SCOTUS Strikes Down Trump’s Trade Tariffs

From Tokyo, Japan and New Plymouth, New Zealand – this is Down to Business English. With your hosts Skip Montreux and Samantha Vega. Samantha Vega, how are you today? Ah, I'm doing great. Great to talk to you, Skip. Great. Did you feel that seismic move last week? How would I feel an earthquake if we don't live in the same country? Well, I'm talking in terms of global trade and international business. There was a huge shock worldwide. Oh, okay. Now I know what you're saying.

Are you talking about SCOTUS striking down Donald Trump's tariff policy? That's exactly what I'm talking about. What's SCOTUS again? SCOTUS stands for the Supreme Court of the United States — SCOTUS. That's right. After a year of intense trade disruptions, the US Supreme Court just dismantled the president's tariffs. But does that mean that they're finished? Mm. That's a very good question. And today on Down to Business English, that's exactly what I would like to talk about.

We are going to review the timeline of the tariffs, break down the Supreme court's ruling a little bit to see exactly what they said and examine how other countries around the world are reacting. Then we'll talk a little bit about the Trump administration's Plan B. Sounds like a plan. And I want to remind listeners as well, so pay attention to the dialogue because we'll break it down to key business English vocabulary words at the end of the show. So let's do it.

Let's get D2B … Down to Business with SCOTUS Strikes Down Trump's Trade Tariffs.

Let's start with a bit of a timeline of how we got here. As everyone knows, Donald Trump won his second term as president in November of 2024. And all through the campaign, he was talking about how the word tariff was his favorite word. The best word in the English language, he used to say. So as soon as he came to power in January of 2025, he brought in these tariffs specifically against Mexico, Canada, and China, I can't remember of 20, 25%.

And he used something called the International Emergency Economic Powers Act or IEEPA to put these tariffs in place. That's right. And I remember because it was all, or the reason why he said he put it on was because everybody was, uh disrupting the US by bringing fentanyl into the country. And it was actually … Drugs. Yeah. And it was and it was um the difference between what was coming across the border from Mexico as compared to Canada was just, was like black to white.

Oh, it was, it … it was ridiculous. I mean, yes. Yeah, yeah, yeah. A lot of drugs were moving from Mexico into, into the United States. But looking from Canada to the United States, it's virtually nothing. That was like the, the first step onto the tariff ladder. And later the administration expanded it by imposing global reciprocal tariffs. That happened on April the 2nd, 2025, what he called Liberation Day.

So … That's right, Liberation Day. Yeah, Liberation Day from, from 10% to 50% greater in some cases as well. Brought out the map of different countries that were going to be hit with these tariffs. And it was all to address US trade deficits. Those tariffs that he unilaterally declared on Liberation Day, those sparked immediate retaliation from trading partners all around the world.

And it also triggered massive lawsuits from US businesses who argued the president had exceeded his legal authority by enacting those tariffs. Plus, that also pushed other traditional trading partners like Canada and the EU to start looking at alternative trading partners like China so that they weren't so dependent on the US. And that is going to have huge implications moving forward. Yeah, we are looking at implications. So that is the timeline of Trump implementing the tariffs.

What was the big news coming from SCOTUS last week? The news was on February 20th 2026 the Supreme Court of the United States ruled six to three that IEEPA does not authorize the President of the United States to impose tariffs. Ah, as an individual, I think I get it now. So, why weren't the emergency declarations enough to justify the tariffs?

Great question. Chief Justice John Roberts reasoned that IEEPA does allow the president to regulate foreign commerce, but he also determined that the power to regulate does not inherently include the power to tax. The US Constitution reserves that power, that power to levy taxes and duties on US citizens — that power is exclusively for the Congress, not the President. So Congress can make the decisions, but the individual, as in the President, can't do it solo. Yeah, that's basically it.

The response from countries like Canada and France, who originally took a pretty hard line against the tariffs, are firmly welcoming the decision calling the levies unjustified. But at the same time many of the tariffs that Canada is experiencing don't fall under the IEEPA tariffs so there'll be very little change from this announcement.

Yes and also I'd like to point out that many nations are also taking a more cautious stance because things seem to be quite volatile and things that are said from the US at the moment. Uh the European Union, the UK, Mexico, they've signaled that they're carefully watching Washington before they make any sudden moves and they recognize that the situation is yeah highly fluid. China also issued a measured response stating that the tariff wars serve in no one's interest.

Donald Trump and President Xiinping have a meeting on the books coming up in April. So it will be interesting to see how this impacts that set of meetings. Any idea on the numbers? How much has been made since that was imposed? From the tariffs? Yes. Yeah. Good question. Well, President Trump claimed it was trillions or hundreds of billions of dollars, but actual estimates put the figure anywhere from $130 billion to $175 billion, which of course is a lot of money.

Yeah, that's not just pocket change. Uh, another million-dollar question. We'll make it a billion dollar question just for fun. Okay. Uh, so importers can expect billions of dollars in refunds and returns getting back to normal trade now? Are they going to get refunded the money that they paid forward? That is a billion-dollar question because how that money is refunded or even if there will be refunds is a logistical mess and neither the court or the administration uh knows how to deal with it.

