#tariffs

In a part of the opinion joined by Justice Neil Gorsuch and Justice Amy Coney Barrett, Roberts said that Trump’s reliance on IEEPA to impose the tariffs violated the “major questions” doctrine – the idea that if Congress wants to delegate the power to make decisions of vast economic or political significance, it must do so clearly. In 2023, the court relied on the “major questions” doctrine to strike down the Biden administration’s student-loan forgiveness program. In that case and others like it, Roberts observed, it might have been possible to read the federal law at issue to give the executive branch the power it claimed. But “context” – such as the constitutional division of power among the three branches of government – and “common sense” “suggested Congress would not have delegated ‘highly consequential power’ through ambiguous language.”

In cases like this one, Roberts continued, in which the Trump administration contends that Congress has delegated to it “the core congressional power of the purse,” considerations like context and common sense “apply with particular force.” “[I]f Congress were to relinquish that weapon to another branch, a ‘reasonable interpreter’ would expect it to do so ‘clearly.’” And indeed, Roberts said, “[w]hen Congress has delegated its tariff powers, it has done so in explicit terms, and subject to strict limits,” a test that Trump’s tariffs failed here.

Gorsuch, the first Supreme Court justice Trump appointed when he first took office, joined the principal opinion in full but, in a separate concurring opinion, urged Americans to put their faith back into the legislative system.  It was a message that seemed directed toward one person in particular: Trump.  The conservative justice acknowledged that the court’s decision would be “disappointing” for some. He said major decisions affecting Americans are “funneled through the legislative process for a reason.”  “Yes, legislating can be hard and take time. And, yes, it can be tempting to bypass Congress when some pressing problem arises,” Gorsuch wrote. “But the deliberative nature of the legislative process was the whole point of its design.”   “Through that process, the Nation can tap the combined wisdom of the people’s elected representatives, not just that of one faction or man,” he continued.  Since returning to the White House, Trump has sought to circumvent the legislative process and consolidate the executive branch’s power across the board.   “In all, the legislative process helps ensure each of us has a stake in the laws that govern us and in the Nation’s future,” Gorsuch said. “For some today, the weight of those virtues is apparent. For others, it may not seem so obvious.   “But if history is any guide, the tables will turn and the day will come when those disappointed by today’s result will appreciate the legislative process for the bulwark of liberty it is,” he added.

Ford said the US car maker's tariff costs were $900m (£660m) higher than expected last year because of a last minute change to the Trump administration's tariff relief program.

Chief executive Jim Farley said Ford spent double what it had expected on tariffs in 2025 - roughly $2bn - due to "the unexpected and late year change in tariff credits for auto parts".

Separately, Ford had previously disclosed a $19.5bn hit as a result of its shift away from electric vehicle plans. Those charges also contributed to its fourth-quarter net loss of $11.1bn. The vehicle manufacturer had said it was backing away from plans to make large EVs, citing lacklustre demand and recent regulatory changes under Trump. The business case for leaning heavily into EV production, specifically large-sized EV models, has "eroded", the company had said.

In research released Thursday by the Federal Reserve Bank of New York, a group of analysts and economists found that in 2025, the average tariff rate on imported goods rose to 13% from just 2.6% at the start of the year. The New York Fed found that 90% of the cost of increased tariffs, which Trump imposed on goods from Mexico, China, Canada and the European Union, was paid for by companies and often passed on to shoppers. "US firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025."

The reaction from exporters in 2025 was essentially the same in 2018, when Trump imposed certain tariffs during his first term in office – the cost of goods for consumers rose, with little other economic impact recorded, the New York Fed said at the time.

The Kiel Institute for the World Economy, an independent research firm in Germany, said in a report last month that it had found "near-complete pass-through of tariffs to US import prices." Kiel researchers analysed 25 million transactions and found that in exporting countries like Brazil and India, the price of goods from those countries did not decline. "Trade volumes collapsed instead," the Kiel report said, meaning exporters preferred to cut the amount of goods being shipped into the US rather than lower prices.

