The Trump administration is closely watching Supreme Court debates this week, as the high court hears arguments in a difficult legal dispute over President Trump’s expansive tariff program.
Tariffs imposed under “emergency powers”
The tariffs, which have been imposed since earlier this year when Trump took office for a second term, were imposed under the guise of “emergency powers” that allow the Executive Branch to impose penalties (in the form of duties/tariffs) in certain situations. While that allowed Trump to impose the tariffs quickly and across-the-board this year, it faces legal obstacles.
Imposing tariffs on nearly every country trading with the U.S., Trump made a gamble that the emergency powers the tariffs were imposed under will hold up in court.
A difficult case testing the limits of presidential power on trade matters
The case is a difficult and trying one for the Supreme Court, which is balancing Trump’s demands that he has ever-expanding executive power, with the limits of a decades-old 1977 law – the International Emergency Economic Powers Act – surrounding the very limited power to impose duties/tariffs.
Should they vote in Trump’s favor, the high court will face criticism that it did not push back hard enough against the Executive Branch and its interpretation of the law. On the other hand, voting against Trump will train the U.S. president’s fury on the court.
Earlier this year, the Supreme Court allowed the tariffs to stay in place while the fight against them continued to play out in lower courts around the U.S. The Supreme Court set an expedited schedule to hear the case, underscoring the seriousness of the case on U.S. trade matters, economic affairs, etc.
Trump administration officials are taking the case very seriously
President Trump gave thought to attending the Supreme Court arguments in-person this week but ultimately did not choose to do so. Instead, U.S. Treasury Secretary Scott Bessent will attend the proceedings, noting that he may choose to sit in the front row to listen to every word. It’s a sign that the Trump administration takes the Supreme Court’s case seriously and that tariffs are absolutely in jeopardy.
Other reporting this week pointed to the Trump administration beginning to take steps to develop contingency arguments to re-impose tariffs should the Supreme Court rule against Trump. Those measures range from everything from taking advantage of other emergency statutes, to seeking the approval of Congress, to declaring more detailed rationales for emergencies with several key trade partners.
The balance of power in question
The power to impose taxes lies in the Congress, the legislative branch of the U.S. government. It was Congress that passed the 1977 law that Trump is arguing gives him emergency trade powers. However, over the long-term, Congress will likely have to impose the tariffs via legislation in order for them to have lasting meaning and in order to pass legal muster.
The International Emergency Economic Powers Act of 1977 does not explicitly mention “tariffs”, “duties”, etc. Rather, it mentions “taxes”. This important distinction may be used as part of any Supreme Court decision on the matter.
