In a landmark ruling, the Supreme Court struck down the Trump Administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs — a decision with sweeping implications for trade policy, consumer costs, and the balance of power between the executive and legislative branches. In this episode of The Rebuild Conversations, Tahra Hoops is joined by co-host Gary Winslett and special guest Ed Gresser, Vice President and Director for Trade and Global Markets at the Progressive Policy Institute, to break down what the Court decided, why it matters, and what comes next as the Administration scrambles to find new legal footing for its tariff agenda.
SCOTUS Breaking News: Trump’s IEEPA Tariffs Struck Down
Tahra Hoops: Given the breaking news that came out today. SCOTUS ruled against Trump’s IEEPA tariffs. This is something that many of us were hopeful was going to happen even though it took many months, many weeks to get this opinion to come out, which was worrying many people. But as you look into the document and see that it is over a hundred, just about 170 pages, you see that the opinions were quite long. And Supreme Court justices such as Gorsuch really wanted to take his time understanding why he was filing his concurrences and why he was striking this down.
So you were able to gain a further understanding of. How it took this amount of time.
Ed Gresser Joins to Explain the Ruling
Tahra Hoops: I’m joined today by my co-host Gary Winslett and special guest Ed Gresser. He is the Vice President and director for Trade in Global Markets at the Progressive Policy Institute. Ed is a leading expert on US trade policy.
He’s worked at US Trade Representatives offices, and he has been following this case quite closely. We’re thrilled to have him here to explain the court’s decision. It means what might happen next and Trump’s recent press conference. So Ed, thank you for being here
Ed Gresser: Thanks so much for inviting me. I’m thrilled to be here.
Tahra Hoops: So I’m gonna kick it off with you.
Top-Line Takeaways: Why IEEPA Can’t Be Used for Tariffs
Tahra Hoops: If you could just go through like headlines, like what exactly just happened, what are the top lines that we should be pulling from this 170 page opinion and what is going to happen next?
Ed Gresser: Okay, well the headlines are: Over the last year, the Trump Administration has put in about 15 decrees of various sorts, tariffs on all kinds of things, from lots of things from Brazil to, you know, cars and parts to whipped cream, claiming it’s made out of steel to… most things in the world. About two thirds of the tariff money has come from decrees on using the International Emergency Economic Powers Act, IEEPA. The dates to the 1970s meant basically to allow presidents to act quickly in, in the event there’s an outbreak of a war or a pandemic where you really don’t have time for Congress to legislate. The President can act fast and Congress can fill in and legalize things. In the succeeding weeks, which is actually how the Biden Administration used it at the outbreak of the Russian invasion of Ukraine.
First to ban some imports, and then to have Congress put things in law, nobody’s ever used to be behind this, and it has proven to be an unconstitutional use. You’re not allowed to take the IEEPA law, which is pretty expansive, and override the actual congressionally authorized tariff system. Over the past year, IEEPA has brought in about $175 billion worth of tariff money. $5 billion from telephones, a billion dollars from makeup, $3 billion from clothes, $3 billion from toys, a billion dollars from fresh fruits and vegetables. So I think it’s kind of come home for a lot of Americans and where they live and where they eat and all that sort of stuff. The Supreme Court has now said, you can’t do this. So all of those decrees are now struck down.
What Gets Reversed: De Minimis Rule, Consumer Fees & $175B at Stake
Ed Gresser: One final example, he used it to cancel the de minimis tariff waiver. So that led to many, many...
Tahra Hoops: just to stop you there, in case people might not be familiar, would you be able to walk us through what that rule is?
Ed Gresser: Yeah, the de minimis tariff wave, de minimis meaning very little tariffs on purchases of $800 or less, So lots of people used it to shop online.
In July they declared an urgency to cancel that privilege. So people are getting fees of $50 and $200 when they buy something from overseas and have it delivered to their home. All those are not canceled. The government will be responsible to pay back the money that it wrongfully collected— all this $175 billion. The Trump Administration obviously is very, very dedicated to tariffs, believes in them, wants to keep them.
