This story was originally published by CalMatters.
In a major blow against President Donald Trump, the U.S. Supreme Court ruled Friday that he does not have the authority to impose the wide-ranging tariffs that have caused economic uncertainty in the state, nation and beyond.
Trump cited the International Emergency Economic Powers Act of 1977 as he set tariffs on goods from most countries around the world soon after he took office early last year. In a 6-3 decision, the court said only Congress has the broad power to impose taxes on Americans under the act.
“The President enjoys no inherent authority to impose tariffs during peacetime,” Chief Justice John Roberts wrote for the majority. Justices Clarence Thomas, Samuel Alito Jr. and Brett Kavanaugh dissented.
Trump said in a press conference Friday that the decision is “deeply disappointing and I’m ashamed of certain members of the court.” He called the justices appointed by Democratic presidents “a disgrace” and insinuated without providing evidence that they had been swayed by foreign interests. He praised the dissenting justices as showing “love of our country.”
Despite acknowledging that the court’s decision has limited his power, the president said: “But it doesn’t matter because we have very powerful alternatives.” He said he could use other federal statutes for imposing tariffs, rattling off some that Kavanaugh mentioned in his dissent.
He also said he would sign an order imposing an additional 10% tariffs above all other tariffs. When asked for details, White House spokesperson Kush Desai referred CalMatters to Trump’s social media post Friday, which mentions other statutes that give him the authority to impose tariffs.
The president cited Section 122 of the Trade Act of 1974 in imposing the new tariffs. But that particular section is a “stopgap,” said Brian Peck, an expert in international business law and an adjunct law professor at University of Southern California. It gives the administration the power to impose tariffs up to 15% and only for 150 days unless it’s extended by Congress. The law that the Supreme Court said Friday the president can no longer rely on gave the administration more flexibility. Peck said other statutes Trump can use going forward will require his administration to investigate and find justification for different tariffs, and that those investigations will take months.
American businesses and consumers have paid the bulk of the cost of the president’s tariffs, recent studies by researchers for the Federal Reserve Bank of New York and others have shown. In California, the tariffs have affected ports, farms, businesses, workers and consumers in different ways, and have been a factor in persistent inflation.
The state’s trade activity with China dropped so steeply that it is no longer the state’s top trade partner, according to a recent Public Policy Institute of California analysis.
Daniel Payares-Montoya, the researcher for the PPIC who based his analysis on International Trade Administration data, said trade with China has been declining since Trump’s first term, “but to see the dramatic fall, I wasn’t expecting it.”
In 2024, imports from and exports to China comprised 20% of all California trade activity. In 2025, at least through October, that number fell to 13.4%. Mexico became the state’s top trade partner, followed by China and Taiwan.
Payares-Montoya stressed that his analysis wasn’t causal: “I can’t tell what would have happened in the absence of (Trump’s tariff unveiling known as) ‘Liberation Day,’ or if Kamala Harris had won (the presidency).”
The state’s beverage industry was weighed down by tariffs, the analysis showed. California’s beverage exports of brewery, winery and distillery products fell more than 32% compared to the same period in 2024, from over $1.3 billion to $880 million through October, Payares-Montoya found. A big factor was that beverage exports to Canada fell to 16% in 2025 because of a boycott of American products and travel, which also was related to the president’s threats to annex Canada. The big drop came after beverage exports to Canada averaged almost a third of the state’s yearly total from 2010 to 2024. Most recently, Trump threatened 100% tariffs on Canada for striking a trade deal with China.
Overall, the state saw a slight decline, 0.1%, to $459 billion, in the dollar value of imports and exports in the first 10 months of last year, the PPIC analysis found.
Two of the nation’s busiest ports, in Long Beach and Los Angeles, ended up handling their highest and third-highest volumes of cargo, respectively, last year despite the uncertainty around tariffs. But exports decreased as retaliatory tariffs hit American farmers, too.
Gene Seroka, executive director of the Port of Los Angeles, said in a media briefing this week that soybean exports to China from his port fell 80% last year.
“Virtually every agricultural commodity that we export was affected,” said Noel Hacegaba, chief executive of the Port of Long Beach, in an interview with CalMatters this week. Hacegaba said Friday that he hopes “the ruling brings greater certainty to the supply chain.”
But Peck, the USC law professor, said uncertainty remains, including around how aggressive the Trump administration will be in using the other statutes to continue tariffs. In addition, Peck said he was surprised the Supreme Court decision did not address how refunds for tariffs should be handled, though he said “I can understand why the court didn’t wanna get into that cesspool.”
The decision will spark what could be a chaotic process to return the tax revenue the government has collected, which totaled more than $264 billion in 2025. The plaintiffs in this case were small businesses, including Learning Resources, an educational toy business in Illinois. But U.S. corporations including Costco, Alcoa and Revlon have also sued the federal government over the tariffs, hoping to be first in line for refunds.
In his dissent, Kavanaugh wrote that the Supreme Court’s decision is likely to lead to “serious practical consequences in the near term,” and that “refunds of billions of dollars would have significant consequences for the U. S. Treasury.”
Trump has fretted on social media about possible refunds, saying that “it would be a complete mess, and almost impossible for our Country to pay. Anybody who says it can be quickly and easily done would be making a false, inaccurate, or totally misunderstood answer to this very large and complex question.”
But U.S. Treasury Secretary Scott Bessent has said that the federal government could issue refunds if needed, though he questioned how businesses would handle possibly getting their money back: “Costco, who’s suing the U.S. government, are they going to give the money back to their clients?”
Costco, which filed its lawsuit in November, did not respond to questions by CalMatters, including about how soon it would seek refunds from the federal government. The Treasury Department did not respond to an email about how refunds would work.