Beginning on Inauguration Day 2025, the Trump administration imposed the most sweeping tariff regime in nearly a century, raising the average effective U.S. tariff rate from 2.4% at the end of 2024 to a peak of approximately 17.4% by mid-2025 — the highest since the Smoot-Hawley Tariff Act of 1930 (Bank for International Settlements, 2025; Yale Budget Lab, January 2026). The tariffs were imposed unilaterally by executive order, primarily invoking the International Emergency Economic Powers Act (IEEPA) — a law designed for economic sanctions, never previously used to impose tariffs. On February 20, 2026, the Supreme Court ruled 6–3 in Learning Resources, Inc. v. Trump, 607 U.S. ___ (2026), that IEEPA does not authorize the President to impose tariffs, invalidating the legal basis for much of the tariff regime and opening the door to billions of dollars in refunds to importers. The administration has since pivoted to alternative legal authorities to maintain some trade measures, but the scope and legality of the tariff regime remain in flux.

Legal and Constitutional Background

Article I, Section 8, Clause 1: The Constitution grants Congress — not the President — the power to “lay and collect Taxes, Duties, Imposts and Excises.” Tariffs are taxes on imports, and the authority to impose them is a core congressional power.

Delegated Tariff Authority: Over the 20th century, Congress delegated limited tariff authority to the President through specific statutes:

• Section 301 of the Trade Act of 1974: Authorizes tariffs in response to unfair trade practices by specific countries.
• Section 232 of the Trade Expansion Act of 1962: Authorizes tariffs to address threats to national security (used for steel and aluminum tariffs).
• Section 122 of the Trade Act of 1974: Authorizes temporary tariffs (up to 150 days, with congressional extension) to address large and serious balance-of-payments deficits.

IEEPA — The Key Statute: The International Emergency Economic Powers Act (50 U.S.C. § 1702) authorizes the President, upon declaring a national emergency, to “investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit . . . importation or exportation.” The Trump administration interpreted “regulate . . . importation” as including the power to impose tariffs. The Supreme Court disagreed.

***Learning Resources, Inc. v. Trump*, 607 U.S. ___ (2026):** The Supreme Court held 6–3 that IEEPA does not authorize the President to impose tariffs. Chief Justice Roberts, writing for the majority (joined by Sotomayor, Kagan, Gorsuch, Barrett, and Jackson), held that the power to “regulate” importation does not include the power to levy taxes or duties — a power exclusively reserved to Congress. Three justices in the majority (Roberts, Gorsuch, Barrett) further held that even if IEEPA were ambiguous, the major questions doctrine requires clear congressional authorization for such a significant exercise of power, which IEEPA does not provide. Justices Thomas, Kavanaugh, and Alito dissented (K&L Gates summary, February 2026; Oyez, 2026; SCOTUSblog, 2026).

Timeline of Key Actions

• January 20, 2025: Trump signs executive orders invoking IEEPA to impose tariffs on imports. Initial measures include a 10% baseline tariff on all imports, with higher rates for specific countries (Oyez, 2026).
• February–April 2025: Tariffs escalate rapidly. A 20% “trafficking” tariff and additional “reciprocal” tariffs push rates on Chinese goods to over 145%. Canada and Mexico face 25% tariffs on USMCA-noncompliant goods plus 20% fentanyl-related tariffs (PIIE Working Paper 25-13, June 2025; Oyez, 2026).
• April 2, 2025: “Liberation Day” — Trump announces sweeping “reciprocal” tariffs on nearly all trading partners, with rates calculated based on each country’s trade surplus with the U.S. Global markets plunge (PIIE Working Paper 25-13, June 2025).
• April 9, 2025: Administration announces a 90-day pause on the highest “reciprocal” tariff rates, reverting many countries to a 10% baseline. China is excluded from the pause (PIIE Working Paper 25-13, June 2025).
• April 22, 2025: Learning Resources, Inc. and hand2mind, Inc. file suit in D.C. District Court, challenging the legality of IEEPA tariffs. The companies face an increase in import-related costs from $2.3 million (2024) to over $100 million (2025) (Oyez, 2026).
• May 29, 2025: D.C. District Court grants preliminary injunction, finding IEEPA does not authorize tariffs and that the tariffs pose an existential threat to the plaintiffs. The ruling is quickly stayed (Oyez, 2026).
• Mid-2025: U.S. Court of International Trade (CIT) rules similarly in related cases (V.O.S. Selections, Inc.), also stayed on appeal (SCOTUSblog, 2026).
• Summer 2025: Retaliatory tariffs from major trading partners. China imposes up to 65% tariffs on U.S. exports. The European Union applies 20% tariffs on all U.S. exports (PIIE Working Paper 25-13, June 2025).
• September 2025: Supreme Court grants certiorari and consolidates Learning Resources and V.O.S. Selections. Oral arguments are expedited (SCOTUSblog, 2026).
• November 5, 2025: Supreme Court hears oral arguments. Court observers note a majority of justices express skepticism toward the government’s rationale (Wikipedia, Learning Resources v. Trump, 2026).
• January 2026: With Greenland tariffs threatened, the average effective tariff rate reaches 16.9%–17.5%, the highest since 1932 (Yale Budget Lab, January 2026).
• February 20, 2026: Supreme Court issues its decision in Learning Resources, Inc. v. Trump: IEEPA does not authorize tariffs. The 6–3 ruling vacates the IEEPA-based tariffs. Chief Justice Roberts writes the majority opinion. The Court does not rule on the manner of tariff repayment (K&L Gates, February 2026; SCOTUSblog, 2026).
• Post-February 2026: U.S. Customs and Border Protection stops collecting IEEPA tariffs. The administration pivots to Section 122 of the Trade Act of 1974 as an alternative legal basis for maintaining some tariff measures. Section 122 tariffs are limited to 150 days unless extended by Congress (Yale Budget Lab, April 2026; Wikipedia, Learning Resources v. Trump, 2026).
• April 2026: The Yale Budget Lab reports the current tariff regime (post-IEEPA ruling) implies an average effective tariff rate of 9.7%–12.2% pre-substitution. Consumer price increases of 0.7%–1.1% persist (Yale Budget Lab, April 2026).