Trump’s Response & Next Moves: Section 122 Stopgap, Section 301 Plans
Ed Gresser: Mr. Trump this afternoon responding to this said he thought the Supreme Court justices were bribed or someone influenced governments to do this.
Tahra Hoops: Oh, he stated they should be ashamed.
Ed Gresser: Yeah I doubt they’re ashamed. He said that he’s now gonna try to replace this set of arrangements, both the 10% worldwide tariff, the 15% tariff, and anything from the European Union or Japan. The 50% tariff on lots of things from Brazil and India. First with a kind of stopgap measure using an old law called Section 122 that allows you to impose emergency tariffs for five months which I think will be 10% or that’s what he said, and then try to replace it with country by tariffs using yet another law called Section 301.
So I think basically you can expect one: a lot of turmoil over repayment of this money that the government wrongfully is holding.
And two: much more sort of chaos and upheavals in US trading tariff policy and relationships with our neighbors and our allies and other countries as we get up toward the midterm election.
Tahra Hoops: Okay. So just to summarize what this opinion details and what it is exactly targeting, as you mentioned it is the IEEPA tariffs and those are going to cover the 10% baseline on all liberation day partners. That’s kind of the liberation day tariffs, the higher reciprocal tariffs on dozens of countries, the drug trafficking tariffs on Canada, Mexico, and China.
And the about 145% effective rate on most Chinese goods. Gary, did you wanna dive into what tariffs remain right now?
Separation of Powers: ‘Regulate’ Isn’t ‘Tax’
Gary Winslett: So one thing I wanted to add on some of Ed’s points is that the court went out of its way to make sure that this was understood as the decision that was also about separation of powers. So if you go into the decision, they make very clear that IEEPA gives the President power to regulate in emergency ways, but that does not include the power to tax.
That is an unlawful usurpation of Congressional authority. And it doesn’t make sense in the statute anyway because if you had some sort of true economic emergency, you know right after Japan bombs, Pearl Harbor or a pandemic or something like that, you’re not just gonna add a little tax to the issue that doesn’t do what you need to do.
And nowhere in IEEPA, as it was written, do they discuss taxation at all. So you would have to imagine somehow that Congress had included it. This unwritten down power of taxation that they had secretly handed to the President in order to follow the Administration’s line of logic. And so for the court, this isn’t just about the economics of tariffs, as dumb as they are, and as much as you and I would point out they are unhelpful for the courts, this is also about pushing back against an imperial presidency. So it is not just that these tariffs do not make sense, they exceed presidential authority and that is why they were unlawful. So it’s not just that Trump has been taxing your groceries idiotically, he has been taxing your groceries idiotically and unlawfully. It’s this separation of powers thing that’s really important.
Tahra Hoops: A key quote from the opinion is that there are nine things that the President can do under IEEPA is investigate, block, regulate, direct and comply, nullify, void, prevent, or prohibit. As you mentioned not a single one of those words is tax. None of them say tariffs. None of them say duties and they really try to pull apart the word regulate and its definitions, and clearly it felt irresponsible and was not able to convince the majority of the court because as you’ve mentioned, it is just unlawful to accept that definition, that interpretation that the Trump Administration was looking to do.
Ed Gresser: That’s an important point, that constitutionally tariffs are congressional power and they are not the same as regulating commerce with foreign nations. The first enumerated power, number one: Congress shall have power to lay, collect taxes, duties, imposts and excises. And then five lines further down, Congress also has the power to regulate commerce with foreign nations.
So the people, the Constitution, definitely felt regulation and tax were two different things. And the Administration’s argument in the case was taxation is a form of regulation, and the court didn’t buy into that.
Tahra Hoops: I had a chuckle myself this morning seeing that the Court went straight to the founding: there is no taxation without representation. I’m like, wow. They are really giving you the basics here, and you guys are completely failing. As horrible as it is to read some of this, seeing that just gave me a little dark chuckle.
