In a major separation-of-powers decision, the U.S. Supreme Court, in a 6–3 ruling, held that President Donald Trump did not have legal authority to impose sweeping tariffs under the International Emergency Economic Powers Act.

The Basic Issue
The president argued that IEEPA—a law meant to let presidents respond to national emergencies—allowed him to impose large, open-ended tariffs on imports from Canada, Mexico, China, and essentially the rest of the world. He justified the tariffs as responses to drug trafficking and trade deficits. Small businesses and several states sued, saying the U.S. Congress never gave the president that power. The court agreed.

The court made three core points:

Only Congress can impose taxes and tariffs. The U.S. Constitution explicitly gives Congress—not the president—the power to levy duties and tariffs. The government conceded that the president has no inherent peacetime authority to impose tariffs. So everything depended on whether Congress clearly delegated that power in IEEPA. The court said it did not.

“Regulating imports” is not the same as taxing them. The court held that although IEEPA allows the president to “regulate” imports and exports during emergencies, it does not mention tariffs. Those are the purview of Congress, which normally spells out tariff authority explicitly, and always with limits.

This was a “major questions” case. Under the court’s so-called “major questions doctrine,” agencies (or presidents) cannot claim enormous economic powers unless Congress clearly says so. Here, the claimed authority was sweeping: the ability to impose unlimited tariffs on any country, for any length of time, entirely at presidential discretion.

What the Ruling Means for the Staffing Industry
For staffing firms, the decision has several practical implications: because tariffs can ripple through vendor pricing, the ruling means more predictability in costs for products such as information technology hardware and office technology, reducing the risk of abrupt, unpredictable cost increases that can’t easily be passed on to clients.

Less cost pressure on clients: many staffing clients were absorbing higher import costs, which was squeezing operating margins—causing hiring freezes, reduced use of staffing agency labor, and pressure to lower bill rates. Stabilizing trade policy could help increase client demand for staffing.

The court’s ruling means that any future tariffs will likely be narrower in scope and come with clearer rules and timelines, making workforce planning easier for staffing agencies that operate across multiple states and industries.

Other trade statutes the president can use remain on the books. But this ruling prevents him from using emergency powers as a shortcut around Congress to impose massive, economy-wide duties. For the staffing industry, that translates into greater stability, fewer surprise cost spikes, and a more predictable business environment—all critical in an already tight labor market.

What the Ruling Means for the Economy
The implications of tariffs have been pretty straightforward. The institution of tariffs raises operating costs and uncertainty for clients, which hampers labor demand. These direct effects will be more pronounced in the industrial and goods-producing sectors. In the long term, they also make inflation more stubborn, which accelerates labor costs. These indirect effects are likely to be economy-wide.

The effects of the court’s decision to strike down tariffs today will take time to be felt by staffing clients. In fact, this decision may produce more uncertainty for clients because the administration will, very likely, seek to reinstitute tariffs under different authorities. Without clear communication of a long-term trade policy, tariffs will be a continued headwind for the labor market and, in turn, the staffing industry.