The US Supreme Court has ruled that former President Donald Trump exceeded his authority by imposing broad tariffs on Canada, Mexico, and other countries under emergency powers, striking down a key component of his trade and economic strategy.
In a 6‑3 decision in Learning Resources, Inc. v. Trump, the Court sided with lower courts that found Trump had improperly used the International Emergency Economic Powers Act (IEEPA) to justify tariffs tied to national emergencies, including fentanyl trafficking and trade deficits.
Chief Justice John Roberts wrote that while the law allows the president to take action in economic emergencies, it does not authorize tariffs.
The ruling does not affect all of Trump’s tariffs but specifically invalidates those implemented under the IEEPA.
Wedbush noted that the statute “was focused on the regulation of imports, rather than the tariffing of imports,” and described the decision as “a clear blow to the Trump tariff policy.” The firm added that alternative avenues, such as Section 232, Section 301, and Section 122, remain available for imposing tariffs.
The decision comes at a critical moment for global supply chains, as businesses have already begun adjusting operations to navigate the complex tariff landscape. Wedbush highlighted that with roughly $133.5 billion in tariff revenue potentially affected, “this would act as a net positive for tech with financial relief for many companies while creating greater supply chain visibility, especially coming from the Asia supply chain.”
“This will be a very noisy situation but for the tech space and AI trade it’s a net positive out of the gates in our view,” the firm concluded.
US stocks moved higher on the news after struggling earlier in the session on weaker-than-expected Q4 growth and a higher PCE inflation print. Just before noon, the Nasdaq was up 0.8%, the S&P 500 added 0.4%, and the Dow Jones was up 0.1%.
“A decision by the US Supreme Court to strike down presidential administration "reciprocal" tariffs, potentially leading to a $175 billion refund, helped indices back into the green,” IG chief technical analyst Axel Rudolph said.
“Meanwhile, oil climbed to a six-month high amid escalating US–Iran tensions, while the greenback reached a one-month peak on safe-haven demand, alongside gains in precious metals."