Washington — The Supreme Court is set to consider Wednesday whether President Trump can unilaterally impose tariffs on nearly every country under a federal emergency powers law, with the justices poised to test a centerpiece of his economic agenda and the limits of presidential powers.
The court fight over Mr. Trump’s sweeping tariffs marks the first in which the Supreme Court will weigh the legal merits of one of the president’s signature policies implemented in his second term.
Three lower courts have concluded that most of the president’s tariffs are illegal, and a ruling from the Supreme Court upholding those decisions would deal a blow to Mr. Trump’s plans to use tariffs as leverage to push U.S. trading partners to negotiate better trade deals. The president has also claimed that tariffs help to boost domestic manufacturing.
At issue in the case are two sets of duties that Mr. Trump rolled out through a series of executive orders earlier this year. The president has relied on a 1977 law called the International Emergency Economic Powers Act, or IEEPA, to impose the tariffs.
The first tranche set a baseline rate of 10% on nearly every U.S. trading partner, as well as higher reciprocal tariffs on dozens of countries in response to what he said are “large and persistent” trade deficits. The second targeted China, Canada and Mexico with tariffs of varying rates for what he asserted was their failure to stop the flow of fentanyl and other illegal drugs into the U.S.
In his executive orders, the president declared trade imbalances and the trafficking of drugs across U.S. borders as national emergencies, which unlocked IEEPA’s powers. The law authorizes the president to “regulate … importation” to deal with “any unusual and extraordinary threat” to national security, foreign policy or the U.S. economy. Mr. Trump has argued that trade deficits and the failure to curtail the flow of illicit drugs into the country qualify as such a threat.
Presidents have used IEEPA dozens of times over the past nearly 50 years to impose sanctions on foreign actors, but it has never before been used to levy tariffs.
Since Mr. Trump announced the import taxes in February and April — on what he called “Liberation Day” — the administration has reached trade deals with at least 10 countries and the European Union, and said it is “actively negotiating” with other nations.
But after the rollout of the new levies, two sets of small businesses and a group of 12 states filed lawsuits arguing that IEEPA doesn’t authorize the president’s sweeping action. The first case was brought in Washington, D.C., by a pair of Illinois-based educational toy companies. The others, filed in the U.S. Court of International Trade, came from a group of five small businesses and Democratic officials from 12 states.
The U.S. district court in Washington and the Court of International Trade separately ruled against the administration, concluding that IEEPA doesn’t give the president the authority to impose his global and trafficking-related tariffs.
The U.S. Court of Appeals for the Federal Circuit, which reviewed the trade court’s decision in cases from the five small businesses and states, ruled 7-4 that many of the president’s levies are illegal. The appeals court found that while IEEPA may authorize some tariffs, the law didn’t allow for those “of the magnitude” of Mr. Trump’s.
Still, it allowed the Trump administration to continue collecting the sweeping tariffs while the legal battles play out.
Mr. Trump has also continued to rely on IEEPA to impose new levies or tweak existing rates, including raising Canadian tariffs to 35% (though many of its goods are subject to exemptions), imposing an additional 40% duty on Brazil and threatening China with an additional 100% duty, though the president has since walked that back. Mr. Trump announced last week following a meeting with Chinese President Xi Jinping that he would be reducing the tariffs on goods imported from China.
The Supreme Court is hearing the dispute over Mr. Trump’s tariffs on an extremely fast timeline, having agreed in September to decide the cases, and could move quickly to issue a ruling.
Trump administration argues for presidential powers
In urging the high court to uphold the duties, the Trump administration has argued that Congress has long given the president broad authority to impose tariffs to address emergencies. IEEPA, Solicitor General D. John Sauer wrote in a filing, is a continuation of that tradition because it gives the president the power to “regulate … importation.”
Sauer also said that the tariffs are an exercise of Mr. Trump’s power over national security and foreign affairs, and courts should give deference to his determination that the duties are best suited for addressing national emergencies arising from trade deficits and drug-trafficking.
Invalidating those levies, Sauer wrote, would have “catastrophic consequences” for national security, foreign policy and the economy.
“To the President, these cases present a stark choice: With tariffs, we are a rich nation; without tariffs, we are a poor nation,” he said.
Mr. Trump is highly invested in the case, calling it “one of the most important in the history of the country.” The president floated attending the arguments in person, but he reversed course Sunday, writing on social media that he did “not want to distract from the importance of this decision.”
Treasury Secretary Scott Bessent told Fox News on Monday that he will be at the arguments with a “ringside seat.” White House press secretary Karoline Leavitt said Bessent is attending at the president’s request.
Businesses warn of economic impact
On the other side, the small businesses warned in court papers that Mr. Trump’s tariffs have significant economic consequences. An analysis from the Tax Foundation found the duties will impose $1.7 trillion in new taxes on Americans by 2035, reduce GDP growth by 0.7% per year, and reduce income by 1.1% in 2026.
Neal Katyal, who will argue on behalf of the companies before the Supreme Court, said the Trump administration’s interpretation of IEEPA is a “breathtaking assertion” of power that requires explicit authorization from Congress. IEEPA, he said, doesn’t even mention the word tariff or duty, and no president has understood the law to authorize them.
If the Supreme Court agrees with Mr. Trump that the power to tax is found in IEEPA through the phrase “regulate … importation,” then “the president, empowered by a supercharged U.S. Code, could tax everything from autos to zoos,” Katyal wrote in a filing.
The plaintiffs also argued that trade deficits hardly constitute an “unusual and extraordinary threat,” as imbalances have lasted for five decades, and Mr. Trump himself has described them as “persistent.”
Additionally, the power to levy taxes and duties rests squarely with Congress, and any delegations of that power have been “explicit and strictly limited,” they said. And indeed, there are numerous other statutes in which Congress has delegated its tariffing power — some of which have been used by Mr. Trump — though they put constraints on the president.
Testing the boundaries of presidential authority
The dispute over Mr. Trump’s efforts to use IEEPA to impose his sweeping tariffs comes as he has tested the boundaries of his presidential authority, including through his firings of independent agency officials, the withholding of $4 billion in foreign aid approved by Congress and his efforts to overhaul the executive branch.
Those cases have already been before the Supreme Court, though at earlier stages than the challenges to Mr. Trump’s tariffs. In most of those emergency appeals, the conservative justices have allowed the Trump administration to temporarily enforce its policies while proceedings in the lower courts continue.
Like those other cases, the dispute over whether Mr. Trump has the authority to impose duties on nearly every country under IEEPA without Congress could have significant implications for presidential power.
The Supreme Court has been skeptical of broad assertions of executive authority on issues of major political and economic significance when Congress has not spoken clearly, invoking what’s called the major questions doctrine to invalidate former President Joe Biden’s plan to wipe away more than $400 billion in student loan debt and block an eviction moratorium during the COVID-19 pandemic.
That legal principle is raised in the battle over his tariffs, though the Trump administration argues that it doesn’t apply to matters of national security and foreign policy.
“Judges lack the institutional competence to determine when foreign affairs pose an unusual and extraordinary threat that requires an emergency response; that is a task for the political Branches,” Sauer wrote.
But lawyers for the small businesses counter that tariffs are a tax on the American people, and the Constitution has vested the taxing power in Congress.
“The Framers understood that taxation is a potent power that can destroy the taxed as it fills the sovereign’s coffers. The Constitution vests that extraordinary power exclusively in the branch of government considered most responsive to the citizenry: Congress,” lawyers for the Illinois companies wrote in a filing. “This Court should not lightly assume that Congress abdicated its core taxing power to permit the President to tax Americans with virtually no limits.”