The Supreme Court on Friday struck down a huge chunk of President Donald Trump’s far-reaching tariff agenda, delivering a major rebuke of the president’s key economic policy.

The law that undergirds those import duties “does not authorize the President to impose tariffs,” the majority ruled 6-3 in the long-awaited decision.

The ruling is a massive loss for Trump, who has made tariffs — and his asserted power to impose them on any country at any time, without congressional input — a central feature of his second presidential term.

Trump’s legal stance “would represent a transformative expansion of the President’s authority over tariff policy,” the majority concluded. And they highlighted that Trump imposed the tariffs without Congress, which has the power to tax under the Constitution.

Chief Justice John Roberts delivered the opinion of the court. Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh dissented.

The decision noted that before Trump, no president had ever used the statute in question “to impose any tariffs, let alone tariffs of this magnitude and scope.”

To justify the “extraordinary” tariff powers, Trump must “point to clear congressional authorization,” the court wrote. “He cannot.”

The ruling was silent on whether tariffs that have been paid under the higher rates will need to be refunded. That sum could total $175 billion, according to a new estimate from the Penn Wharton Budget Model.

Kavanaugh wrote in his dissent that the refund process “is likely to be a ‘mess,'” after predicting that the short-term impact of the court’s tariff ruling “could be substantial.”

Since retaking the White House, Trump has rapidly reshaped America’s long-standing trade relationships by imposing a staggering array of import duties that have touched nearly every country on earth.

Reaction to the ruling quickly poured in, with the loudest voices cheering the demise of the chaotic policy that has been blamed for raising prices and straining long-standing global alliances.

That announcement stoked a sudden market panic, and the tariffs were quickly put on pause. They have since been repeatedly tweaked, delayed and reimposed, adding confusion and further complexity to the administration’s tangled web of trade policies.

Other IEEPA-based tariffs include a set aimed at Mexico, Canada and China related to allegations that those countries have allowed the deadly drug fentanyl to flow into the U.S.

Trump, a fierce critic of America’s recent history of making free trade deals, has repeatedly praised tariffs as both a bountiful source of federal revenue and a key tool in negotiations with foreign partners and adversaries alike.

He has claimed foreign countries bear the cost of his tariffs, and he has downplayed concerns that the taxes lead to higher prices for Americans. His administration, however, has admitted that the duties are paid by U.S. importers.

Trump has claimed the tariff revenue has been so large that the duties may be able to replace the income tax. He has also floated the idea of sending Americans $2,000 tariff dividend checks.

“We have taken in, and will soon be receiving, more than 600 Billion Dollars in Tariffs,” he wrote in a recent Truth Social post.

Other estimates are significantly lower: The Bipartisan Policy Center, for instance, tallied U.S. gross tariff revenue in 2025 at about $289 billion. U.S. Customs and Border Protection said it had collected roughly $200 billion between Jan. 20 and Dec. 15.

For the IEEPA-specific tariffs, the administration said it has collected about $129 billion in revenue as of Dec. 10.

Ahead of the ruling, Trump and his administration talked up the consequences of the high court striking down the tariffs.

“If the Supreme Court rules against the United States of America on this National Security bonanza, WE’RE SCREWED!” Trump wrote on Jan. 12.

U.S. officials, including Treasury Secretary Scott Bessent, have stated they believed the Supreme Court would not undo the president’s “signature” economic policy.

DETROIT — The strength of the U.S. automotive industry will face an early test this spring that has nothing to do with cars or trucks.

With tax season starting, industry experts are projecting that some Americans, many of whom have been priced out of the new-vehicle market, will use anticipated higher tax returns to purchase a new or used vehicle.

Extra cash on hand could lend a needed boost to an industry that’s suffering from slowing vehicle sales — or it could reveal continued problems for the automotive industry with inflated prices and consumers still reluctant to spend on big-ticket items.

“Their new tax bill is actually going to be less, and they’re going to be getting more in their tax return. It’s going to be a little bit of a surprise, we think, for a lot of potential buyers out there,” said Cox Automotive senior economist Charlie Chesbrough at a recent auto analyst conference.

The average IRS tax refund is up 10.9% so far this season, compared with the same point in 2025, according to early filing data. As of Feb. 6, the average refund amount was $2,290, compared with $2,065 reported about one year prior.

The increases were expected under tax changes by the Trump administration, including the One Big Beautiful Bill Act signed in July. That legislation removed taxes on overtime and tips and allowed eligible taxpayers to deduct up to $10,000 in annual interest paid on loans for new, U.S.-assembled vehicles purchased, among other adjustments.

Many of the tax changes were made retroactive to January 2025, which means taxpayers may have withheld more than they will ultimately owe.

“Although it’s a bit of an unknown, it feels like it could be really beneficial to vehicle sales, particularly in that sort of Q1-Q2 time frame,” said David Oakley, GlobalData manager of Americas vehicle sales forecasts.

March is historically one of the top months for U.S. vehicle sales, especially for used vehicles. The month has represented 9.1% of annual new vehicle sales on average over the past 12 years, according to Cox, trailing only the month of December at 9.3% of sales.

Many of the recent tax changes also assist middle- and higher-income consumers who may decide to pull ahead a vehicle purchase. The industry saw a similar dynamic during the Covid pandemic when the Trump administration issued many Americans $1,400 stimulus checks.

Back then, though, federal interest rates were near zero compared to the current Federal Reserve funds rate of 3.5% to 3.75%, and the inventory of new vehicles was low. Now, with higher borrowing costs, but improved inventory, the equation could be different.

More buyers are agreeing to longer-term loans amid higher financing costs and prices. Putting down extra cash can help lower monthly payments, which Carmax’s Edmunds reports reached a record of $772 per month for new vehicles during the fourth quarter.

The average transaction price for new vehicles in the U.S. was hovering around $50,000 toward the end of last year, up 30% from the start of 2020, according to Cox.

“What we don’t know is with consumer finance so stressed already, is that extra money already spent? Whether that’s going to be in the pockets. It’s a really mixed bag out there,” Chesbrough said.

Consumers could choose to use higher tax returns to pay off credit card debt — which nationally stands at a record level of $1.28 trillion, according to a report last week by the Federal Reserve Bank of New York — or replenish their savings after a period of persistent inflation.

U.S. consumer confidence fell to 84.5 in January, the lowest level since May 2014, driven by intense anxiety over high prices and a weakening labor market.

“It’s only confident people, people who feel comfortable about their economic fortunes of the economy of the United States, that are going to be interested in taking out a $40,000 or $50,000 auto loan,” Chesbrough said. “It’s a very difficult situation right now.”

— CNBC’s Kate Dore contributed to this report.