Supreme Court limits Trump tariff authority

The U.S. Supreme Court ruled 6-3 that the International Emergency Economic Powers Act (IEEPA) does not authorize a president to impose emergency tariffs during peacetime, striking down the broad tariffs President Donald Trump enacted last year. 

The case, Learning Resources, Inc., et al. v. Trump, centered on whether IEEPA—a law designed to address national emergencies—allows the executive branch to levy tariffs without congressional approval. The Court concluded that it does not.

“The Framers gave ‘Congress alone’ the power to impose tariffs during peacetime,” the majority opinion stated, emphasizing that while the president has certain independent powers in foreign affairs, tariff authority during peacetime does not fall under concurrent executive control.

“The Government thus concedes, as it must, that the President enjoys no inherent authority to impose tariffs during peacetime. And it does not defend the challenged tariffs as an exercise of the President’s warmaking powers. The United States, after all, is not at war with every nation in the world,” Chief Justice of the Supreme Court John G. Roberts, Jr. said upon delivering the Court’s main opinion.

The Court noted that in the almost 50 years since IEEPA’s enactment, no president had previously used it to implement tariffs of this scope.

Notably, the ruling does not affect the separate 25% tariff on imported autos and certain parts imposed under Section 232 of the Trade Expansion Act of 1962 because it is tied to national security. Section 301, which protects against unfair trade practices, and Section 122, related to balance-of-payments, remain intact as well.

What it means for parts and equipment costs

For fleets, the decision touches on a key issue: parts pricing and supply chain stability.

Many replacement components are sourced globally, including tires, brake systems, electronics, and drivetrain parts. The IEEPA tariffs had applied to imports from major U.S. trading partners, including countries that supply significant volumes of commercial vehicle parts.

While the Court’s decision removes that specific layer of tariffs, it does not eliminate all trade-related cost pressures.

Section 232 still can be leveraged for steel, aluminum, vehicles, and parts, while Section 301 allows the president to impose retaliatory tariffs on Chinese parts if violations are found.

For fleets, that means continued uncertainty around replacement parts pricing, particularly for imported components and assemblies used in both light- and heavy-duty applications.

Industry reaction

Financial analysts characterized the ruling as a step in the right direction for import-dependent sectors, but cautioned that broader tariff structures remain in place. 

RBC Capital Markets, LLC analyst Steven Shemesh said the following in a recently-released report:

We view this as a modest net positive for the space, but would argue the decision was largely expected and mostly priced in. The Trump administration has also made clear that they have alternative options to impose levies, which they would look to exercise in the event of this outcome. While some retailers might see some relief based on what workarounds come to fruition, we'd argue the cost outlook for the majority of the retail space is unlikely to change significantly (and these workarounds are likely to be significantly more complex).

The Trump administration also announced a plan to pursue a temporary 10% “global tariff” under Section 122 of the Trade Act of 1974, which allows limited-duration import surcharges under certain economic conditions.

The Specialty Equipment Market Association (SEMA) made the following statement:

“SEMA hopes this court decision enables the space to establish a transition period where American companies can reshore their operations, diversify their supply chains, and re-establish their domestic manufacturing capabilities. We encourage President Trump to continue to remove regulatory barriers that hamper the ability of small manufacturers to thrive domestically."

Dr. Noel Hacegaba, CEO of The Port of Long Beach, stated:

The Port of Long Beach customers and logistics partners depend on clear, predictable trade policy to plan investments, move cargo efficiently, and keep goods flowing to American businesses and consumers. An orderly approach to tariffs helps businesses plan, and ports like Long Beach maximize their contribution to the U.S. economy.

For fleet managers, the practical takeaway is that while one layer of tariffs has been removed, overall cost volatility tied to global sourcing is unlikely to disappear in the near term.

Questions also remain about whether importers will receive refunds for tariffs already collected under IEEPA authority.

In the meantime, fleets should continue monitoring parts sourcing strategies and pricing trends, particularly for high-volume maintenance items where even small percentage cost swings can largely impact operating budgets.