After Supreme Court Rejects IEEPA Tariffs, Effective Innovation Policy Must Replace Tariffs as the Trump Administration’s Tool to Revitalize American Manufacturing, Says ITIF

WASHINGTON—Following the Supreme Court ruling against the Trump Administration’s unilateral use of IEEPA tariffs, the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy, released the following statement from Stephen Ezell, vice president for global innovation policy:

The Supreme Court (SCOTUS) ruled that the Trump administration's tariffs imposed under the International Emergency Economic Powers Act (IEEPA) are unconstitutional. SCOTUS sided 6-3 with advocates who argued the President’s tariffs exceeded the scope of IEEPA’s powers, particularly noting that tariffs aren’t identified as a presidential authority allowed in IEEPA.

Despite the ruling, the White House may proceed to explore other avenues to expand tariffs, such as invoking authorities granted under Sections 301 and 122 of the Trade Act of 1974, or possibly Section 232 of the Trade Expansion Act of 1962.

ITIF contends that the application of tariffs on foreign nations should be narrow, tailored, and specifically targeted to counteract innovation mercantilist policies such as IP theft or industrial subsidization that harm U.S. enterprises. For example, the administration’s application of tariffs on Chinese EVs provide a good illustration of how U.S. tariff policy should be constructed, as opposed to imposing blanket tariffs on all nations. ITIF aligns with the administration’s priorities to boost the American manufacturing sector, but the United States needs a robust techno-economic policy agenda to promote American innovation rather than a single policy tool such as tariffs.

Regardless of the Supreme Court ruling, U.S. economic and trade relations won't be the same after this administration. ITIF hopes the future includes deeper partnerships with core allies to strengthen the U.S. position in the defining challenge of this century: the techno-economic competition with China.

Contact: Austin Slater, [email protected]