The Constitutional Price of Tariff Diplomacy

Learning Resources v. Trump and the question the Framers thought they’d settled in 1787

On February 20, 2026, the Supreme Court of the United States ruled—six to three (NPR, Reuters, NBC News, The Economist)—that the International Emergency Economic Powers Act of 1977 does not authorize the President to impose tariffs. The decision in Learning Resources, Inc. v. Trump (No. 24-1287) dismantles a tariff architecture that, in calendar year 2025, generated between two hundred and sixty-four and two hundred and eighty-seven billion dollars in customs revenue,¹ served the Administration as its principal instrument of foreign policy, and tested the outermost boundaries of executive power over taxation. It also resolves a question that the Founding Fathers considered settled as early as 1787: who holds the keys to the customhouse.

The ruling stripped the President of the instrument that, for the better part of a year, had functioned as the primary diplomatic, economic, and political weapon of the United States. What Donald Trump called “Liberation Day”, the Supreme Court called unauthorized.

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I. The Ruling

The central legal question appeared, on its face, deceptively simple. IEEPA authorizes the President to “regulate importation” in situations of foreign threat, following a declaration of national emergency. From those two words—regulate and importation, separated in the statutory text by sixteen others—the Trump Administration derived the power to impose tariffs of unlimited rate, duration, and scope, on any products from any countries.

Chief Justice John Roberts, writing for the majority, dispatched this claim with characteristic understated elegance: “Those words cannot bear such weight” (slip op. at 5). It is a sentence that will almost certainly find its way into constitutional-law textbooks.

The Court’s reasoning proceeded along two planes—a structure reflecting the internal tensions within the winning coalition of six Justices.

The first plane was textual, and it commanded the support of all six Justices in the majority (Parts I, II-A-1, and II-B of the opinion). Roberts observed that in IEEPA’s catalogue of presidential powers—nine verbs (investigate, block, regulate, direct, compel, nullify, void, prevent, prohibit) and eleven nouns describing categories of transactions (acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation, exportation, dealing in, exercising)—the word “tariff” does not appear once. Neither does “duty.” Whenever Congress has delegated tariff authority, it has done so explicitly, using specific terminology and imposing strict constraints: rate caps (fifteen per cent, say, or fifty), time limits, procedural prerequisites such as investigations, public hearings, and reports. IEEPA contains none of these (slip op. at 8-9).

The Government could not point to a single statute in the federal code in which the word “regulate” encompasses the power to tax. It conceded—using the Securities and Exchange Commission as an example—that an agency authorized to “regulate the trading of securities” cannot tax that trading (slip op. at 14-15). Why, then, should IEEPA—and IEEPA alone—be read to conceal a delegation of what Roberts called Congress’s “birth-right power to tax” inside the workaday authority to “regulate”?

There was, moreover, a feature of the argument that betrayed Roberts’s keen legal craftsmanship: IEEPA authorizes the President to “regulate importation or exportation.” If “regulate” encompassed taxation, the President could impose export duties. But the Constitution expressly forbids this (Art. I, §9, cl. 5). The Government’s reading would thus render IEEPA partially unconstitutional—an argument that, in common-law legal culture, functions as an alarm signal (slip op. at 15).

The second plane—the “major questions” doctrine—secured the support of only three Justices: Roberts, Gorsuch, and Barrett (Part II-A-2). Under this doctrine, when the executive branch claims that Congress has delegated an extraordinary power of vast economic and political significance, it must point to “clear congressional authorization.” The Court found that IEEPA tariffs—whose economic effects the Government itself estimated in the trillions (Brief for Federal Parties 3, 11: a four-trillion-dollar deficit reduction, trade agreements valued at fifteen trillion)—represented the quintessential “major question,” to which Congress had given no clear answer.

That three liberal Justices (Sotomayor, Kagan, and Jackson) reached the same result without invoking the major-questions doctrine—relying solely on “ordinary” textual interpretation—lends the ruling exceptional durability. However future Courts may assess the controversial doctrine, the interpretive outcome stands on two independent legs.