How Far Trump Claimed the Power Went: Gorsuch’s Warning Examples
Tahra Hoops: One of the quotes that I found from one of the concurrences through Gorsuch was just eye-opening because this is something that I have seen and called out for many times as both of you I’m sure have as well, is a quote that Gorsuch said that before us, the President says he may use IEEPA to equalize foreign domestic duties, or not. He may use it to negotiate with foreign countries, or not. He may set tariffs at 1% or a million percent. He may target one nation, one product, or every and nearly every product. It is the idea that he could do whatever he wanted and believes that that was the right of law. And obviously there are several examples that we’ve seen in recent times.
The one that comes to mind is his recent call with the Prime Minister of Switzerland, where they had a conversation. He was not fond of the quote-unquote attitude that she gave, and he maybe thought about lowering the tariff rate, but because he did not like her attitude, he instead upped it.
So I’ll open it up to both of you, your thoughts and findings on that.
Congress on the Hook: Limits of 122/232/301 and GOP/Dem Silence
Gary Winslett: I mean, he’s still gonna reach for whatever tariff authority he thinks he can get. They already went with 122 today. The thing about it is though, 122 is supposed to be about balance of payments and the trade deficit. 232 is about the national security implications in particular. 301 is about unfair trade practices.
All of the other authorities he would use are at least circumscribed in certain ways. That is at least as long as Congress will step up and actually care about its own prerogatives. So with the 122 tariffs that he just promised, not an hour ago, those have a 150 day window and then they lapse unless Congress extends it.
Well, now the ball is even more in Congressional Republicans’ court on this, and all along they’ve had the ability to fight back against this and haven’t. And so it’s just likely gonna be yet another iteration of Republicans pretending not to read the news that day, you can’t find them right now on this tariff matter.
And it’s just really frustrating to see the Supreme Court take separation of power seriously, and Congressional Republicans doing everything they can to give a president more taxation authority, which is sort of one of the interesting things today. You would think normally Republicans would love seeing the Supreme Court say that the President actually has more constrained taxation powers than he thinks, and politics are just running in the total opposite direction of that.
Tahra Hoops: I mean, I’m sure there have been few, very very few members of the GOP who came out such as Massie and Rand Paul, who understood that this is not a power that the President should be overextending. But you’re right, I have been asking myself: where is Congress? And the fact that he noted the use of 122 to be the one lever that he is going to fall on for, as he mentioned, is going to be much higher than what we have had in recent times.
He is putting the blame on you guys. He understands that we are in a midterm election year and the very Congress that has been silent on the sidelines, even on the Democratic side, you now have a lot of eyes on you. Ed, I would love to get your thoughts on this. I know that you’re at PPI, but CNL has also put out a really great tariff tracker.
Seeing the messaging, the policies, and the framework of the Senate and the House side for Democrats and how they have been responding to this and how you think they’re going to respond to this newfound light on the next steps of the tariff war.
Public Opinion & Midterm Politics: Why Tariffs Are Becoming a Liability
Ed Gresser: Thanks for mentioning CNL, They’re great.
There’s probably been more polling on trade and tariffs in the last year than probably in the last 50 years put together. So we know a lot about what the public thinks, and you can sort of see why Republicans are so anxious and so unwilling to say anything. The public in general really doesn’t like this. They’ve thought about it for a year. It’s about 62% to 38% negative. That was the initial reaction in March and April of 2025. And that is exactly what people think about it today. Democrats almost universally oppose 90% to 5% typically. Independents about 75, 25% negative.
Republicans mostly hung in there with Trump. So Congressional Republicans are under pressure from the public in general to break with Trump and from their core voters to stay with him. And so what they’ve tried to do is shrink into the background and say nothing and stay away from the issue. And up till a week and a half ago, House Republicans had in fact passed a kind of resolutionary house rule to declare all of 2025 is a single day. The reason for that is that you have a special right to challenge IEEPA measures through privileged resolutions that you can only offer once in a legislated day. So they declared the whole year a single day.
That year, or that day, came to an end at the beginning of February, and you then did see people start to peel off. The House last week voted to terminate the tariff on Canada. They’re going to be voting for more of these things. So Republicans are kind of in a bind. They don’t wanna talk about this, they’re gonna have to talk about it. If Trump comes up to the midterm elections and says: we want you to be authorizing war tariffs, that’s a bad place for them to be. That’s not what they wanna be talking about right now.
