TOKYO - The U.S. Supreme Court has ruled that the core of the "Trump tariffs" is illegal.
The policy of protecting U.S. industry and reviving manufacturing by imposing high tariffs on foreign products had already begun to show signs of limitation, and the administration suffered a complete defeat in the latest court ruling.
The tariffs levied by President Donald Trump have pushed up the prices of imported goods, adding to inflationary pressure in the United States. The Federal Reserve Bank of New York released an analysis saying that U.S. consumers and firms bore 90 percent of the cost.
Since Trump took office again in January 2025, there has been no strong recovery in U.S. manufacturing employment. The flaws in his championed high-tariff policy were evident in both public perception and the data.
Against that backdrop came the latest ruling. Regarding the International Emergency Economic Powers Act, which Trump cited as the legal basis for imposing the tariffs, the court made clear that IEEPA does not grant the president the authority to impose tariffs.
Trump rejected the ruling and signed a proclamation invoking a new 10 percent tariff under Section 122 of the Trade Act, but it is valid for only 150 days. Any extension would require approval from Congress, which holds tariff authority, and that hurdle is also high.
Even with conservative justices he appointed joining the ruling, the Supreme Court has effectively told Trump that the high-tariff policy is untenable. Yet he appears undeterred, intent on patching together misguided policies and forcing them through.
While tariffs on automobiles and steel imposed under Section 232 of the Trade Expansion Act were outside the scope of the latest ruling, the curbs placed on arbitrary tariff actions are likely to have a favorable effect on business sentiment among companies in Japan and elsewhere.
A Japan-U.S. memorandum on $550 billion in Japanese investment in the United States had explicitly stated that Washington could raise tariffs again if Japan refused to provide funding, but the latest ruling has also considerably reduced the likelihood that Japan will face excessive pressure in bilateral talks.
The Supreme Court did not issue a ruling this time on refunds to companies that had paid the tariffs. Still, many companies have already filed lawsuits seeking reimbursement, and the decision is expected to provide a tailwind for those pressing for refunds.
Although the Trump administration succeeded in its attack on Venezuela in early 2026, it has drawn harsh public criticism over incidents such as the fatal shooting of two U.S. citizens during a crackdown on illegal immigrants in Minneapolis, Minnesota, in the U.S. Midwest.
Trump is facing mounting headwinds, as his name has appeared in disclosed documents related to late U.S. financier Jeffrey Epstein, who was charged with trafficking girls for sexual exploitation. Now, even his signature policy has been rejected by the judiciary.
For these reasons, with the November midterm elections approaching, he has launched an attack on Iran in an attempt to divert public attention abroad, and there is also concern that he may step up calls to effectively "nationalize" election administration, which is handled by the states.
If the midterm elections put Trump in an even worse position, Vice President JD Vance and Secretary of State Marco Rubio, who have pledged their loyalty to him thus far, will likely shift their focus to their own political survival ahead of the 2028 presidential election.
If that happens, Trump's political clout will wane by November 2026, when he will have just over two years left in office. The Supreme Court ruling could prove to be a first step in that direction.
(Takashi Imamura was born in Toyama Prefecture in 1966. He graduated from Hitotsubashi University in 1989 and joined Marubeni Corp. From 2008 to 2017, he served as head of the Washington office of Marubeni's U.S. subsidiary. He is well versed in U.S. economic and political affairs.)