II. The Architecture of the Opinions: Seven Voices, Three Disputes

The decision produced seven separate opinions—a fact that reflects not only the complexity of the case but deep disagreements about legal method within both the majority and the dissent:

1. Roberts—principal opinion (Parts I, II-A-1, II-B = opinion of the Court, six Justices; Parts II-A-2, III = plurality, three Justices)
2. Gorsuch—concurrence (joined Roberts in full; wrote separately on the history of nondelegation)
3. Barrett—concurrence (joined Roberts in full; wrote separately on the nature of the major-questions doctrine)
4. Kagan—opinion concurring in part and concurring in the judgment (with Sotomayor and Jackson; rejected the major-questions doctrine)
5. Jackson—opinion concurring in part and concurring in the judgment (relied on legislative history)
6. Thomas—dissent (advanced his own nondelegation theory)
7. Kavanaugh—dissent (with Thomas and Alito)

This seven-part structure exposes three distinct disputes that will shape jurisprudence long after the last IEEPA tariff has expired.

The First Dispute: The Nature of the Major-Questions Doctrine (Barrett v. Gorsuch)

Justice Amy Coney Barrett—though formally in coalition with Roberts and Gorsuch—filed a separate concurrence distancing herself from Gorsuch on a fundamental point: the nature of the major-questions doctrine itself. For Barrett, the doctrine is not a “substantive canon” grounded in values external to the statute, but a principle of textual interpretation—”situating text in context” (Barrett concurrence at 1). A reasonable interpreter, aware of constitutional structure, would expect Congress itself to make “big-time policy calls”—but that expectation flows from the text and its context, not from a separate rule imposed by the judiciary.

Barrett directly criticized Gorsuch for attempting to formalize the doctrine as a “clarity tax” levied on Congress: “But if the Constitution permits Congress to give the Executive a particular power, who are we to get in the way?” (Barrett concurrence at 3). It is a line that reveals the tension between judicial activism and restraint—a tension that will resonate far beyond this case.

Gorsuch, for his part, filed the most expansive concurrence (forty-six pages), mounting an impressive historical reconstruction. His thesis: the major-questions doctrine is not an innovation but a return to a centuries-old common-law principle—that an agent may not exercise extraordinary powers without the principal’s express authorization.

Gorsuch led the reader from eighteenth-century English corporate law (Kirk v. Nowill, 1786—a cutlers’ company that could not seize goods without explicit parliamentary authorization), through agency law (Attwood v. Munnings, 1827—a general power of attorney does not encompass accepting debts), to American municipal law (Ex parte Burnett, 1857—the town of Cahaba, Alabama, could not effectively ban liquor sales through exorbitant licensing fees). In every case, the same principle held: extraordinary power requires express authorization (Gorsuch concurrence at 8-12).

He also tucked in a pointed riposte to the doctrine’s critics: “If my concurring colleagues all but endorse it today, maybe past skeptics owe the major questions doctrine a second look” (Gorsuch concurrence at 7, 17).

The Second Dispute: Ordinary Interpretation v. Extraordinary Canons (Kagan v. Roberts/Gorsuch)

Justice Elena Kagan, writing for herself, Sotomayor, and Jackson, drew a clear line against the major-questions doctrine—a doctrine she had attacked in earlier cases (West Virginia v. EPA, Biden v. Nebraska) as a “special canon” that “magically appeared.” This time, she did not repeat the critique, but neither did she lay down her arms. Her position: IEEPA does not authorize tariffs on the basis of “straight-up statutory construction” (Kagan concurrence at 7), without any need for extraordinary interpretive tools.

Kagan’s analysis turned on legislative context: ninety-nine possible combinations of verbs and objects in §1702(a)(1)(B), not one of which, apart from the contested pairing, concerns the generation of budgetary revenue. “Regulate importation,” in the company of ninety-eight other combinations, is a tool of control and restriction—not a fiscal instrument (Kagan concurrence at 4-5).

