only had the obvious impact of driving up the cost of foreign materials and components, but it has also caused immense financial uncertainty for suppliers that have spent decades building foreign supply chains. The Administration has issued tariffs under several statutes, but the IEEPA tariffs stood out given the breadth of power claimed by the Administration under that statute. Other trade authorities — such as Section 301 of the Trade Act and Section 232 of the Trade Expansion Act — include procedural safeguards that require specific studies and findings justifying a tariff before it can be imposed. These processes often take many months. But under IEEPA, the Administration had claimed unchecked power to issue tariffs at any amount, against any country and with no warning.

The Court’s decision this morning removes that threat. The Administration may react to this decision by issuing new tariffs under different statutory authority. But today’s decision should reduce the possibility that automotive suppliers will have to react to new tariffs without warning.

The decision also sets the stage for the potential refund of IEEPA tariffs paid over the last year. The majority opinion was silent as to whether a refund is required or what procedures might govern a refund. Most estimates are that tariffs collected under IEEPA exceed $130 billion, and may even approach $200 billion. There may be further litigation over whether the Administration will offer a refund and what procedures might be required. Suppliers seeking a refund will need to closely monitor this space.

Today’s opinion is likely a boon and a relief to most suppliers. But this story is far from over. The extent to which refunds will be available, the process for obtaining them and the timing of that process are all still open questions. Warner will continue to track developments and is standing by to assist clients in pursuing these claims.

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The Supreme Court Strikes Down Tariffs Under IEEPA

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The Supreme Court Strikes Down Tariffs Under IEEPA

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