The US Supreme Court ruled that President Donald Trump exceeded his authority when he imposed sweeping global tariffs last year.
The court decided by six votes to three that Trump could not use a 1977 emergency law to tax imports from nearly every country.
The judges said only Congress can create new taxes under the Constitution.
The ruling left open whether consumers and companies could receive refunds for the estimated $130bn generated by the tariffs.
The court did not address refunds, and further legal disputes are expected.
Hours after the decision, Trump signed a proclamation under a different law to impose a new 10% global tariff.
He later announced that he would raise the rate to 15%.
Why the Court Declared Major Tariffs Unlawful
The ruling applies only to tariffs Trump imposed under the International Emergency Economic Powers Act.
This law allows presidents to regulate trade during national emergencies.
Trump invoked the law in February 2025 to tax goods from China, Mexico, and Canada.
He argued that fentanyl trafficking from those countries created an emergency.
Later, he imposed tariffs between 10% and 50% on goods from almost every country.
He said the US trade deficit posed an extraordinary and unusual threat.
The court said Congress must approve new taxes and that the emergency law does not cover revenue-raising tariffs.
Some tariffs remain unaffected by the ruling.
These include industry-specific tariffs on steel, aluminium, lumber, and automotives.
Trump imposed these measures under Section 232 of the Trade Expansion Act of 1962 and cited national security concerns.
New Temporary Tariffs Under a Different Legal Route
After the ruling, Trump issued a proclamation under Section 122 of the 1974 Trade Act.
This rarely used provision allows temporary global tariffs of up to 15% for 150 days.
Congress must then decide whether to extend or replace them.
Trump said he would raise the new global tariffs from 10% to 15%.
Experts say Trump could try to bypass Congress by letting the tariffs expire and then declaring another emergency.
Analysts from the Cato Institute raised this scenario.
The White House said Trump is using Section 122 to address international payment problems and rebalance trade.
The administration is also exploring tariffs under Section 301 of the 1974 Trade Act.
Section 301 allows the US Trade Representative to investigate foreign trade practices.
The government can impose tariffs if it finds unfair or discriminatory policies.
The administration can also continue tariffs under Section 232 of the 1962 law.
These measures require investigations and take time to implement.
An economist said these requirements can make tariffs harder to challenge and harder to remove.
Treasury Secretary Scott Bessent said combining these tariff tools could keep revenue nearly unchanged in 2026.
Will Consumers and Businesses Receive Refunds
Trump argued that tariffs generate revenue for the US Treasury and support the economy.
The government collected tens of billions of dollars from companies importing foreign goods.
Estimates place the total near $130bn.
The Supreme Court did not give guidance on refunds.
Trump said lawsuits could delay any refunds for years.
Bessent also said refund disputes could last for years.
He described the collected revenue as being in dispute because the court gave no instructions.
The US international trade court will likely decide the issue.
Experts say large companies are more likely to pursue refunds because the process is complex.
Alex Jacquez from the Groundwork Collective said more than 1,000 businesses had already requested refunds before the ruling.
He expects that number to rise.
Illinois Governor JB Pritzker demanded $1,700 refund cheques for each household.
Trump has previously floated the idea of tariff rebate cheques.
Which Tariffs Are Active Now
The new tariffs were scheduled to start on 24 February at 12:01 EST and apply to imports from all countries.
A White House official said countries with trade deals, including the UK, India, and the EU, will face the global tariff.
These countries must still follow previous trade concessions.
Some goods will be exempt to protect the US economy and target the tariffs more precisely.
Exempt categories include critical minerals, metals, energy products, natural resources, food crops, pharmaceuticals, electronics, cars, trucks, and aerospace products.
Informational materials, donations, and accompanied baggage will also be exempt.
The exemptions are broad and do not list every specific item.
Goods under the USMCA trade agreement will remain exempt.
Canada has often said it benefits from very low tariff rates under that deal.
Textiles and apparel from several Central American countries will remain duty-free under the regional free trade agreement.
Trump said he will keep tariffs on low-cost goods.
He ended the de minimis exemption that allowed goods worth $800 or less to enter without tariffs.
