Supreme Decision Expected To Free Ad Budgets

The U.S. Supreme Court ruled 6-3 Friday that President Donald Trump's sweeping tariffs imposed under the International Emergency Economic Powers Act (IEEPA) are illegal, as the 1977 law does not authorize the president to impose tariffs without clear congressional approval. 

Chief Justice John Roberts wrote the majority opinion, stating the president must point to explicit congressional authorization for such extraordinary power.

The decision strikes down broad tariffs enacted in 2025 on imports from nearly every trading partner, disrupting industries including retail and automotive, the sectors that pulled back most on digital advertising due to elevated costs. This removes a key financial pressure that prompted ad spending cuts, potentially freeing up budgets for increased digital marketing investments.

The ruling does not address refunds for the billions (estimates range from $130-175 billion) already collected in duties, leaving that to lower courts and potentially creating economic uncertainty or a "mess," as noted in dissents by Justices like Brett Kavanaugh. Importers may seek refunds from the Treasury, though costs passed to consumers are unlikely to be directly reimbursed.

The decision has major global economic implications, limiting presidential unilateral tariff authority under emergency powers and reaffirming Congress's constitutional role over taxes and trade. Trump responded defiantly, denouncing some justices and imposing a new 10% global tariff under different statutory authority.

Industry forecasts reflect optimism for recovery: 

• Emarketer revised its retail sales outlook upward (now 3.5% growth to $7.78 trillion in 2026, about $13 billion higher than prior estimates), citing reduced import costs. U.S. digital ad spending is projected at $338.27 billion this year (9.5% YoY growth), down from an earlier 11.5% forecast but supported by the tariff relief. 
• The Interactive Advertising Bureau anticipates 9.5% overall digital ad growth in 2026 (7.1-7.8% excluding major events like midterms, Winter Olympics, and FIFA World Cup).Retail and automotive sectors, hardest hit by prior tariffs, stand to benefit most from lower costs, potentially redirecting savings to advertising. 
• The News/Media Alliance praised the ruling, noting tariffs threatened jobs in publishing, printing, and paper industries while harming quality journalism.

Broader trade policy uncertainty persists, as the administration pursues alternatives, but the ruling eases immediate cost burdens for consumer technology, automotive, and retail advertisers most affected by the original levies.