Justice Ketanji Brown Jackson contributed a separate concurrence grounded in legislative history—the committee reports of both the Senate and the House accompanying the 1941 amendment to the Trading with the Enemy Act and the enactment of IEEPA in 1977. These reports consistently described the delegated power as authority to “control or freeze property transactions where a foreign interest is involved” (S. Rep. No. 95-466, p. 5; Jackson concurrence at 3)—not as a fiscal power.

The Third Dispute: Royal Prerogative v. the Boston Tea Party (Thomas v. Gorsuch)

Justice Clarence Thomas’s dissent warrants separate treatment, for it stakes out the boldest—and most controversial—intellectual position in the entire ruling.

Thomas advanced a radical thesis: the nondelegation doctrine (the prohibition on delegating legislative power) applies only to “core legislative power,” which he defines as the power to make rules governing the deprivation of life, liberty, or property. Tariffs, in Thomas’s view, do not belong to this category. Importation is a “privilege,” not a “right,” and the power to charge fees for privileges is not subject to the constraints of the Due Process Clause (Thomas dissent at 10-12).

The historical foundation of this thesis is deliberately provocative: Thomas traces tariff authority to the royal prerogatives, citing a tradition stretching back to Edward I. In the English legal system, import duties were originally a “prerogative right” of the Crown (Thomas dissent at 11, citing N. Gras, Early English Customs System 21 (1918)). Parliament gradually assumed this power, but—Thomas contends—it never elevated it to the status of “core legislative power” in the Lockean sense.

The practical consequences of this position would be sweeping. If “core legislative power” were confined to the regulation of life, liberty, and property, Congress could freely delegate to the President the power to borrow, to spend, to regulate foreign commerce, and perhaps even to wage war. Most of the powers enumerated in Article I, §8, of the Constitution would become freely delegable, and reclaiming any power once surrendered would require overcoming a presidential veto—in practice, two-thirds of both chambers (Gorsuch concurrence at 41-42).

Gorsuch answered this head-on: “Are we really to believe that the patriots that night in Boston Harbor considered the whole of the tariff power some kingly prerogative?” (Gorsuch concurrence at 45). He reminded the reader that although the colonists initially distinguished between “internal taxes” and “trade duties,” they quickly abandoned the distinction. John Dickinson, in his Letters from a Farmer in Pennsylvania (1768), flatly rejected the division between internal and external taxation, and the Boston Tea Party—a revolt against duties on tea—definitively buried the notion of tariffs as prerogative rather than taxation (Gorsuch concurrence at 44-45).

For the European reader, Thomas’s position holds particular interest, because it touches on the boundary between prerogative powers and legislative powers—a division that, in the continental tradition, took a different form but addresses the same fundamental question about the limits of executive authority in a democratic state under the rule of law.

III. Kavanaugh’s Dissent: The Elephant in the Elephant Hole

Justice Brett Kavanaugh, in a dissent joined by Thomas and Alito, mounted an argument that merits serious engagement—if only because it exposes a fundamental disagreement about the limits of delegated power.

Kavanaugh built his position on four pillars. First, he pointed to the historical understanding of “regulate importation” as encompassing tariffs—invoking Marshall, Story, and Madison, for whom the power to regulate foreign commerce contained within itself the power to impose tariffs. Second, he recalled the Nixon tariffs of 1971 (a ten-per-cent levy on virtually all global imports), imposed under an identical linguistic formula in the Trading with the Enemy Act and upheld by an appellate court (Yoshida, 526 F.2d 560 (CCPA 1975)). Third, he cited the Supreme Court’s own 1976 decision in Algonquin, in which the Court unanimously held that the phrase “adjust the imports” (semantically close to “regulate importation”) authorized the imposition of monetary charges. Fourth—and perhaps most intriguing—he argued that the major-questions doctrine had never before been applied in the sphere of foreign relations, where Congress has traditionally afforded the President wide latitude.

Kavanaugh also sounded an institutional warning of potentially far-reaching consequence: extending the major-questions doctrine to foreign affairs could undermine not only tariffs but every broad delegation in the domains of national security and foreign policy. “Had the Court applied the major-questions doctrine in Hamdi [concerning the military detention of a U.S. citizen] and Dames & Moore [concerning the suspension of claims against Iran], those two landmark decisions would almost certainly have been decided differently” (dissent at 56).

