Trump's Tariffs Are Dead. Long Live Trump's Tariffs
What just changed. Kavanaugh's warning. About those refunds. Lutnick's family hedge. And a Q&A with a key attorney on the winning side.
For daily news updates and analysis, be sure to follow us on Instagram. If you are able to support independent journalism, please make a tax-deductible donation to News Not Noise here.
Six Supreme Court justices — including two Trump appointees – affirmed Friday what the Constitution has always said: Congress imposes taxes. Congress sets tariffs. Not the President. The separation of powers is still a thing, for now.
This hasn’t stopped the president from asserting that he has the power to “do tariffs” — and he’s still trying. But the ruling drew a red line for an administration that has spent much of the second term testing whether any exist. Below we get into all of it: the legal reasoning, the economic fallout, what comes next.
The coalition holding the line is not who you might expect. Ilya Somin is chair in constitutional studies at the right-leaning Cato Institute and a constitutional law professor at George Mason University. He was also a member of the legal team representing the small businesses that brought this case to the Supreme Court. I spoke with him shortly after the ruling came down. He walks through the legal arguments, what this means for the power of the presidency and Congress, what happens next for businesses due refunds, and whether Trump’s new 10% global tariff is likely to survive. Watch or listen below. You can also find Somin’s work at the Volokh Conspiracy Blog.
The Tariff Issue
Tariffic: The Supreme Court on Friday struck down Trump’s emergency or “reciprocal” tariffs — the ones he’s been wielding like a cudgel against the global economy — and ruled that he never had the legal authority to impose them in the first place. This is bigger than an economics decision. The LA Times called this “Trump’s most significant defeat at the Supreme Court.” The New York Times called it the Supreme Court’s “declaration of independence.” Neal Katyal, who argued the case, called it “one for the history books,” a “total victory,” and a “reaffirmation of our deepest constitutional values.” What followed was a textbook Trump meltdown. He disputed the Court’s logic, attacked the six Justices who voted for it as “fools and lapdogs,” and said his nominees who voted against him, Justices Coney Barrett and Gorsuch, were “an embarrassment to their families.” He also claimed the ruling actually granted him more powers (it doesn’t), and insisted his administration will continue imposing tariffs under other authorities — then announced a new 10% global tariff. Here’s what we know.
Rule of Law: Chief Justice John Roberts was joined by the Court’s three liberals and two Trump appointees, Justices Amy Coney Barrett and Neil Gorsuch, in ruling Trump’s tariffs illegal. To impose the tariffs, Trump invoked a 1977 law called the International Emergency Economic Powers Act (IEEPA). It grants presidents the power to “regulate” imports and exports during a national emergency. But as Roberts noted, the law “contains no reference to tariffs,” and until Trump “no president has read IEEPA to confer” the power to impose tariffs. “The fact that no President has ever found such power in IEEPA,” Roberts wrote, “is strong evidence that it does not exist.” Instead, as the Court concluded, the Constitution always clearly granted Congress the power to impose taxes, not the president.
Dissent: Justices Samuel Alito, Clarence Thomas, and Brett Kavanaugh dissented. Kavanaugh insisted that Trump used IEEPA appropriately, noted some of the alternative methods Trump could use to impose tariffs, and warned that nullifying the tariffs would cause chaos. Vice President JD Vance accused the Court of “lawlessness.”
Here’s What This Means: With this ruling, 60% of Trump’s tariffs “effectively vanish,” one analyst noted. That has several immediate implications.
First: This is a major win for the rule of law, which business leaders hope will provide desperately needed stability for companies and nations struggling to cope with Trump’s capricious and chaotic imposition of tariffs. Businesses across the country and around the world celebrated the ruling. A major German industry group called the ruling a “strong signal for the rules-based trading system” and “clear proof … the separation of powers in the USA is still going strong.”
Second: Trump can no longer use reciprocal tariffs as a bully stick in negotiations with other countries as he did before. It also casts uncertainty on the trade deals made using those tariffs (or the threat of them). Trump on Friday claimed “many” of his deals will remain while “some” won’t stand, but insisted the latter would “be replaced with the other tariffs.” Crystal clear.
Third: The US government just lost a major source of revenue. Tariffs were expected to generate about $3 trillion over the next several years, income the Trump administration counted on to justify passing sweeping tax cuts. But now much of that expected income — between $1.5 and $1.9 trillion — is gone. That could blow a hole in the budget and send the national debt soaring by trillions.
Fourth: By some estimates, over 90% of the cost of Trump’s tariffs were passed on to consumers. They collectively amounted to a tax increase of $1,000 per US household in 2025, according to the Tax Foundation, which estimated they would cost households $1,300 on average in 2026. Not anymore.