Tahra Hoops: So I, you, we all notice that a lot of the drop is happening because of the economic impacts that consumers are facing. Again, as we enter into a midterm year the economy is going to yet again be a number one priority with how people are voting. They’re voting with their wallet yet again. The tax foundation has noted that over the past year it’s been an added annual $1,300 extra expense on households. With IEEPA tariffs removed that is probably going to drop to around $400 per family, which is still a lot of money that people would like to keep to themselves because they don’t believe that their wages are being stretched as much.
Real-World Impacts: Small Businesses, Uncertainty, and Farmers Hit Hard
Tahra Hoops: So I would love to hear about, perhaps Gary, you’d be a great person to answer this, on how small businesses are going to be dealing with this now that one, they’ve gotten a little bit of relief for I guess the hour in between the announcement and the presser, and then also how they’re going to be prepping and planning for these upcoming tariffs that are going to be added on yet again from the consumer side, the company side, and the worker side.
Gary Winslett: Well, so they’re getting hit in a couple of different directions. One is that the Supreme Court didn’t really land any sort of mechanism for businesses to get the money back, that they were illegally taxed this whole time. So there’s just no mechanism for them to do that. And the Trump Administration is gonna drag that out as much as it can. They’re not gonna get the money back that they were illegally taxed. But then also, you don’t quite know exactly what shape these new tariffs are gonna take. And it’s very clear that the Trump Administration so believes in these things that they’re going to do everything they can to impose new tariffs.
I mean, it’s very predictable that they are doing this, but it’s not their only option. Like what Donald Trump could have done is say, well, I was gonna revive American Manufacturing, but the Supreme Court stopped me. And they would just end there and he could take credit for any good thing that happened, any bad thing is on the Supreme Court. But they’re just so dug in, Donald Trump loves these things and the coalition around him doesn’t know how to tell him no. And so they’re not just gonna pocket the gift that SCOTUS gave them. They’re gonna be trying these other tariffs, section 122, section 232, 301, all these different legal routes to more tariffs, but that means you don’t actually know exactly what is being tariffed and how much, which introduces yet more business uncertainty.
And that’s extra problematic if you’re a small business. ‘cause you don’t have the inventory, you don’t have the ability to lobby for exemptions. You don’t have the kind of access to finance that a bigger business has. So all of the problems that this generates. For larger businesses is not great, but it’s extra harmful for smaller businesses, and so that’s just a couple of different ways they’re getting hit all at once in various ways for no reason.
Ed Gresser: The farmers are really among the hardest hit groups in the United States. They are both paying more money for fertilizers and for implements, and for fences, for all sorts of tariff impacts. They’re losing their export markets to Canada, to China, to you, and the government or Administration is trying to compensate for that.
We’ve reopened soybean sales to Bangladesh and we’ve done X with Guatemala, and it’s just not landing. Those aren’t substitutes. The other thing I would say is that as compared to a year ago… if they’re starting fresh. A year ago, this was all hypothetical and abstract. We had not had a big increase in 96 years.
No one in living memory knew what it was like, and they were kind of skeptical about what Trump said. Now they have a year of experience and what has happened is trade balance said it was an emergency. It’s exactly the same as it was a year ago. Manufacturing, large slowdown in manufacturing hires and contraction as share of GDP growth.
Now 2.2% last year, not terrible, but lower than every year during the Biden Administration. This has just not been a productive experiment, and I think the public has kind of internalized that. So, the challenge of persuading them to go through another year of this is much bigger than it was in April and February of 2025.
Tahra Hoops: I mean, I just think back to after Trump was first elected and then you just saw Google search trends immediately skyrocketed to people like searching what is a tariff? So, you’re right, it has been so long for the nation to even understand what a tariff is, let alone to even conceptualize what the impacts would be as even though he was constantly saying during his campaign: “I am going to tariff this going to save the nation,” and just repeated it every single time he could.
It was his number one economic tool. He says the only reason why he did not do so in Trump one was because COVID came around and he thought he was being too nice about it. If anything, he started off his presser today by saying he’s been pretty mild with how he’s been using tariffs, and now he’s just going to kick things into gear and just up what he has been doing before.