The National Bureau of Economic Research also found that the pass-through of tariffs was "almost 100%", meaning the US is paying for the increase in prices, not exporting countries.

Similarly, the Tax Foundation, a Washington DC-based think tank focused on US tax policy, found that increased tariffs on goods in 2025 increased costs for every American household. Defining tariffs as a new tax on consumers, the Tax Foundation said the 2025 increases cost the average household $1,000 (£734.30). In 2026, tariffs will cost the same household $1,300. The Tax Foundation said even the "effective" tariff rate, an average rate that takes into account people buying fewer goods in response to increased prices, is now 9.9%, making it the "the highest average rate since 1946". With such impacts on people, the Tax Foundation said any economic benefits of tax cuts included in Trump's "Big Beautiful Bill" will be offset entirely.

Trump’s higher tariffs are certainly raising money. They’ve raked in more than $236 billion this year through November — much more than in years past. But they still account for just a fraction of the federal government’s total revenue. And they haven’t raised nearly enough to justify the president’s claim that tariff revenue could replace federal income taxes — or allow for windfall dividend checks for Americans.

The U.S. trade deficit, meanwhile, has fallen significantly since the start of the year. The trade gap peaked to a monthly record of $136.4 billion in March, as consumers and businesses hurried to import foreign products before Trump could impose his tariffs on them. The trade gap narrowed to $52.8 billion in September, the latest month for which data is available.

New U.S. tariffs have also harmed the company, especially a 46% levy on imports from Vietnam, where iRobot manufactures vacuum cleaners for the U.S. market. The tariffs raised the company’s costs by $23 million in 2025, while making it more difficult to plan for the future, according to iRobot's court filings.

Trump said at the roundtable, adding "this money would not be possible without tariffs."

Another way to spend the money that’s already been spent many times over.

Revlon and canned seafood and chicken producer Bumble Bee Foods have made similar arguments in the trade court.

The tariffs facing the court challenge have raised around $90 billion so far.

But Trump has promised debt reduction, deficit reduction, $2,000 dividend checks and farm bailouts with the money, among other things. All of it would cost hundreds of billions of dollars, if not trillions, more in total than is on track to be collected.

Research by Harvard Business School Professor Alberto Cavallo illustrates the downward trend in the price levels for many retail goods, followed by an acceleration after tariff announcements. Prices on both imported and domestic goods have climbed modestly but steadily since March, even if the hike is still small relative to the size of the tariffs.

The researchers created indexes with daily prices collected by PriceStats, a private firm cofounded by Cavallo that provides online data for over 350,000 products sold by five major US retailers. The indexes allow them to track price changes in specific categories and from countries of origin. Overall, the prices of imported products have increased faster than those made in the US. An extended analysis, going back to January 2024, explores price changes of goods relative to their pre-tariff trend.

Current Tariff Rate: Consumers face an overall average effective tariff rate of 17.9%, the highest since 1934. After consumption shifts, the average tariff rate will be 17.4%. (If IEEPA tariffs are invalidated, the rate would be 9.1%.)

Overall Price Level & Distributional Effects: TBL assumes the Federal Reserve “looks through” the tariffs and allows prices to rise such that the tax burden is felt through prices rather than nominal incomes. The price level rises by 1.3% in the short run, representing a loss of $1,800 for the average household and $1,000 for households at the bottom of the income distribution. (Without IEEPA, the price level impact would instead be 0.6%.)

A theme throughout the argument was a concern shared among several justices and the plaintiffs, summed up neatly by Gorsuch: “Congress, as a practical matter, can’t get this power back once it’s handed it over to the president,” the Trump appointed justice said. “It’s a one-way ratchet toward the gradual but continual accretion of power in the executive branch and away from the people’s elected representatives.”

“We will never get this power back if the government wins this case,” said Neal Katyal, who represented the small businesses challenging Trump’s initiative. “What president wouldn’t veto legislation to rein this power in and pull out the tariff power?”