Key Actors

• Donald Trump — 45th and 47th President of the United States — Imposed tariffs by executive order invoking IEEPA. Campaigned on tariffs as a central economic policy. Characterized the tariffs as necessary to address trade imbalances, fentanyl trafficking, and immigration.
• Jamieson Greer — U.S. Trade Representative — U.S. Trade Representative. Implemented and defended the tariff program.
• Howard Lutnick – Secretary of Commerce — Secretary of Commerce. Involved in trade policy implementation and tariff negotiations.
• Chief Justice John Roberts — Authored the 6–3 majority opinion in Learning Resources v. Trump, finding IEEPA does not authorize tariffs.

Legal Challenges

***Learning Resources, Inc. v. Trump*, 607 U.S. ___ (2026):** The landmark case. The Supreme Court held 6–3 that IEEPA does not authorize the President to impose tariffs. The majority opinion established that: (a) the power to “regulate” importation under IEEPA does not include the power to levy duties; (b) tariffs are taxes, and the taxing power is exclusively congressional; (c) IEEPA had never previously been used to impose tariffs; (d) the major questions doctrine requires clear congressional authorization for such significant economic actions. The Court vacated the D.C. District Court ruling for lack of jurisdiction and affirmed the Court of International Trade’s ruling in V.O.S. Selections (K&L Gates, February 2026; Oyez, 2026).

Refund Litigation: Following the ruling, U.S. Customs and Border Protection established the Consolidated Administration and Processing of Entries (CAPE) system to facilitate refunds for importers who paid IEEPA tariffs. The scope and timeline of refunds remain unresolved (Wikipedia, Learning Resources v. Trump, 2026).

Section 122 Authority: The administration’s pivot to Section 122 of the Trade Act of 1974 faces its own legal constraints: Section 122 tariffs are limited to 150 days (extendable by Congress), limited to 15% ad valorem or its equivalent, and may only be imposed to address “large and serious” balance-of-payments deficits. Whether the current trade situation qualifies, and whether Congress will extend the tariffs, remains uncertain (Yale Budget Lab, April 2026).

Remaining Tariff Authorities: Tariffs not based on IEEPA — including Section 232 steel and aluminum duties, Section 301 China tariffs from the first term, and some auto sector tariffs — remain in effect and were not affected by the Learning Resources ruling.

Impact Assessment

Consumer Prices: The Yale Budget Lab estimated that the 2025–2026 tariff regime increased consumer prices by 1.1%–1.3% in the short run, representing an average household real income loss of approximately $940–$1,751 per year in 2025 dollars (Yale Budget Lab, January 2026; April 2026).

GDP and Employment: Tariffs reduced U.S. real GDP growth by approximately 0.4 percentage points in 2026. The unemployment rate is estimated to be 0.6–0.7 percentage points higher than it would have been without the tariffs. Payroll employment is estimated to be approximately 1.3 million lower by end of 2026 (Yale Budget Lab, January 2026).