Where’s Our Money? Then there’s the question of refunds. Katyal, the lawyer who argued this case, said on CNN that “the government said we will get the refunds if we win,” and insisted that there is a well established process for providing those refunds. Justice Kavanaugh suggested otherwise, warning in his dissent that refunding money from tariffs would be a “mess.” Asked about the refunds at an Economic Club of Dallas event today, Treasury Secretary Scott Bessent said, “I have a feeling the American people won’t see it.” For his part, Trump complained the Justices took “months and months to write an opinion and they don’t even discuss that point.… I guess it has to get litigated for the next two years.” Over 1,000 companies have sued the administration for tariff refunds, including major corporations like Costco. The Trump administration collected between $200 and $300 billion from tariffs in 2025, the majority from the tariffs just ruled illegal. The administration could be on the hook for up to $175 billion. In our informed view, that’s a lot.
The Good, Bad, and Ugly: Small businesses have asked the Trump administration to issue refunds automatically. In reality, the process will likely be drawn out and require litigation. That could take years, and one economist warned it would be “a particularly unfair burden for smaller importers that lack the resources to litigate tariff refund claims yet never did anything wrong.” As Justice Kavanaugh noted, billions of dollars of refunds may go to importers and businesses who already passed on the costs of tariffs to others, such as by increasing prices. If they also pass on the benefits of refunds — such as by lowering prices — some analysts think the refunds could “turbocharge consumption” and “improve the outlook on inflation.” Note: If you’re a small business owner Ilya Somin advises you consult a trade attorney or small business association to assess your legal options.
Bet Paid Off: Commerce Secretary Howard Lutnick has been a staunch supporter of Trump’s tariffs. But a firm run by his sons has spent months buying the rights to tariff refunds for 20 or 30 cents to the dollar. Think of this as shorting – or betting against – Trump’s tariff policy. Thanks to the Court’s ruling, the firm may now be able to cash in on its investments — and make millions, potentially billions, betting that the policy their father is promoting will be deemed unconstitutional. Heads they win, tails you lose.
Mafioso: Trump on Friday accused the Justices who voted against him of being “disloyal to the Constitution” and “unpatriotic.” He even claimed that “the Court has been swayed by foreign interests” and accused Justices of being influenced by “slimeballs” from foreign countries. (He did not elaborate when asked.) He said the three liberal Justices are “a disgrace to our nation.… They’re an automatic no, no matter how good a case you have. No, you can’t knock their loyalty. It’s one thing you can do with some of our people.” A marked shift in tone from the Trump who was caught thanking Chief Justice John Roberts shortly after the Court affirmed presidential immunity; just last month Trump said, “I’m going to kiss his ass for a long time.” Trump on Friday did lavish praise on the three Justices who voted in his favor. He called Justice Kavanaugh a “genius” and said he was “proud of him.”
Seeing Red: Many Republicans joined Democrats to praise the Court’s decision. Sen. Rand Paul (R-KY) said Justices “defended the Constitution.” Rep. Don Bacon (R-NE) said “the Constitution’s checks and balances still work” and called on Congress to “defend its own authorities and not rely on the Supreme Court” going forward. Others fretted about the implications of the decision and Trump’s response. One Republican strategist said the Court “threw Trump’s economy a life preserver, and the president is refusing it and demanding an anchor.” A GOP official complained to Politico that Trump “should’ve gotten congressional approval.… Why must we fuck ourselves?”
What’s Next: Trump on Friday imposed a global 10% tariff and announced his administration would launch new investigations to justify further tariffs. When asked about congressional approval, he insisted he doesn’t have to work with Congress and has “the right to do tariffs.” The Trump administration has spent months preparing for this situation; Secretary Bessent claimed on Friday the alternative tariffs “will result in virtually unchanged tariff revenue in 2026.” How will Trump justify reimposing tariffs? There are at least five methods through which Trump could try to continue imposing tariffs, each with restrictions on speed and severity. We explain them below.
Keep reading for…
💡 A table explaining the five methods Trump could use to keep — and even expand — his tariffs. He’s already invoked two of them.
➡️ Turns out there might’ve been voter fraud in Georgia after all. Trump’s $10 billion gift for peace. The first royal arrest in nearly 400 years.
🎤 Something quiet and radical is happening in living rooms across America. I saw it this week. And came away with hope… and a new playlist. Details below.
All this and more is available for paid subscribers. Your support makes our work possible. Thank you!
 | A guest post by
|