Kavanaugh also included a line that may prove prophetic: “Although I firmly disagree with the Court’s holding today, the decision might not substantially constrain a President’s ability to order tariffs going forward”—noting that numerous other statutes (Sections 122, 201, 232, 301, and 338) continue to authorize presidential tariffs, albeit with greater procedural constraints (dissent at 5-6, 62-63).

IV. The Background: Tariffs as Weapons—from Philadelphia to “Liberation Day”

To grasp the full weight of the ruling, one must look back not one year but two and a half centuries.

A Revolution Born of Tariffs

The American Revolution was, in considerable measure, a tax revolt—and, specifically, a customs revolt. The Stamp Act (1765), the Sugar Act (1764), the Townshend Acts (1767), and, finally, the tea that landed in Boston Harbor in December of 1773—it was tariffs and import duties that created the political oxygen in which revolution ignited. This is why the Framers entrusted tariff authority to Congress with such painstaking care. As Madison wrote: Congress alone has “access to the pockets of the people” (The Federalist No. 48, at 310).

For much of the nineteenth century, Congress set every detail of the tariff schedules itself—from ten cents per bushel of malt to three cents per pound of refined sugar (E. Stanwood, American Tariff Controversies in the Nineteenth Century 39-76 (1903), cited in Gorsuch concurrence at 37-38). The first tariff act (1789) was the second piece of legislation in American history—right after the statute administering the oath of office. For more than a hundred years, tariffs accounted for fifty to ninety per cent of federal revenue; between 1789 and 1800, more than eighty-seven per cent of federal income came from import duties (J. Dobson, Two Centuries of Tariffs 1 (1976), cited in Gorsuch concurrence at 37).

One episode that Gorsuch recounts as an illustration of the era’s spirit is particularly telling: in December of 1791, when Washington asked Congress to expand the army following General St. Clair’s defeat, the House of Representatives debated the propriety of so much as asking Secretary of the Treasury Alexander Hamilton for advice on new tariffs. Congress did eventually solicit Hamilton’s counsel—but only after a debate over the constitutionality of the question itself (Gorsuch concurrence at 38; 3 Annals of Congress 437, 447 (1792)).

Gradual Delegation—with Guardrails

The twentieth century brought the incremental delegation of tariff powers to the President, but always with precise constraints. The Tariff Act of 1930 (Section 338) authorized the President to impose tariffs when he found that a foreign state was discriminating against American commerce—but with a fifty-per-cent ceiling. The Trade Expansion Act of 1962 (Section 232) allowed “adjustment of imports” to protect national security—but only after an investigation by the Secretary of Commerce. The Trade Act of 1974 introduced multiple mechanisms, each with procedural safeguards, time limits, and reporting requirements (slip op. at 8-9).

The pattern was consistent: whenever Congress delegated tariff authority, it did so explicitly, using the words “tariff” or “duty,” and imposed precise constraints. IEEPA did neither.

Nixon, Ford, and the Prehistory of the Dispute

The Nixon tariffs of August 1971—a ten-per-cent surcharge on nearly all global imports, announced in a prime-time television address—represent the closest historical precedent. Nixon invoked the Trading with the Enemy Act (IEEPA’s predecessor), an appellate court (United States v. Yoshida Int’l, Inc., 526 F.2d 560 (CCPA 1975)) upheld the tariffs, and Congress did not protest. A year later, the Supreme Court in Algonquin (1976) unanimously held that a similar linguistic formula in Section 232 encompassed monetary charges.

It was precisely this context—Nixon, Algonquin, the Trading with the Enemy Act—that formed the foundation of the Government’s case. And it was precisely this context that the majority found insufficient. A single ruling from a specialized lower court, concerning tariffs “limited in amount, duration, and scope” (as Roberts emphasized, slip op. at 10 n.3 and 17-18), does not establish a “well-settled meaning” that Congress could be presumed to have incorporated into a new statute. Notably, Roberts also observed that Nixon did not initially invoke the Trading with the Enemy Act—he did so only during litigation, as a post hoc defense (slip op. at 10 n.3).

