The U.S. Supreme Court delivered a landmark ruling Friday that struck down a set of tariffs imposed by President Donald Trump under emergency powers, reshaping part of the trade landscape between Canada and the United States. However, while the decision marks a significant legal development in Washington, its immediate impact on most Canadian exporters may be limited.
In a 6-3 decision, the Court ruled that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful. Trump had relied on that authority to implement what he described as “reciprocal tariffs” against several countries in April, as well as earlier fentanyl-related tariffs targeting Canada, Mexico and China. Those duties on Canadian goods had previously been set at 35 per cent.
Despite the headline figure, many U.S. businesses were not actually paying those elevated rates on Canadian imports. Goods that complied with the Canada-United States-Mexico Agreement (CUSMA) were exempt from the IEEPA tariffs and continued crossing the border duty-free. As a result, many Canadian exporters are unlikely to notice any immediate difference following the Court’s decision.
Shortly after the ruling, President Trump announced during a press conference that he would impose new global tariffs of 10 per cent under Section 122 of the 1974 Trade Act. Tariffs introduced under this authority can remain in place for up to 150 days unless Congress approves an extension. It remains unclear whether these new tariffs would apply in addition to existing sectoral tariffs or whether they would override CUSMA exemptions. Economists say the lack of clarity leaves Canadian businesses in a temporary state of uncertainty, particularly if the new duties stack on top of current measures.
Importantly, the Supreme Court ruling does not affect tariffs imposed under Section 232 of the Trade Expansion Act. These tariffs — targeting Canadian steel, aluminum, copper, automobiles and lumber — remain in force. In some cases, duties on key industries such as steel and aluminum have reached as high as 50 per cent. Industries that depend heavily on integrated cross-border supply chains have felt the brunt of these measures over the past year, and eliminating or reducing Section 232 tariffs remains a central objective in Canada-U.S. trade negotiations.
The Court’s decision could also open the door for some businesses to seek refunds for tariffs paid under the now-invalid IEEPA authority. Although U.S. importers typically pay the tariffs directly to the U.S. government, certain Canadian firms may have absorbed some of those costs through contractual arrangements. Legal experts suggest there may be opportunities for affected companies to pursue reimbursement, though the process could be complex and time-consuming.
For Canada, the ruling removes one layer of legal uncertainty but does not end the broader trade tensions between the two countries. With Section 232 tariffs still in place and new temporary measures announced, businesses on both sides of the border are watching closely for further developments. While the immediate disruption appears limited for most Canadian exporters, the evolving trade environment underscores the importance of stability and clarity in North America’s deeply interconnected economy.