Supreme Court strikes down Trump tariffs, but relief for poorer Americans uncertain

WASHINGTON (OSV News) — The U.S. Supreme Court struck down President Donald Trump’s sweeping tariff policy Feb. 20, finding it exceeded his authority, marking a major setback for his economic agenda.

In effect, a tariff is a tax imposed by a government on imported goods. Trump has argued his tariffs would protect U.S. manufacturing, but some economists have cautioned they will raise consumer prices on many goods and could lead to a recession. Catholic economists, pointing out the Church’s preferential option for the poor in its social teaching, have also pointed out the burden of those tariffs disproportionately falls on Americans with the lowest incomes.

In a 6-3 ruling, the high court rejected the Trump administration’s claim that the 1977 International Emergency Economic Powers Act, or IEEPA, granted the president unilateral power to impose sweeping tariffs on nearly every country around the globe, finding that the law does not grant him that authority.

“It stands to reason that had Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly — as it consistently has in other tariff statutes,” Chief Justice John Roberts wrote in the opinion of the court.

Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh dissented from the ruling.

Kavanaugh wrote in his dissent that one issue “will be refunds.”

“Refunds of billions of dollars would have significant consequences for the U. S. Treasury,” he argued. “The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers.”

Tyler Schipper, an associate professor of economics at the University of St. Thomas in St. Paul, Minn., called the ruling a good check on the president’s use of tariff power. But he told OSV News Trump might pursue other avenues to impose them under other tariff authorities.

“While most economists will applaud today’s decision, its impact is unlikely to be felt by those who most need relief,” Schipper said. “Tariffs have raised prices for everyone, but any refunds resulting from the ruling will flow to companies — not consumers. People should not expect lower prices on store shelves or a refund check in the mail.”

Schipper previously told OSV News that there are situations where tariff policy can support elements of Catholic social teaching. However, he pointed out the problem with the across-the-board tariffs — such as the ones the Supreme Court has now struck down — “is that they are regressive” and they “fall hardest among those with the least.”

He pointed to Yale Budget Lab estimates that “the bottom 10 percent of the income distribution will pay more than 3x more as a percentage of their income than the top 10 percent of the income distribution.”

Religious goods industry professionals also previously told OSV News the tariffs created uncertainty for their businesses.

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