Global Impact: The Bank for International Settlements estimated that U.S. tariffs, combined with retaliatory measures, reduced U.S. GDP by approximately 0.9% and caused significant output drops across major trading partners. Manufacturing sectors were most affected due to reliance on intermediate inputs (BIS Working Paper 1316, 2025).

J.P. Morgan Global Research estimated that the tariff regime, including retaliation, could reduce global GDP by 1%, with the risk that sentiment and financial market effects could double the direct impact (J.P. Morgan, 2025).

Supply Chain Disruption: Tariffs forced companies to restructure supply chains, often at significant cost. Many businesses — particularly small and mid-sized importers like Learning Resources — faced existential financial pressures. The petitioners in Learning Resources saw their import costs increase from $2.3 million to over $100 million in a single year (Oyez, 2026).

Retaliatory Tariffs: China imposed tariffs of up to 65% on U.S. exports. The EU applied 20% tariffs on all U.S. exports. Canada and Mexico imposed retaliatory measures. These counter-tariffs particularly harmed U.S. agricultural exporters, manufacturers, and service providers dependent on foreign markets (PIIE Working Paper 25-13, June 2025).

Use as Political Weapon: The administration threatened tariffs on Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland as part of Trump’s effort to pressure Denmark into selling Greenland — using trade policy as leverage for a geopolitical objective unrelated to trade (Yale Budget Lab, January 2026).

State-Level Responses

• Agricultural states dependent on exports (Iowa, Nebraska, Kansas, Texas) were disproportionately affected by retaliatory tariffs on U.S. farm products.
• Port cities and states with significant import-dependent industries (California, New York, New Jersey) bore higher costs from increased import duties.
• Some states explored legal challenges to the tariffs’ economic impact on their economies and residents.
• The bipartisan nature of the Learning Resources ruling — with conservative justices Gorsuch and Barrett joining the liberal justices — reflected the broad recognition that unilateral presidential tariff authority exceeded constitutional bounds.

For Trump Supporters: Questions Worth Considering

Tariffs are taxes. Unlike income taxes, they are hidden in the price of goods — you pay them every time you buy an imported product or a product made with imported components, which is nearly everything. The Yale Budget Lab estimated the 2025 tariffs cost the average American household between $940 and $1,751 per year. When the President imposes tariffs without Congress, he is imposing taxes without the consent of your elected representatives — the very act that sparked the American Revolution. Is that the kind of power you want any president to have?

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Sources

1. Learning Resources, Inc. v. Trump, 607 U.S. ___ (2026). https://www.law.cornell.edu/supct/pdf/24-1287.pdf
2. Wikipedia, “Learning Resources, Inc. v. Trump,” 2026. https://en.wikipedia.org/wiki/Learning_Resources,_Inc._v._Trump
3. SCOTUSblog, “Learning Resources, Inc. v. Trump (Tariffs) (24-1287),” 2026. https://www.scotusblog.com/cases/learning-resources-inc-v-trump/
4. Oyez, “Learning Resources, Inc. v. Trump,” 2026. https://www.oyez.org/cases/2025/24-1287
5. K&L Gates, “Summary: Supreme Court Decision on IEEPA Tariffs,” February 20, 2026. https://www.klgates.com/Summary-Supreme-Court-Decision-on-IEEPA-Tariffs-2-20-2026
6. PIIE, “Working Paper 25-13: The global economic effects of Trump’s 2025 tariffs,” June 2025. https://www.piie.com/sites/default/files/2025-06/wp25-13.pdf
7. Yale Budget Lab, “State of U.S. Tariffs: January 19, 2026,” January 2026. https://budgetlab.yale.edu/node/1313/pdf
8. Yale Budget Lab, “State of U.S. Tariffs: April 8, 2026,” April 2026. https://budgetlab.yale.edu/sites/default/files/page_to_pdf/1466/publication_1466.pdf
9. J.P. Morgan Global Research, “US Tariffs: What’s the Impact?” 2025. https://www.jpmorgan.com/insights/global-research/current-events/us-tariffs
10. Bank for International Settlements, “Assessing the macroeconomic impacts of the 2025 US tariffs,” Working Paper 1316, 2025. https://www.bis.org/publ/work1316.pdf
11. U.S. Const., Art. I, § 8, cl. 1.
12. International Emergency Economic Powers Act, 50 U.S.C. § 1702.
13. Trade Act of 1974, Section 122, 19 U.S.C. § 2132.