US Supreme Court justices appeared sceptical over the legality of President Donald Trump’s authority to impose sweeping global tariffs under the International Emergency Economic Powers Act (IEEPA) during oral arguments on 5 November.
Trump invoked IEEPA in April after declaring the country’s trade deficit a national emergency, saying it allowed him to apply his “Liberation Day” tariffs on more than 90 countries.
US Solicitor General Dean John Sauer, representing the Trump administration, told the court that the tariffs were regulatory, not revenue-raising.
“I want to make a very important distinction here,” Sauer added. “We don’t contend that what’s being exercised here is the power to tax. It’s the power to regulate foreign commerce … The fact that they raise revenue is only incidental.”
The plaintiffs in the two cases before the Supreme Court – Illinois-based toymaker Learning Resources and a group of five firms led by New York City wine importer V.O.S. Selectives – argue that the Trump administration has no authority to issue global tariffs without congressional approval.
Two lower courts have already ruled in their favour. However, the US Court of Appeals kept the tariffs in place to give the government time to prepare an appeal to the Supreme Court, which has a six-to-three conservative majority.
During questioning, however, Supreme Court Justice Sonia Sotomayor said she did not understand Sauer’s argument, noting that the power to tax was congressional, not presidential.
“And you want to say tariffs are not taxes, but that’s exactly what they are. They’re generating money from American citizens, revenue,” Justice Sotomayor said.
Chief Justice John Roberts appeared to agree, saying the tariffs were an “imposition of taxes on Americans, and that has always been the core power of Congress”.
Arguing on behalf of the plaintiffs, lawyer Neal K. Katyal said Congress did not give presidents the power to overhaul the tariff system when it enacted IEEPA in 1977.
“Our founders gave that taxing power to Congress alone. Yet, here, the president bypassed Congress and imposed one of the largest tax increases in our lifetimes,” Katyal said.
“It’s simply implausible that in enacting IEEPA, Congress 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.”
Trump’s tariffs, ranging from 10% to 50%, came into effect on 7 August after months of multiple reversals and volatility in global markets.
According to The Guardian, the Supreme Court has until the end of its term in July 2026 to issue a ruling on the case, although judges could issue a ruling long before that deadline.
Regardless of the outcome of the case, Ruth Benbow, Navigator Global’s ecosystem development director for North America, said other statutes are being used, or can be used, by the Trump administration to apply tariffs on a more solid legal footing.
These include Section 232 of the Trade Expansion Act of 1962, which allows a president to restrict imports that threaten national security, and Section 301, which falls under the Trade Act of 1974 and allows the US to retaliate against countries engaging in unfair trade practices.
“Businesses should be aware that tariffs are not going away, no matter the ruling. There are other laws that provide ways to implement tariffs, including time-limited tariffs, which the administration has avoided as they do not give the same negotiating power against trade partners,” Benbow said.