The

Supreme
Court
on
Friday
ruled
in
a
6-3
decision
that
President

Donald
Trump
overstepped
his
authority
by
imposing
sweeping

tariffs
under
a
federal
law
intended
for
national
emergencies,
a
decision
that
marks
a
rare
defeat
for
the
administration
at
the
high
court,
which
holds
a
6-3
conservative
majority.

The
court
found
that
Trump’s
use
of
the
International
Emergency
Economic
Powers
Act
of
1977,
known
as
IEEPA,
did
not
authorize
him
to
unilaterally
levy
broad
tariffs
on
goods
entering
the
U.S.

The
Supreme
Court
said
Friday
that
IEEPA
does
not
explicitly
mention
tariffs,
but
rather
it
allows
the
president
to
“regulate
…
importation”
of
foreign
property
transactions
after
declaring
a
national
emergency
in
order
to
deal
with
certain
“unusual
and
extraordinary”
threats.

According
to
NBC
News,
the
ruling
does
not
affect
all
tariffs,
leaving
in
place
those
imposed
on
steel
and
aluminum
under
separate
legal
authorities.
But
it
does
overturn
tariffs
in
two
major
categories:
country-by-country,
or

“reciprocal,”
tariffs
—
which
range
from
34%
on
China
to
a
10%
baseline
applied
to
most
other
countries
—
and
a
25%
tariff
on
certain
goods
from

Canada,
China
and
Mexico,
which
the
administration
previously
said
were
aimed
at
pressuring
these
countries
to
curb
the
flow
of
fentanyl.

The
ruling
does
not
stop
Trump
from
trying
to
impose
tariffs
under
other
laws,
although
these
methods
come
with
more
limits.

The
majority
concluded
that
the
Constitution
“very
clearly”
assigns

Congress
the
authority
to
impose
taxes,
including
tariffs.

Chief
Justice
John
Roberts
wrote
the

majority
opinion,
and
Justices
Clarence
Thomas,
Brett
Kavanaugh
and
Samuel
Alito
dissented.

“The
president
asserts
the
extraordinary
power
to
unilaterally
impose
tariffs
of
unlimited
amount,
duration,
and
scope.
In
light
of
the
breadth,
history,
and
constitutional
context
of
that
asserted
authority,
he
must
identify
clear
congressional
authorization
to
exercise
it,”
Roberts
wrote.
“As
such,
we
hold
that
IEEPA
does
not
authorize
the
president
to
impose
tariffs.

“The
tariffs
at
issue
here
may
or
may
not
be
wise
policy.
But
as
a
matter
of
text,
history,
and
precedent,
they
are
clearly
lawful,”
Kavanaugh
wrote.

Cotality
chief
economist
Selma
Hepp
issued
a
statement
after
the
decision,
saying
that
it
won’t
reduce
construction
costs
for
homebuilders
in
the
near
term
due
to
other
ongoing
market
headwinds.

“The
Supreme
Court’s
decision
declaring
Trump-era
tariffs
unlawful
may
reduce
some
artificial
cost
pressures
in
construction
supply
chains,
benefiting
builders
and
reconstruction
projects
by
easing
price
uncertainty
for
imported
materials,”
Hepp
said.
“Although
reconstruction
costs
have
risen
60%
over
four
years
—
impacting
housing
affordability
via
higher
insurance
and
material
prices
—
the
ruling
won’t
immediately
lower
costs
due
to
persistent
labor
shortages,
high
financing,
and
global
supply
issues.

“However,
clearer
trade
rules
should
eventually
improve
planning,
lower
risk
premiums,
and
help
stabilize
or
prevent
further
increases
in
new
construction
and
reconstruction
expenses.”

In
April
2025,
Trump
imposed
what
he
called
“reciprocal”
tariffs
on
most
countries
and
labeled
it
as

“Liberation
Day,”
citing
trade
deficits
as
a
national
emergency.
Earlier
duties
targeted
Canada,
China
and
Mexico,
which
the
administration
linked
to
a
declared
emergency
over
drug
trafficking.

The
measures
prompted
a
wave
of
lawsuits,
including
challenges
brought
by
about
a
dozen
predominantly
Democratic-led
states.

In
May
2025,
a
federal
trade
court

blocked
Trump’s
efforts
to
impose
broad
tariffs
under
emergency
powers,
citing
violations
of
U.S.
law
and
the
creation
of economic
turmoil.
In

August
2025,
the
tariffs
were
ruled
illegal by
a
federal
appeals
court
that
also
referenced
IEEPA.

Friday’s
decision
did
not
decide
or
specify
whether
companies
will
get
refunds
for
the
billions
of
dollars
already
paid.
Some
businesses,
including
retailer

Costco,
have
asked
lower
courts
to
order
the
government
to
return
the
money,
The
Associated
Press
reported.

As
of
December,
the

Department
of
the
Treasury
had
collected
more
than
$133
billion
from
the
tariffs
imposed
under
the
emergency
law,
according
to
federal
data.

The
economic
impact
of
the
tariffs
has
been
projected
at
roughly
$3
trillion
over
the
next
decade,
according
to
estimates
from
the

Congressional
Budget
Office.
It
is

unclear
whether
the
decision
will
impact
tariffs
on
homebuilding
inputs
such
as
lumber,
steel,
aluminum
and
copper.

Editor’s
note:
This
story
was
updated
with
comments
from
Cotality’s
Selma
Hepp.