Refunds Fight: Can Importers Get Their Money Back?
Tahra Hoops: But I did wanna touch on one thing that was talked about a bit during the press conference. Is the whole idea of refunds when people had the idealized thought that this would come out and then we would start getting refunds from the tariffs that were illegally put onto US consumers and companies.
Kind of like their own version of tariff rebate checks that they have been floating around that were never going to happen. Kavanaugh noted in his dissent. That the United States may be required to refund billions of dollars to importers who already paid the IEEPA tariffs, even though some of the importers may have already passed it on to consumers.
He called the refund process a mess, and notes that, as he says, consumers were paying some of that. When that was brought up to Trump during the press about Peter Ducey. He goes, yeah, you think the opinion would’ve included something on how we could do so? Looks like it’s going to have to be litigated from anywhere to two to five years, meaning that the Administration has no intent to refund the people back.
So I would love to hear both of your takes on that.
Gary Winslett: I mean, just as a factual matter, it’s not true that there’s no technical mechanism to pay people back. Virtually all the payments get done electronically. You could pay them back very quickly. It is a choice not to pay them back, not just some law of nature, like the money disappeared or something.
Ed Gresser: Yeah, that’s absolutely true. And it is not unusual for the US government to do this. Last year the Internal Revenue Service paid back over $100 million in extra withholding penalty to a number of $328 billion. They do this routinely every year. The CBP knows exactly how much money it’s collected in tariffs and who paid and when and what law they came under.
So it’s not difficult to do there’s no mess involved.
Tahra Hoops: I just found that to be funny, the language that they were quickly going to use and something they might continue to fall back on. They would love to litigate their way out of this mess. They have been taking in so much tariff revenue, the idea to give it back somehow, as Trump has been saying, would be an economic disaster.
That is why he has to rely on other avenues, such as section 122.
Wrap-Up: Trade ‘Deals,’ Ongoing Uncertainty, and the Midterm Message
Tahra Hoops: We’re coming close to time and I wanted to end with one quote again from the dissent that I, again, found laughable as I was reading it. From Kavanaugh, as he stated that the court’s decision could generate uncertainty regarding those trade agreements.
This is referring to the ongoing trade agreements that Trump has made with other countries regarding IEEPA. Now that they’re reversed, we are now stuck in an environment of uncertainty, something we have clearly not been through before in the world of tariffs.
Ed Gresser: I’ll only say that, just to use one example last year, the Administration put America’s European allies through miserable negotiation rounds and wound up with a so-called deal, but legally, flimsy, they’re not very stable. But then within weeks, Trump was threatening to put tariffs of 25% on Denmark and Finland and UK and many other European countries because he got upset over Greenland. So the idea that there’s some stability or seriousness to these agreements is not realistic.
Tahra Hoops: Are there any last things to add on there?
Gary Winslett: I think one thing that this does at least domestically is it does make it even easier for Democrats to rally around being opposed to these because you have this wing in the Democratic party that’s always kind of liked tariffs, but Trump’s tariffs put them in an awkward spot. They still tried to kind of fudge their way through it.
But now that the tariffs are obviously illegal and an illegal usurpation of Congressional authority, then I think that really should be the last thing to bring on all of the Democratic party into these are bad and we need to oppose them and that Trump has been illegally tariffing your groceries a key message line from now through to midterms.
Ed Gresser: There is a lot of, at least among Congressional Democrats, there’s a lot of unity among on the idea that you can’t have a situation where a single person is able to create whatever taxes he wants on whatever given day, and that they will hold together on that, the tariff issue until Trump is gone at least.
Gary Winslett: Yeah.
Tahra Hoops: Well, Ed and Gary, thank you so much for joining me on a Friday afternoon. I think we can all agree that in the midterm election is going to be focused on affordability. Trump has given them a really good message line. He has been illegally taxing your groceries, your goods for quite some time, and we should fight back by voting for Democrats this year. Thank you guys. Have a good one.
Ed Gresser: Thank you.
Gary Winslett: Bye.
