In a case closely watched by corporate America and indeed the entire world, the U.S. Supreme Court affirmed a Federal Circuit ruling in favor of five small business clients, confirming that the International Economic Emergency Powers Act (IEEPA) does not authorize the President of the United States to impose the “Liberation Day” trade deficit tariffs announced in April 2025 and since revised on multiple occasions.

In a 6-3 decision, the Court ruled that the U.S. Constitution places the authority to impose taxes, including tariffs, in Congress, and that IEEPA’s language authorizing the President to “regulate importation” does not permit him to impose tariffs, let alone ones with such sweeping economic effects.

“The Court’s decision is a huge win not only for thousands of American businesses, large and small, who paid these sweeping tariffs, but also for the Constitution—which the founders carefully designed to prevent any of our three branches of government from becoming all powerful,” said Wilson Sonsini Senior Of Counsel Michael W. McConnell, lead counsel of record for the plaintiffs challenging the tariffs.  “Indeed, this is probably the biggest separation-of-powers decision involving the President’s control over the economy in 75 years—when the Court decided the steel seizure case of 1952.”

Writing for the majority, Chief Justice Roberts began by quoting James Madison’s observation that the Constitution gave “Congress ‘alone . . . access to the pockets of the people.’”  The Court went on to explain that, under our Constitution’s system of separated powers, the “extraordinary” economic and political power asserted by the President—“the power to unilaterally impose tariffs of unlimited amount, duration, and scope”—thus required “clear congressional authorization.”  The Court concluded, however, that “IEEPA’s grant of authority to “regulate . . . importation” falls short. IEEPA contains no reference to tariffs or duties. The Government points to no statute in which Congress used the word “regulate” to authorize taxation. And until now no President has read IEEPA to confer such power.”  The Court thus ruled that the sweeping trade-deficit tariffs at issue are invalid.

The Court’s landmark decision produced seven separate opinions.  Justices Gorsuch and Barrett each joined the principal opinion in full, but wrote separate concurring opinions.  Justice Kagan, writing for herself and Justices Sotomayor and Jackson, concurred in part and in the judgment.  Justice Jackson wrote an opinion concurring in part and in the judgment. Justice Thomas filed a dissenting opinion, and Justice Kavanaugh likewise filed a dissenting opinion, in which Justices Thomas and Alito joined.

The Wilson Sonsini team representing the plaintiffs included McConnell, Steffen Johnson, Wilson Sonsini partner and co-chair of the firm’s Supreme Court and Appellate practice, and Wilson Sonsini Of Counsel Paul Harold.  The firm served as co-counsel together with Jeffrey Schwab, Reilly Stephens, and James McQuaid of Liberty Justice Center, Neal Katyal, Colleen Roh Sinzdak, Chase Hanson, Jessica Huang, and Samantha Ilagan/lawyers of Milbank LLP, and Professor Ilya Somin of George Mason University.

The attorneys in Wilson Sonsini’s dedicated Supreme Court and Appellate Practice have prevailed in high-profile cases involving a host of cutting-edge issues of law, including landmark litigation involving the internet, antitrust, patent, securities, the First Amendment, and constitutional law.

Read the full Supreme Court opinion here and the plaintiffs’ brief here.

About Wilson Sonsini Goodrich & Rosati
For more than 60 years, Wilson Sonsini’s services and legal disciplines have focused on serving the principal challenges faced by the management and boards of directors of business enterprises. The firm is nationally recognized as a leading provider to growing and established clients seeking legal counsel to complete sophisticated corporate and technology transactions; manage governance and enterprise-scale matters; assist with intellectual property development, protection, and IP-driven transactions; represent them in contested disputes; and/or advise them on antitrust or other regulatory matters. With deep roots in Silicon Valley, Wilson Sonsini has more than 1,000 attorneys and 17 offices in 16 technology, business, and regulatory markets across the United States, Asia, and Europe. For more information, please visit www.wsgr.com.