Trump promises to impose tariffs through 'alternatives' after U.S. Supreme Court strikes down IEEPA tariffs
OTTAWA AND WASHINGTON, D.C. — Just hours after the United States Supreme Court struck down U.S. President Donald Trump’s use of emergency powers to impose tariffs, the president vowed to use other laws to impose global levies.
The highest court ruled on Friday that the emergency authority that U.S. President Donald Trump relied on to impose sweeping tariffs on Canada and countries around the world “falls short” and said the president violated federal law when he imposed the trade barriers.
The decision, which was written by U.S. Supreme Court Chief Justice John Roberts, was a 6-3 ruling.
Last year, Trump imposed tariffs on countries around the world using a law meant for national emergencies called the International Emergency Economic Powers Act (IEEPA). The justices upheld a lower court’s ruling that the use of the Act exceeded his authority.
Trump called Friday’s ruling “deeply disappointing” but said his administration will use “other alternatives” to replace the tariffs that were struck down by the court.
Trump cited Section 232 of the Trade Expansion Act of 1962, sections 122, 201, 301, of the Trade Act of 1974 and Section 338 in the Tariff Act of 1930.
“Today, I will sign an order to impose a 10 per cent global tariff under Section 122, over and above our normal tariffs already being charged,” he said, during a press conference at the White House. “And we’re also initiating several section 301, and other investigations to protect our country from unfair trading practices of other countries and companies.”
Section 122 of the Trade Act of 1974 allows tariffs to be imposed under what’s called the “Balance of payments authority” which gives the president authority to impose a temporary surcharge on imports, though they cannot exceed 15 per cent or exceed a period of 150 days “unless such period is extended by Act of Congress.”
As noted by Trump, Friday’s ruling does not impact the Section 232 tariffs that the president has imposed on Canadian steel, aluminum, lumber and the auto sector.
In a statement on Friday, Canada-U.S. Trade Minister Dominic LeBlanc welcomed the decision, but said work will continue to get those Section 232 tariffs removed.
“The decision of the Supreme Court of the United States strengthens Canada’s position that the tariffs imposed by the United States under the IEEPA are unjustified,” he said, in a post on X.
“Although Canada has concluded the best trade agreement with the United States among all its trading partners, we recognize that there is still much to be done to support Canadian businesses and workers who continue to be affected by the tariffs imposed under Section 232 on the steel, aluminum, and automotive sectors,” he added.
LeBlanc referenced the upcoming scheduled review of the Canada-United-States-Mexico-Agreement (CUSMA) at the end of his statement, which is scheduled for July of this year.
It could be a game-changer that determines Canada’s position heading into the review of the CUSMA, said Avery Shenfeld, managing director and chief economist of CIBC Capital Markets.
“While this isn’t a cure for tariffs facing Canada in targeted sectors (and actually provides more immediate relief to Canada’s competitors in the U.S. that face reciprocal tariffs on all of their exports) it is nevertheless an improvement in Canada’s negotiating position in the upcoming (CUSMA) talks, by removing the leverage the U.S. had with its threatened 35 per cent fentanyl tariff,” he said.
Currently, Canada’s exports to the U.S. are subject to a 35 per-cent tariff, but nearly 90 per cent of those goods are exempted because they are compliant under CUSMA.
Canada is gearing up for the trade pact’s review this year, with financier Mark Wiseman assuming his post as the new Canadian ambassador to the United States this past week. Prime Minister Mark Carney also announced the appointment of Janice Charette as Canada’s chief trade negotiator.
Mark Warner, international trade and competition lawyer at MAAW Law, said he doesn’t think this latest tariff blow to the president strengthens Canada’s negotiating trade position with the U.S., noting that the president could double down on his tariff regime.
“I don’t see how this weakens him, except in this sense that people think that he’s weakened, and therefore they can drive a harder bargain,” he said. “But the way I read Trump is that that will just lead him to double down and use the authorities he already has.”
The case heard by the U.S. Supreme Court was originally brought forward by several businesses affected by Trump’s tariffs and a dozen U.S. states.
In the ruling, Chief Justice Roberts said IEEPA contains no reference to tariffs or duties.
“The Government points to no statute in which Congress used the word ‘regulate’ to authorize taxation,” the ruling said. “And until now no President has read IEEPA to confer such power.”
Chief Justice Roberts added that in “IEEPA’s half century of existence, no president has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope.”
The three dissenting justices were conservatives Clarence Thomas, Samuel Alito and Brett Kavanaugh.
To date, the U.S. Treasury has collected $264 billion in total tariff revenue, with $133 billion of that amount collected through IEEPA tariffs, according to Toronto-Dominion Bank. In his dissenting opinion, Justice Kavanaugh brought up the issue of refunds on tariffs that have already been collected.
“Refunds of billions of dollars would have significant consequences for the U. S. Treasury,” he wrote. “The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers.”
When pressed by reporters in Washington if he would refund the tariffs, Trump said it was not discussed in the court’s decision and expects the matter to be litigated in the courts over the next several years.
Reaction from Canadian industry and labour was cautious on Friday, given the most impactful tariffs on the Canadian economy remain in place, despite the ruling.
“The Supreme Court’s decision to strike down the use of IEEPA tariff powers is a legal ruling, not a reset of U.S. trade policy,” said Candace Laing, president and CEO at the Canadian Chamber of Commerce, in a statement. “This is certainly not the last chapter of this never-ending story.”
Unifor national president Lana Payne said “Canadian workers should not mistake this for a victory.”
“The risk to Canadian jobs remains severe, with the potential to even increase if Trump looks for new ways to impose tariffs or target Canadian jobs and investment,” she added.
Trump will continue to face domestic pressures on his trade policies, given that congressional midterms are scheduled for later this year.
Last week, U.S. Congress voted down Trump’s tariffs on Canada, with six Republican lawmakers joining the Democrats in reprimanding the president’s trade actions.
National Post
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