This week, the Supreme Court of the United States had its highest-stakes hearing in decades. During his second term, they looked at whether former President Donald Trump had the authority to impose tariffs. The suit focuses on the International Emergency Economic Powers Act (IEEPA) of 1977. Trump’s legal team contends that this law provides him wide latitude to impose tariffs. Justices questioned the implications of these powers and their potential impact on approximately $90 billion in import taxes already paid by U.S. businesses.
At oral arguments, Chief Justice John Roberts and Justices Amy Coney Barrett and Neil Gorsuch expressed doubt. They challenged the scope of power Trump’s administration asserted. This hearing is a big deal. If the court waits until June 2024 to issue its ruling, the tariffs potentially rise to an unbelievable $1 trillion.
In February 2023, Trump’s first invocation of the IEEPA. He argued that illegal drug trafficking from countries such as China, Mexico, and Canada constituted such an emergency that justified imposing the tariffs. He defined the current U.S. trade deficit as an “extraordinary and unusual threat” to national security. Long since then, he has crowed to raking in billions in revenue thanks to these tariffs. Historically, these tariffs served as an important funding source for the federal government.
According to the Constitution, Congress has the legal authority to levy tariffs. This should cast grave doubt on their veracity with respect to making wide-ranging claims of election malfeasance. His administration argues that Congress has given him special “emergency” authority. This gives him the ability to short-circuit the regular procedures normally needed to put tariffs in place.
During the case, Chief Justice Roberts expressed concern that this delegation of power is unthinkable.
“The justification is being used for power to impose tariffs on any product from any country in any amount, for any length of time.” – Chief Justice John Roberts
The Justices continued to question the implications of granting such broad power to the presidency. Summing up the dissent’s regard for legislative responsibility, Justice Gorsuch asked a profoundly important question.
“What would prohibit Congress from just abdicating all responsibility to regulate foreign commerce?” – Neil Gorsuch
Solicitor General John Sauer defended Trump’s position vigorously. He maintained that tariffs are an important, if not the primary, tool for trade regulation and desire any revenue produced to be only “incidental.” He was challenged by a number of justices on the future consequences of granting that power. Neil Katyal, who argued the case for the challengers of the tariffs, swatted away the administration’s arguments. He described them as “implausible” and noted that they grant the president carte blanche control over the whole tariff system.
“It handed the president the power to overhaul the entire tariff system and the American economy in the process, allowing him to set and reset tariffs on any and every product from any and every country, at any and all times.” – Neil Katyal
In addition to questioning the constitutional validity of Trump’s tariff powers, justices focused on the practical consequences of their ruling. The U.S. government has reaped almost all of the government’s tariff revenue this year through September from these actions. And the fiscal stakes couldn’t be any higher. Should the court rule Trump’s tariffs unconstitutional, the administration will then need to look for other methods to impose tariffs.
Karoline Leavett, a new legal analyst with the administration, added that being ready for that possibility is a major priority for the administration.
“It would be imprudent of the president’s advisors not to prepare for such a situation.” – Karoline Leavett
The hearing made clear, again, the problematic ways in which these tariffs have upended established trade patterns, their sustainability moving forward, and even their justification at all. Such an aggressive approach, critics contend, risks undermining U.S. international relations and inviting retaliatory action from targeted countries.
Legal experts contend that these tariffs have left American industry between a rock and a hard place. All of these industries heavily rely on imports from countries that are subject to Trump’s tariffs. Without clear guidance on the legality of these measures, businesses are left in limbo about potential costly changes and trade deals ahead.
This case is about more than just economic hardship. It raises core questions about the separation of powers and the executive’s authority to unilaterally regulate interstate commerce. As the court deliberates on this complex matter, both sides await a decision that could redefine presidential power and reshape U.S. trade policy for years to come.