I mean, how do you refund that money? Does it go to the US importer who paid the tariff or do you fund it or do you give that money to the customer, the US consumer who paid the tariff through increased uh prices. It … it really is a mess. I can see how you're calling it a logistical mess. Mm. So, what was the step … what happened after that?

Well the, the administration is not backing down from this announcement. They have announced what they're calling Plan B. Plan B is involving section 122 of a different trade act, actually the Trade Act of 1974. And under that section, the president can put an immediate global tariff on international countries of up to 15%. Yeah. 10% minimum, 15% maximum is what the section 122 of the Trade Act of 1974 says. Something like that. It's also legally kept at 150 days.

So that means it's only for short-term. To establish a long-term tariff regime, the president is going to have to go to Congress and Congress will have to figure out whether they are going to impose tariffs for how long, to whom, and to what percentage. So, this is not over yet. No, it isn't. Not at all. Global businesses must still continue to navigate a highly uncertain environment.

And on that note, I think it is time for us to get D2V … Down to Vocabulary. The first item on today’s D2V list is the phrasal verb ‘strike down’. Good choice — it’s a very useful legal term you often hear in the news, especially in discussions about laws, rules, and regulations. Exactly. When something is ‘struck down’, it means a judge or a court reviewed a law or policy and decided it is not legally valid — so it can’t be enforced.

So it’s the perfect phrase for the title of today’s episode: SCOTUS strikes down Trump’s tariffs. Absolutely fitting. And you also heard it right in our introduction. After I mentioned the global shockwave in global trade, Samantha asked if I was referring to SCOTUS striking down Donald Trump’s tariffs. In other words, I was asking if the US Supreme Court had canceled the tariffs — basically, made them stop. Right.

And just to note, ‘strike down’ is mainly used for legal decisions by courts, although you will sometimes hear it used figuratively. True — but in business you’d usually say leadership ‘rejected’ or … or ‘vetoed’ a plan, and a board might ‘vote down’ a proposal. Can you give us a realistic B2B example using ‘strike down’? Sure. After the court struck down the new reporting rule, suppliers no longer need to submit the extra compliance documents each quarter. Perfect. What’s our next word?

Next up on our D2V list is the verb ‘dismantle’. When you dismantle something, you take it apart piece by piece. In business and politics, it’s often used more figuratively — when you are talking about removing or breaking down a system, a policy, or some kind of structure. Right. It has the nuance of undoing something methodically — not just stopping it for a moment, but stripping it back, step by step.

And that is how I used this word in the introduction when I said, “After a year of intense trade disruptions, the US Supreme Court just dismantled the president’s tariffs.” In simpler terms, the court basically took the US tariff setup apart — so those tariffs can not continue. How would you use dismantle in a business situation, Skip?

In a business situation you might hear something like, “After the merger, the new management dismantled the old supply chain approval process and replaced it with one global workflow, so suppliers could onboard faster.” That sounds very professional. Thank you. What is next on our list? The final item on today’s D2V list is the noun ‘retaliation’. Retaliation is a response to some kind of harm or pressure — usually by taking action back against the other side.

And it often has the nuance of payback or a countermeasure — but in a more formal way. That is very true. You hear it a lot in trade, diplomacy, and workplace disputes — when one party responds because they feel they were treated unfairly first. Exactly. In today’s report, I said that the tariffs Donald Trump announced on Liberation Day ‘sparked immediate retaliation from trading partners all around the world’.

In other words, other countries responded by hitting back with their own tariffs or restrictions. And we need to point out that the verb form, ‘retaliate’, is also very high frequency. It absolutely is. When you retaliate, you respond to an action that you see as hostile or unfair by taking some kind of action back.

So, in simpler terms, the US put tariffs on the world, and other countries reacted by doing something back — for example, putting tariffs on US imports, or adding other trade restrictions. Can you give us another example using ‘retaliation’ or ‘retaliate’ in a business context? Sure. After a major supplier suddenly raised prices, the buyer retaliated by warning that they may take their business to a competitor when the supplier’s contract came up for renewal.

Nice. That sounds like something you would actually hear in a procurement meeting. Would you like to help Down to Business English reach more people wanting to improve their Business English skills? Follow Down to Business English on Apple Podcasts, YouTube Music, Spotify, or any place podcasts are found. Leave a rating and a review and tell everyone how much you enjoy the show. Thank you for that report on SCOTUS striking down Trump’s trade tariffs, Skip. Not a problem, Samantha.

I hope our listeners found it both informative — and a little less confusing than all the headlines. Honestly, I did. It’s easy to think, ‘Okay, the court struck them down — so the whole tariff story is over.’ But as we discussed, it’s not that simple. No, it’s not. And there’s still a lot of uncertainty around what will happen next. So now it’s a wait-and-see moment. That it is.

D2B Members and Apple Podcasts subscribers — the Bonus Down to Vocabulary episode for today’s report will be released within the next few days. In that bonus episode, we will break down five additional vocabulary items that Samantha and I used in today’s report. Those words and phrases are: ‘reciprocal’, ‘unilaterally’, ‘to exceed legal authority’, ‘implications’, and the expression ‘on the books’.

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