Supreme Court Strikes Down IEEPA Tariffs

On February 20, the U.S. Supreme Court ruled in a 6–3 decision in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act (IEEPA) does not grant the President of the United States authority to impose tariffs.

The Court’s decision invalidated the imposition of all tariffs under IEEPA, as reported by Sidley, which includes the specific IEEPA tariffs challenged in the cases before the Court. These tariffs were imposed in response to the fentanyl crisis and the reciprocal tariff regime imposed on goods of almost all countries.

However, Sidley explains that the Court’s decision has no impact on existing tariffs imposed under Section 301 of the Trade Act of 1974, or the tariffs imposed under Section 232 of the Trade Expansion Act of 1962. These include the tariffs on steel, aluminum, copper, automobiles, auto parts, lumber and timber, medium- and heavy-duty trucks, and semiconductors.

A Win for the Beverage Alcohol Industry

Following the Supreme Court’s decision, many organizations in the beverage alcohol industry have spoken out in agreement with the Court’s ruling. Wine & Spirits Wholesalers of America (WSWA) even published a statement applauding the Court’s decision, stating that “the ruling provides important clarity regarding the scope of executive authority and reaffirms Congress’s central role in trade policy.”

“For wine and spirits wholesalers — and the restaurants, bars, retailers, and consumers we serve — certainty and predictability in trade policy are essential,” said Francis Creighton, president and CEO of WSWA, in the statement. “Today’s decision restores clarity and helps stabilize an industry that depends on open markets and longstanding international partnerships,” said Creighton.  

The Supreme Court’s decision marks a wine for the beverage alcohol industry since the tariffs at issue included a 10% base tariff on most imports, along with significantly higher “reciprocal” rates on certain countries. For the beverage alcohol sector, these measures functioned as direct taxes on American businesses and consumers, raising costs throughout the supply chain and placing additional pressure on hospitality businesses.

Michael Bilello, president and CEO of the American Whiskey Association, also praised the Court’s ruling, saying, “The Supreme Court’s decision creates an important opportunity to reset and get trade policy right. American whiskey depends on fair treatment, open markets, and a stable global trading environment to compete and to support American jobs — from distilleries and farms to hospitality and export partners around the world.”

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