The Supreme Court on Tuesday agreed to hear a fast-tracked appeal over President Donald Trump's sweeping global tariffs, setting up a major legal battle over the scope of presidential authority in trade policy. Arguments are scheduled for the first week of November, with tariffs remaining in place until the justices issue a ruling.
At issue is whether Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA), a 1977 law that allows presidents to regulate international commerce during national emergencies. Trump used IEEPA to impose a 10% baseline tariff on nearly every country earlier this year, as well as higher "reciprocal" tariffs on U.S. trading partners such as Canada, Mexico, and China. He cited long-standing trade deficits and the trafficking of fentanyl as threats to national security and the economy.
A federal appeals court in August ruled that IEEPA does not authorize the president to impose broad tariffs. "The statute neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President's power to impose tariffs," the Federal Circuit wrote in its 7-4 decision. It found Trump overstepped his authority and left tariff powers with Congress, which the Constitution designates as the sole body authorized to levy taxes and duties.
The case was brought by a coalition of small businesses and 12 states, who argue the president's actions wreaked havoc on the economy. "The government's case rests entirely on the notion that the phrase 'regulate ... importation' in IEEPA constitutes a boundless power to impose tariffs on the American people whenever the President wants," the plaintiffs told the Court.
The Justice Department, led by Solicitor General D. John Sauer, countered that blocking Trump's authority would disrupt "sensitive, ongoing diplomatic trade negotiations" and warned of an "unprecedented economic and foreign-policy crisis." White House spokesman Kush Desai said, "President Trump has acted lawfully by using the tariff powers granted to him by Congress in IEEPA to deal with national emergencies and to safeguard our national security and economy."
The stakes are considerable. The Treasury Department reported that $475 billion in tariff revenue has already been collected this fiscal year, with $210 billion tied to the contested duties. If the Court strikes them down, experts say the government may need to refund hundreds of billions to importers, potentially through a new administrative process.
Economists warn the additional months of tariffs could further strain the U.S. economy. The Bureau of Labor Statistics recently reported tariff-sensitive industries, including construction and manufacturing, lost tens of thousands of jobs, while consumer prices for imported goods have risen. Inflation data due later this week is expected to reflect further increases.
Trump has defended the tariffs as leverage to negotiate trade deals with allies and adversaries alike. His administration has announced frameworks with the European Union, United Kingdom, Japan, South Korea, Vietnam, Indonesia, and the Philippines. He has also used Section 232 of U.S. trade law to impose sector-specific tariffs, most recently a 50% duty on steel and aluminum derivatives, which are not currently under legal challenge.