V. “Liberation Day”—and What Came of It

On April 2, 2025, Trump proclaimed “Liberation Day”—imposing, under IEEPA, a baseline ten-per-cent tariff on virtually all countries, with elevated rates reaching forty-nine per cent (Cambodia), forty-six per cent (Vietnam), and fifty per cent (Lesotho—a country about which Trump himself remarked that “nobody ever heard of it”). Then came a cascading sequence of modifications: rates on China climbed from thirty-four per cent to eighty-four per cent, then to a hundred and twenty-five per cent, reaching a cumulative effective rate of a hundred and forty-five per cent (slip op. at 3). Products entered and exited the tariff framework with a frequency more evocative of cryptocurrency trading than trade policy.

The opinion documents this chaos with judicial meticulousness. One month after imposing ten-per-cent “fentanyl” tariffs on China—an increase to twenty per cent. Another month—elimination of the statutory exemption for shipments under eight hundred dollars. Less than a week after the “reciprocal” tariffs—the China rate jumps from thirty-four per cent to eighty-four per cent. The next day—up to a hundred and twenty-five per cent. Meanwhile—exemptions for beef, fruits, coffee, tea, and certain fertilizers. Then—”the suspension of heightened reciprocal tariffs” on Chinese imports (slip op. at 3; Exec. Orders No. 14228, 14256, 14259, 14266, 14346, 14358, 14360).

The tariffs served ends that extended far beyond trade. They became an instrument for extracting investment commitments—Japan pledged five hundred and fifty billion dollars, South Korea three hundred and fifty billion, and European firms announced investments on the order of six hundred billion dollars as part of a U.S.-E.U. agreement.⁴ Tariffs also became a tool for pressuring border control (“fentanyl” tariffs of twenty-five per cent on Canada, twenty-five per cent on Mexico, and ten per cent on China—slip op. at 2-3), and even—according to Kavanaugh, citing a declaration by Secretary of State Rubio—leverage in peace negotiations between Russia and Ukraine (dissent at 51; Decl. of M. Rubio in No. 25-1812 (CA Fed., Aug. 29, 2025), p. 3). Kavanaugh pointed to a specific example: on August 6, 2025, tariffs were imposed on India for indirectly importing Russian oil, and on February 6, 2026, they were reduced after India committed to ending such imports (dissent at 51; Exec. Orders No. 14329, 14384).

VI. The European—and Specifically Polish—Perspective

For the European observer, the ruling matters on several levels.

First, it immediately eliminates the baseline ten-per-cent tariff and the elevated “reciprocal” rates on the European Union imposed under IEEPA, providing direct relief for European exports. Tariffs imposed under Section 232 (steel, aluminum, automotive products) and sector-specific measures meeting the requirements of other statutes remain in force. Even after the ruling, the average effective U.S. tariff rate stands at approximately 9.1 per cent—the highest since 1943 (Yale Budget Lab).

Second, the ruling raises questions about the durability of trade agreements negotiated under the pressure of IEEPA tariffs. Since the legal foundation (IEEPA tariffs) has collapsed not through negotiation but through judicial ruling, the European side may argue that commitments have lost their quid pro quo.

Third—and this is the most universal dimension—the ruling stands as a powerful reminder that, in a common-law system, even the most expansive assertion of executive power is subject to judicial review. In a legal culture where the principle of nemo iudex in causa sua does not operate with automaticity, independent courts can—and do—tell the President “no.” It is a lesson that resonates far beyond Washington.

Fourth, the Thomas-Gorsuch dispute over royal prerogatives touches on a division that has its European parallels. In the continental tradition, tariff authority has long been classified as a legislative competence—yet the boundary between regulation and taxation, between prerogative and legislation, remains a subject of debate in the jurisprudence of the Court of Justice of the European Union (consider the discussion on the scope of Article 207 TFEU and the European Commission’s competences in trade negotiations). Learning Resources provides rich material for comparative analysis.

VII. What Comes Next?

The ruling closes one chapter and opens several more.

