The Supreme Court of the United States has ruled that President Trump’s sweeping tariffs were illegal.

In a 6–3 decision, the Supreme Court shut it down, saying Trump didn’t have the legal authority to impose the tariffs.

Under the Constitution, only Congress can set them.

Now the U.S. could face over  $150billion in potential tariff refunds.

Here’s how this escalated.

In early 2025, Trump declared “national emergencies” over trade deficits, fentanyl smuggling, and migration.

Using the 1977 International Emergency Economic Powers Act (IEEPA), he imposed broad tariffs on multiple countries.

IEEPA was originally designed for serious national security crises, like terrorism or hostile foreign threats.

Trump argued that trade imbalances and drug flows qualified as emergencies threatening the U.S. economy.

Critics said it was an aggressive stretch of executive power.

Businesses importing goods paid billions in tariffs upfront. Most passed those costs directly to consumers through higher prices on electronics, tools, and everyday products.

Studies estimate 80–90% of tariff costs were borne by U.S. businesses and households, not foreign exporters.

In other words, tariffs acted like a hidden tax.

By May 2025, small businesses, trade groups, and several states sued.

The U.S. Court of International Trade ruled the tariffs illegal. A federal appeals court agreed. The Supreme Court fast-tracked the case.

Today, the final decision was made.

The Supreme Court reaffirmed that the Constitution gives Congress the power to impose taxes and tariffs. The president cannot bypass that authority through emergency powers.

If the ruling stands, companies that paid tariffs could demand refunds estimated between $150 billion and $175 billion.

For context, that’s larger than the annual budgets of some federal agencies.

Markets reacted with volatility, dipping at first before stabilizing as investors assessed the long-term impact.