(ZeroHedge)—The Supreme Court on Tuesday struck down Trump’s tariffs. In a 170-page decision and a 6-3 vote, the court ruled that Trump’s use of the 1977 International Emergency Economic Powers Act (IEEPA) – which constitute about half of the tariffs we’ve seen under Trump – was not lawful.
“IEEPA does not authorize the President to impose tariffs,” wrote the court.
The ruling stems from a consolidated challenge brought by small businesses and multiple states, who argued that the statute – originally intended to authorize sanctions and asset freezes during national emergencies – does not grant the executive branch the power to levy taxes on imports. Writing for the majority, the Court emphasized that the Constitution vests Congress alone with the authority to impose duties and tariffs, and found that IEEPA’s authorization to “regulate … importation” cannot be interpreted to include the distinct taxing power required to enact broad-based tariffs. As a result, the Court affirmed lower-court rulings blocking the challenged measures, concluding that the administration’s emergency-based tariff framework exceeded the limits of the statute.
Trump invoked IEEPA to impose his ‘reciprocal’ tariffs on nearly every foreign trade partner to address what he called a national emergency over US trade deficits. He invoked it again to impose tariffs on China, Canada and Mexico over fentanyl trafficking into the United States.
Friday’s decision rests on the notion that tariffs are not merely a tool for regulating trade, but also a a form of taxation that the Constitution reserves to Congress. Citing Article I, Section 8, the majority stressed that the power to impose tariffs is “very clear[ly] … a branch of the taxing power,” and that the Framers gave Congress “alone … access to the pockets of the people.” The administration had argued that IEEPA’s grant of authority to “regulate … importation” permitted the President to impose tariffs in response to declared national emergencies. The Court rejected that interpretation, noting that while “taxes may accomplish regulatory ends, it does not follow that the power to regulate includes the power to tax as a means of regulation.”
The majority also pointed to the statute’s text, emphasizing that IEEPA authorizes the President to “investigate, block … regulate, direct and compel, nullify, void, prevent or prohibit” certain transactions – yet makes no mention of tariffs or duties.
“Had Congress intended to convey the distinct and extraordinary power to impose tariffs,” the opinion states, “it would have done so expressly, as it consistently has in other tariff statutes.”
The Court further highlighted a lack of historical precedent – noting that that in the nearly 50 years since IEEPA’s enactment, “no President has invoked the statute to impose any tariffs,” and that combined with the sweeping economic impact of the measures at issue – it was a “telling indication” that the asserted authority falls outside the President’s legitimate reach.
Applying what it characterized as the “major questions” framework, the Court reasoned that Congress would not delegate such sweeping control over trade policy through vague language. The President’s claim that two words – “regulate” and “importation” – authorize tariffs “of unlimited amount and duration, on any product from any country,” the majority wrote, would represent a “transformative expansion” of executive authority over tariff policy and the broader economy.
Tariff Refunds?
Notably, the Court’s ruling does not address what happens to the billions of dollars in tariff revenue already collected under the now-invalidated IEEPA framework, leaving open the possibility of a wave of refund litigation in the months ahead. There are currently hundreds of tariff refund lawsuits pending in US trade court.
While the majority opinion strikes down Trump’s use of IEEPA, it offers no guidance on restitution, repayment, or whether importers may be entitled to recover duties paid pursuant to tariffs the Court has now deemed unlawful. That omission is likely to shift the next phase of the dispute into the U.S. Court of International Trade, where importers may seek retroactive relief through administrative protests or refund actions.
Justice Kavanaugh’s dissent notes that the process is likely to be a “mess,” warning that “the Court’s decision is likely to generate other serious practical consequences in the near term,” adding “One issue will be refunds.”
Trump’s administration has not provided tariffs collection data since December 14. But Penn-Wharton Budget Model economists estimated on Friday that the amount collected in Trump’s tariffs based on IEEPA stood at more than $175 billion. And that amount likely would need to be refunded with a Supreme Court ruling against the IEEPA-based tariffs. –Reuters
Any such claims could involve complex questions of sovereign immunity, administrative exhaustion, and the availability of equitable relief – particularly where duties were paid without timely protest. Whether courts ultimately require repayment of unlawfully imposed tariffs may depend not just on the validity of the underlying statute, but on the procedural posture of individual importers and the statutory refund mechanisms available under U.S. customs law.
During arguments on Nov. 5, the court seemed skeptical over Trump’s authority to use IEEPA, leading most observers observers, including betting markets, to conclude a high probability they’re struck down at least in part. The Trump administration is appealing lower court rulings that he overstepped his authority, while Trump himself said a Supreme Court ruling against the tariffs would be a “terrible blow” to the United States.
Other Options
That said, even if that happens, the Trump administration has several other legal avenues they can pursue. As Deutsche Bank noted last month;
For instance, the sectoral tariffs (e.g. on steel and aluminum) aren’t covered by the court ruling, whilst another option would be to use Section 122 of the 1974 Trade Act, which permits temporary 15% tariffs for 150 days.
And Goldman:
This won’t be the end of tariffs… the administration will almost certainly roll out alternative legal frameworks. Net result is probably slightly fewer tariffs, materially more trade uncertainty, and some incremental deficit concerns. Net-net, that’s mildly supportive for equities and mildly negative for bonds… but largely priced for both.
Trump called the ruling a ‘disgrace,’ and told governors at a White House breakfast that he has a ‘backup plan’ in mind, though no details on that.
ZH Premium Members – stay tuned for an in-depth look at these options…
Meanwhile, prediction markets got this one right.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
