Supreme Court Rules Against Tariffs

The Supreme Court ruled Friday that the administration exceeded its authority using the International Emergency Economic Powers (IEEP) Act of 1977 to impose broad tariffs on imports from a wide range of countries.

The court ruled that the president must have clear congressional authorization to impose tariffs, and that the IEEP, which doesn’t mention tariffs, does not provide that authorization. Notably for brewers, this ruling only covers tariffs imposed using the IEEP as their basis for authority and does not include tariffs imposed under other statutes, such as the “section 232” tariffs imposed on steel and aluminum.

What Happens Next: Tariffs Could Return Under New Authority

The 6-3 ruling leaves open a variety of questions. The administration has long signaled that if the IEEP tariffs were struck down, it would look to reimpose many of the same tariffs under different statutes. Many of those statutes may be more limited, so it is not clear what replacing the IEEP tariff regime with new tariffs might look like.

Impact on Ongoing Trade Negotiations

Additionally, the threat of IEEP tariffs was a key part of the administration’s negotiations with other countries as it formulated trade deals. It is possible that countries that have negotiated deals with the United States might look to renegotiate those deals if they view the risks of broad tariffs as lower.

What This Means for Tariffs Already Paid

Next, as of today, it is unclear where this ruling leaves the status of tariffs that have been paid under the IEEP tariff regime. Some companies and importers have begun positioning themselves for refunds, though it is unclear what that process might look like if it happens at all.

Congress’s Role Going Forward

Finally, the Brewers Association will work to learn more about how this ruling might shift Congress’s position on tariffs going forward. To date, Republican lawmakers generally have allowed the president to roll out his economic agenda, including the aggressive use of tariffs. In theory this ruling puts more onus on congressional action if the United States wishes to impose broad tariffs. What role Congress chooses to play and how much they align with the administration versus insert their own policy preferences remain to be seen. The Brewers Association Hill Climb is next week, and members will discuss the impact of tariffs (both IEEP and 232) with hundreds of Congressional offices.

Next Steps

Your Brewers Association government affairs team continues to work to lower your cost of doing business, including tariffs, as a top priority, and we’ll be keeping members updated accordingly as we learn more. 

Contact:

IAN ANDERSON

VP Earned Media

65 N. 4^th St., Suite 1

Carbondale, CO 81623

970.963.4873 ext. 1117 (office)

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