The question of refunds for IEEPA tariffs already collected (estimated at approximately a hundred and thirty-three to a hundred and forty-two billion dollars according to the Yale Budget Lab and TD Economics; up to approximately a hundred and seventy-five billion dollars according to the Wharton Budget Model) remains unresolved. The Supreme Court did not address the matter, leaving it to further proceedings. Justice Kavanaugh aptly predicted that the process would be a “mess” (Tr. of Oral Arg. 153-155, cited in dissent at 63)—importers may have already passed costs on to consumers, and refunding tariffs to importers does not necessarily mean refunding prices to consumers.

Alternative legal bases for tariffs (Sections 122, 201, 232, 301, and 338) remain available, but each requires procedural prerequisites that IEEPA did not demand. None permits the simultaneous imposition of tariffs on virtually all countries and products. The Administration will almost certainly attempt to reimpose selected tariffs on these alternative foundations—but the end result will inevitably be narrower, slower, and more susceptible to oversight. Roberts expressly declined to speculate on hypothetical legal bases (slip op. at 16 n.4).

The durability of trade agreements negotiated under the pressure of IEEPA tariffs becomes an open question. Countries that made investment commitments in exchange for tariff relief may now argue that the American side cannot deliver on its part of the bargain—not because it is unwilling, but because a court has taken away its tools.

Congressional response remains an unknown. The ruling has relieved the legislature of immediate pressure—the problem was resolved judicially, not politically. But it also opens a window for legislation that could either explicitly grant the President broad tariff authority under IEEPA (codifying what the Court refused to read into the statute) or, conversely, tighten the constraints on delegated tariff power.

The status of the major-questions doctrine in foreign-affairs cases remains open. Kavanaugh accurately noted that only three Justices applied the doctrine, three rejected it outright, and three (the dissent) would not apply it in the foreign-affairs context—”six Justices would not apply it in the foreign affairs context” (dissent at 57 n.24). Whether the precedent of Learning Resources extends to future disputes over sanctions, embargoes, or other foreign-policy instruments is a question that only future case law will answer.

VIII. A Final Lesson

Justice Gorsuch closed his concurrence with words that deserve quotation at length:

For those who think it important for the Nation to impose more tariffs, I understand that today’s decision will be disappointing. All I can offer them is that most major decisions affecting the rights and responsibilities of the American people 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. 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. There, deliberation tempers impulse, and compromise hammers disagreements into workable solutions. . . . 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.

(Gorsuch concurrence at 46)

That passage—written by a conservative Justice, in a case concerning a conservative President—says more about the state of American constitutional democracy than many an academic treatise. The tariff power, that “most important of the authorities proposed to be conferred upon the Union” (Hamilton, The Federalist No. 33, at 202-203), has returned to where the Framers placed it: in the hands of Congress. Whether Congress will know what to do with it is another matter entirely.

Source note: All references to the opinion (slip op., concurrence, dissent) refer to Learning Resources, Inc. v. Trump, 607 U.S. ___ (2026), Nos. 24-1287 & 25-250. Figures not drawn from the opinion are footnoted with source attribution.

Robert Nogacki

Founder and Managing Partner of Skarbiec Law Firm, recognized by Dziennik Gazeta Prawna as one of the best tax advisory firms in Poland (2023, 2024). Legal advisor with 19 years of experience, serving Forbes-listed entrepreneurs and innovative start-ups. One of the most frequently quoted experts on commercial and tax law in the Polish media, regularly publishing in Rzeczpospolita, Gazeta Wyborcza, and Dziennik Gazeta Prawna. Author of the publication “AI Decoding Satoshi Nakamoto. Artificial Intelligence on the Trail of Bitcoin’s Creator” and co-author of the award-winning book “Bezpieczeństwo współczesnej firmy” (Security of a Modern Company). LinkedIn profile: 18 500 followers, 4 million views per year. Awards: 4-time winner of the European Medal, Golden Statuette of the Polish Business Leader, title of “International Tax Planning Law Firm of the Year in Poland.” He specializes in strategic legal consulting, tax planning, and crisis management for business.