Supreme Court strikes down Trump’s tariffs. Here’s how they’ve affected California

In a major blow against President Donald Trump, the U.S. Supreme Court ruled Friday that he does not have the authority to impose the wide-ranging tariffs that have caused economic uncertainty in the state, nation and beyond.

Trump cited the International Emergency Economic Powers Act of 1977 as he set tariffs on goods from most countries around the world soon after he took office early last year. In a 6-3 decision, the court said only Congress has the broad power to impose taxes on Americans under the act.

“The President enjoys no inherent authority to impose tariffs during peacetime,” Chief Justice John Roberts wrote for the majority. Justices Clarence Thomas, Samuel Alito Jr. and Brett Kavanaugh dissented.

The White House did not immediately respond to CalMatters’ questions, including whether it plans to cite other laws. The Trump administration has the power to impose tariffs using other laws, but the president has used tariffs as an economic cudgel largely under the act that the Supreme Court has now said does not give him the broad authority to do so.

American businesses and consumers have paid the bulk of the cost of the president’s tariffs, recent studies by researchers for the Federal Reserve Bank of New York and others have shown. In California, the tariffs have affected ports, farms, businesses, workers and consumers in different ways, and have been a factor in persistent inflation.

The state’s trade activity with China dropped so steeply that it is no longer the state’s top trade partner, according to a recent Public Policy Institute of California analysis.

Daniel Payares-Montoya, the researcher for the PPIC who based his analysis on International Trade Administration data, said trade with China has been declining since Trump’s first term, “but to see the dramatic fall, I wasn’t expecting it.”

In 2024, imports from and exports to China comprised 20% of all California trade activity. In 2025, at least through October, that number fell to 13.4%. Mexico became the state’s top trade partner, followed by China and Taiwan.

Payares-Montoya stressed that his analysis wasn’t causal: “I can’t tell what would have happened in the absence of (Trump’s tariff unveiling known as) ‘Liberation Day,’ or if Kamala Harris had won (the presidency).”

The state’s beverage industry was weighed down by tariffs, the analysis showed. California’s beverage exports of brewery, winery and distillery products fell more than 32% compared to the same period in 2024, from over $1.3 billion to $880 million through October, Payares-Montoya found. A big factor was that beverage exports to Canada fell to 16% in 2025 because of a boycott of American products and travel, which also was related to the president’s threats to annex Canada. The big drop came after beverage exports to Canada averaged almost a third of the state’s yearly total from 2010 to 2024. Most recently, Trump threatened 100% tariffs on Canada for striking a trade deal with China.

Overall, the state saw a slight decline, 0.1%, to $459 billion, in the dollar value of imports and exports in the first 10 months of last year, the PPIC analysis found.

Two of the nation’s busiest ports, in Long Beach and Los Angeles, ended up handling their highest and third-highest volumes of cargo, respectively, last year despite the uncertainty around tariffs. But exports decreased as retaliatory tariffs hit American farmers, too.

A hydrogen-powered, rubber-tired gantry crane loads a shipping container onto a semi-truck at Yusen Terminals at the Port of Los Angeles in San Pedro on Feb. 11, 2025.

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Joel Angel Juarez

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CalMatters

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Gene Seroka, executive director of the Port of Los Angeles, said in a media briefing this week that soybean exports to China from his port fell 80% last year.

“Virtually every agricultural commodity that we export was affected,” said Noel Hacegaba, chief executive of the Port of Long Beach, in an interview with CalMatters this week.

The Supreme Court decision will spark what could be a chaotic process to return the tax revenue the government has collected, which totaled more than $264 billion in 2025. U.S. corporations including Costco, Alcoa and Revlon have sued the federal government over the tariffs, hoping to be first in line for refunds.

In his dissent, Kavanaugh wrote that the Supreme Court’s decision is likely to lead to “serious practical consequences in the near term,” and that “refunds of billions of dollars would have significant consequences for the U. S. Treasury.”

Trump has fretted on social media about possible refunds, saying that “it would be a complete mess, and almost impossible for our Country to pay. Anybody who says it can be quickly and easily done would be making a false, inaccurate, or totally misunderstood answer to this very large and complex question.”

But U.S. Treasury Secretary Scott Bessent has said that the federal government could issue refunds if needed, though he questioned how businesses would handle possibly getting their money back: "Costco, who's suing the U.S. government, are they going to give the money back to their clients?"

Costco, which filed its lawsuit in November, did not respond to questions by CalMatters, including about how soon it would seek refunds from the federal government. The Treasury Department did not respond to an email about how refunds would work.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.