Tariff ruling from Supreme Court still leaves ‘severe’ risk to Canadian jobs, says union
U.S. president Donald Trump is casting the Supreme Court’s recent tariff ruling as a green light to escalate trade measures.
In a 6–3 ruling, the Court concluded it was not legal for Trump to use the International Emergency Economic Powers Act, better known as IEEPA, for his “Liberation Day” tariffs and fentanyl‑related duties on Canada, Mexico and China.
“The United States Supreme Court’s decision reinforces Canada’s position that the IEEPA tariffs imposed by the United States are unjustified,” Canada‑U.S. Trade Minister Dominic LeBlanc said in a post on social media.
“While Canada has the best trade deal with the United States of any trading partner, we recognise that critical work lies ahead to support Canadian businesses and workers who remain affected by Section 232 tariffs on steel, aluminium and automotive sectors.”
In a lengthy social media post responding to the decision on the International Emergency Economic Powers Act (IEEPA), Trump claims the Court has “accidentally and unwittingly” handed him, as president, “far more powers and strength” than he had before what he calls a “ridiculous, dumb, and very internationally divisive ruling.”
He argues that while the justices blocked his use of IEEPA for broad “Liberation Day” tariffs and certain fentanyl‑related duties, they have effectively endorsed the rest of his trade arsenal. “The court has also approved all other Tariffs, of which there are many, and they can all be used in a much more powerful and obnoxious way, with legal certainty, than the Tariffs as initially used,” he writes.
‘Critical work lies ahead’: union
However, Unifor is warning that the U.S. Supreme Court’s decision to strike down a key set of emergency tariffs does not reduce what it calls a “severe” and potentially worsening threat to Canadian jobs, even as economists and legal experts say the ruling curbs one of Washington’s most aggressive trade tools.
In a Feb. 20 statement, Unifor said the Court’s move to invalidate tariffs imposed under the International Emergency Economic Powers Act (IEEPA) “represents a legal rebuke of presidential overreach but does nothing to resolve the ongoing trade crisis threatening Canadian jobs and key industrial sectors.”
“This ruling exposes how abusive and legally flawed the IEEPA tariffs were, but Canadian workers should not mistake this for a victory,” said Unifor National President Lana Payne. “The risk to Canadian jobs remains severe, with the potential to even increase if Trump looks for new ways to impose tariffs or target Canadian jobs and investment.”
The union argued that while the Court confirmed IEEPA does not grant the president authority to impose sweeping “economic emergency” tariffs, the decision “does not end the U.S. trade war against Canada with industry‑targeted Section 232 tariffs and other punishing measures still in place.”
Payne said “the most damaging tariffs Canada faces were never IEEPA tariffs in the first place, because the Trump Administration chose to exempt goods that comply with our trade agreement,” and warned that “so‑called ‘national security’ tariffs under Section 232, targeting auto, steel, aluminium, and wood products remain fully in force and could be expanded at any time.”
Unifor added that the ruling has no impact on long‑running anti‑dumping duties, including the softwood lumber dispute, which it said “continues to punish Canadian workers and communities.” The union reiterated its call for governments to respond with “strategic industrial policy and investments” to build a more resilient economy and defend Canadian sovereignty.
The U.S. Supreme Court’s decision in Learning Resources, Inc. v. Trump sharply limits the use of the International Emergency Economic Powers Act (IEEPA) for tariffs but leaves other powerful trade tools – and significant uncertainty – in place.
In August 2025, Ottawa announced it is investing $450 million over the next three years through the Regional Tariff Response Initiative (RTRI), which is intended to help businesses improve productivity, expand and diversify markets, and strengthen domestic supply chains and trade resilience. But business leaders across the country still called for increased government support, improved access to capital, and meaningful tax reform ahead of the release of the latest federal budget, according to a KPMG report.
Court limits IEEPA but leaves other tariffs in place
Borden Ladner Gervais (BLG) notes the Court held that IEEPA “does not confer authority to impose tariffs,” even though it allows the president to “regulate” imports during a national emergency. Tariffs were deemed a form of taxation reserved to Congress, requiring “clear and express” legislative authorisation. As a result, tariffs imposed under IEEPA are invalidated, including broad “reciprocal” country‑specific duties on many trading partners, such as Canada, and fentanyl‑related tariffs on goods from Canada, Mexico and China.
However, the ruling is tightly confined to IEEPA. BLG stresses it “does not affect tariffs imposed under other statutory authorities, such as Section 232 of the Trade Expansion Act of 1962 (e.g., steel and aluminium tariffs),” which remain in force. The firm says the decision “materially reduces the risk of sudden, economy wide tariffs imposed under emergency powers,” improving legal predictability for Canadian exporters, but also “confirms that tariff risk has not been eliminated,” since sector‑specific measures under other laws still pose compliance and cost challenges.
TD Economics says the Court “upheld the lower courts rulings” finding the administration’s IEEPA tariffs unlawful and concludes that, unless Congress amends the law, “the executive branch will not be able to use it to implement tariffs.” TD estimates IEEPA tariffs had generated US$133 billion, about 60% of total U.S. tariff revenue in 2025, and notes the Court “did not explicitly rule on how or if this revenue would be refunded,” pointing to likely further litigation. The bank expects Washington “will act quickly to recreate its tariff regime using alternative tariff policies,” including potential use of Sections 122, 338, 232 and 301, and warns that 2026 will begin “with elevated tariff uncertainty” that weighs on growth and “pushes interest rates higher” in the near term.
EY‑Parthenon chief economist Gregory Daco calls the ruling a “de‑escalation in US trade policy” but “not a full reset.” EY says it wipes out IEEPA‑based tariffs on goods from Canada, Mexico and China, including “the global 10% and country‑specific tariffs,” yet “does not affect national security tariffs imposed under Section 232 or existing tariffs implemented under Section 301,” which stay in place.
EY reports President Donald Trump has said he will “immediately impose a 10% global tariff under Section 122 of the Trade Act of 1974, applied over and above tariffs already in place,” signalling “a pivot in legal authority rather than a retreat from the broader tariff framework.” EY estimates that scrapping IEEPA tariffs cuts the average U.S. tariff rate from about 16.8% to 9.0%, with the new 10% global tariff lifting it back towards 11%.
Overall, the decision “materially reduces the economic drag associated with IEEPA‑based tariffs,” but EY concludes that “tariff risk has not been eliminated, and policy uncertainty remains elevated.”
Nearly one in five (19%) Canadian small businesses facing tariff-related costs say they will not survive more than six months if current conditions persist, according to a previous study.
