A considerable number of US Supreme Court justices displayed significant doubt regarding the legality of a range of tariffs imposed by Donald Trump during a pivotal case heard on Wednesday. The outcome of this case could either support or disrupt the president’s economic plans, involving billions of dollars in customs revenue and a crucial aspect of Trump’s trade policies. The conservative-leaning panel on the high court is once again deliberating on Trump’s efforts to expand presidential powers, particularly through his use of emergency powers to enforce tariffs on nearly all US trading partners, as well as specific tariffs on Mexico, Canada, and China due to alleged involvement in illicit drug activities.
During the lengthy hearing, lasting over two and a half hours, several justices, both conservative and liberal, raised questions about whether the International Emergency Economic Powers Act (IEEPA) invoked by Trump provides the authority to implement tariffs. Chief Justice John Roberts pointed out that the statute does not explicitly mention tariffs and likened imposing tariffs to taxation, a power historically held by Congress. The justices aimed to clarify whether Congress must explicitly authorize policies with significant economic or political consequences.
Representing the Trump administration, Solicitor General John Sauer argued that the president’s broad range of inherent powers negates the need for explicit authorization in this case. He portrayed the issue as centered on the power to regulate foreign commerce, including the imposition of tariffs, rather than taxation. Justice Sonia Sotomayor highlighted that the authority to levy taxes lies with Congress, not the president, challenging the argument that tariffs are not a form of taxation.
Justice Neil Gorsuch, appointed by Trump, questioned whether Congress could reclaim delegated powers from the presidency, suggesting that once powers are given, they may not be easily retrieved. Neal Katyal, representing small businesses opposing Trump’s tariffs, argued that it was unrealistic to assume that Congress intended to grant the president the authority to overhaul the tariff system and influence the economy under IEEPA. The discussion also touched on potential complexities surrounding refunds if Trump’s tariffs were invalidated, with Justice Amy Coney Barrett expressing concerns about the aftermath.
The Supreme Court’s ruling on this matter, expected in the coming months, does not pertain to sector-specific tariffs imposed by Trump separately, such as those on steel, aluminum, and automobiles. Trump’s tariffs have raised the average effective tariff rate to levels not seen since the 1930s, with warnings of dire consequences if these measures are overturned. A previous court ruling in May concluded that Trump had overstepped his authority, leading to the case reaching the Supreme Court.
Despite Trump’s absence, top officials including Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer attended the hearing. Analysts from ING noted the court’s historical reluctance to challenge significant presidential decisions but highlighted the potential shift in power from Congress to the President if Trump’s tariffs are upheld. Concerns lingered about the implications of overturning the tariffs, including logistical challenges and impacts on foreign policy negotiations.
While Trump’s tariffs have not triggered widespread inflation, companies have voiced concerns about bearing the burden of increased import costs. If the Supreme Court deems Trump’s global tariffs unlawful, the government could utilize other statutes to temporarily impose duties of up to 15 percent while exploring options for more permanent levies. Countries that have already reached agreements with Trump may opt to avoid renegotiating deals in light of potential outcomes.