By Chris Clayton, DTN Ag Policy Editor and Todd Neeley, DTN Environmental Editor

ARLINGTON, Va. (DTN) -- After months of anticipation, the U.S. Supreme Court on Friday stunned President Donald Trump and his administration by ruling the president doesn't have authority under the International Emergency Economic Powers Act to set sweeping tariffs against trade partners.

The ruling will immediately generate questions about trade pacts reached by the Trump administration, including announcements that include greater market access for agricultural commodities in agreements with the United Kingdom, Japan, India, Indonesia and China. Tariffs initially prompted China to stop buying U.S. soybeans, then an agreement was reached last October that assured China would buy 12 million metric tons (mmt), followed by years with 25 mmt in purchases.

The High Court handed down a 6-3 decision against the president's tariff regime despite concerns expressed by Trump and officials that ruling against the tariffs would risk new trade deals that have been negotiated along with hundreds of billions of dollars paid to the U.S. Treasury by importers.

Despite the ruling, it's anticipated Trump will readjust his tariff strategy by imposing tariffs through investigations targeting specific products led by the Commerce Department and the U.S. Trade Representative's Office.

The court ruling pointed to the multiple executive orders handed down by Trump involving tariffs against Canada, China and Mexico over illegal drugs along with different proclamations regarding trade deficits hollowing out manufacturing and impacting critical supply chains. Trump used the International Emergency Economic Powers Act (IEEPA) to declare national emergencies and impose various tariffs on countries.

"Since imposing each set of tariffs, the president has issued several increases, reductions, and other modifications," the Supreme Court stated.

The ruling spelled out Congress has historically delegated tariff authority explicitly and with limits, which it did not do in IEEPA. Along with that, Trump's interpretation would grant sweeping, unlimited tariff power without clear congressional authorization.

The ruling comes a week after the New York Federal Reserve Bank issued a report citing that nearly 90% of the tariff costs were borne by U.S. consumers and businesses.

The tariffs also affect only certain sectors in some countries. For instance, the U.S. set a 35% tariff on Canadian imports, but 83% of Canadian imports are exempt from U.S. duties under the U.S.-Mexico-Canada Agreement (USMCA), the New York Fed noted.

DEMANDS FOR IMMEDIATE REFUNDS

The ruling will open the door for businesses filing for potentially hundreds of billions in refunds.

The Wall Street Journal had reported, for instance, that Deere & Co said Thursday just under $600 million in tariff costs were tied to Trump's use of the IEEPA.

Following the Supreme Court decision, a small-business group calling itself "We Pay the Tariffs" called on the Trump administration to provide refunds to them.

Dan Anthony, executive director of the group, said in a statement the court's ruling was important to small businesses that have been "bearing the crushing weight" of tariffs. The group is a coalition of more than 800 small businesses launched in 2025.

"They've taken out loans just to keep their doors open," he said.

"They've frozen hiring, canceled expansion plans and watched their life savings drain away to pay tariff bills that weren't in any budget or business plan. Today, the Supreme Court has validated what we've been saying all along: These tariffs were unlawful from the start."

Anthony said the administration's "only responsible course of action" is to establish an automatic refund process.

"With refund money back in their hands, American small businesses will do exactly what they've been telling us they would do all along: hire workers, expand operations, invest in inventory, pay down debt and contribute to their local economies," he said.

"Returning these funds will provide local economic impact from the ground up, putting money directly into the businesses that drive local job creation and economic growth."

He said small businesses are concerned that the administration would respond by reimposing tariffs through other legal channels.

"Small businesses cannot afford for the administration to double-down on failed tariff policies," Anthony said.

DISSENTERS

The three dissenters in the case were Justices Brett Kavanaugh, Samuel Alito and Clarence Thomas.

Kavanaugh wrote the majority improperly limits presidential authority and that the IEEPA clearly allows the president to regulate imports. Historically, Kavanaugh added, tariffs have been a way to regulate commerce. Kavanaugh stated Trump might not be able to impose tariffs under the ruling, but Trump would have authority to ban imports instead.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on social platform X @ChrisClaytonDTN

Todd Neeley can be reached at Todd.Neeley@dtn.com

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