The Supreme Court is set to hear significant arguments regarding the legality of President Donald Trump’s global tariffs program this Wednesday. This landmark case holds profound implications for American consumers, businesses, the nation’s financial stability, global diplomacy, and the extent of future presidential power. According to Hofstra Law professor and ABC News legal contributor James Sample, “This is a staggeringly important case from an economic perspective and from a separation of powers perspective.”
If the tariffs are deemed invalid, the U.S. government could face tens of billions of dollars in refunds to businesses that have complied with the tariffs. Such a ruling could also eliminate a crucial bargaining tool that Trump has leveraged in international negotiations. Conversely, a decision that upholds the tariffs would solidify an expansive new exercise of presidential power and uphold a key aspect of Trump’s agenda. Economists predict that while this could bolster some sectors of U.S. manufacturing in the long run, it may also impose an average cost of over $1,700 on American families this year due to increased prices.
The U.S. Constitution explicitly grants Congress the exclusive authority to levy taxes on citizens and duties on imports, with a few exceptions that allow the president some discretion during national emergencies. The crux of the Trump case revolves around whether the 1977 International Emergency Economic Powers Act (IEEPA) permits the president to impose tariffs freely on any country, at any level, for an indefinite period during a declared emergency.
Trump, who is the first president to utilize this law to impose tariffs, argues that its broad language grants him extensive powers that align with his responsibilities concerning foreign affairs and national security. In July, he stated on Truth Social, “If our Country was not able to protect itself by using TARIFFS AGAINST TARIFFS, WE WOULD BE ‘DEAD, WITH NO CHANCE OF SURVIVAL OR SUCCESS.”
The IEEPA allows the president to regulate imports in response to an “unusual and extraordinary threat” to national security after declaring a national emergency. Shortly after his inauguration, Trump declared emergencies concerning illegal immigration and drug trafficking from several countries. In April, he further declared an emergency regarding persistent trade deficits with numerous nations, subsequently imposing tariffs ranging from 10% to over 100% on imported goods.
A coalition of small business owners and states led by the Democratic Party has challenged Trump’s tariffs, arguing that the term “regulate” in the law does not encompass tariffs or taxes, which are not explicitly mentioned. They contend that the emergencies declared by Trump do not meet the “unusual” or “extraordinary” criteria required by the IEEPA. The states emphasized in their legal brief, “Congress, not the president, decides whether and how much to tax Americans who import goods from abroad.”
Historically, the Supreme Court has not interpreted the IEEPA’s provisions. Should the court affirm the tariffs, it would mark a significant shift in the constitutional framework governing taxation, spending, and economic regulation. Various lower courts, including the Court of International Trade and the U.S. Court of Appeals for the Federal Circuit, have ruled in favor of the tariff challengers, stating that the power to regulate does not equate to the power to tax.
Judge Rudolph Contreras noted succinctly, “The power to regulate is not the power to tax.” Additionally, the Court of International Trade invalidated Trump’s tariffs related to drug trafficking, highlighting that the threats posed by drug trafficking do not qualify as an “unusual and extraordinary threat.” While the lower courts have ruled against the tariffs, these tariffs remain in effect until the Supreme Court delivers a final decision.
The financial repercussions of these tariffs have particularly affected American small businesses. For instance, Learning Resources Inc., a manufacturer of children’s toys based in Illinois and a plaintiff in the case, reported a loss of profits and halted hiring due to tariffs. CEO Rick Woldenberg stated, “We paid $2.3 million in tariffs in 2024... Based on our 2025 budget, we would have paid $100 million in tariffs at Trump’s 145% rate on China.”
Similarly, Cassie Abel, CEO of Wild Rye, a women’s technical clothing company based in Idaho, expressed that the tariffs threaten her business's survival, stating that the supply chain for her products is primarily based in China. Meanwhile, Aabesh De, founder of Flora, a Tennessee company producing smart plant monitors, described the tariffs as having “crippled” innovation and product development, likening the situation to an existential crisis.
Regardless of the Supreme Court's ruling, some of Trump’s tariffs and powers will likely remain, albeit under stricter federal regulations. Currently, more than a third of U.S. imports, including steel, aluminum, machinery, and medical devices, are subject to import taxes under Section 232 of the Trade Expansion Act of 1962. This section permits the president to impose tariffs on specific industries for national security purposes. Other provisions under the Trade Act of 1974 allow targeted tariffs based on unfair trade practices but require investigations and are limited in scope.
Trump has emphasized the importance of IEEPA tariffs for the country’s economic future, raising the stakes for the Supreme Court justices as they review his appeal. “That’s one of the most important cases in the history of our country because if we don’t win that case, we will be a weakened, troubled, financial mess for many, many years to come,” he stated at a recent White House event.
The conservative majority of the Supreme Court has generally supported executive authority in matters of foreign policy and national security. However, the court has also blocked presidential efforts to implement sweeping domestic policies without congressional approval. Constitutional law expert Jonathan Adler noted the tension within the court, stating, “If they see it as a foreign affairs case, the administration wins. If they see it as a textual interpretation case, they lose.”
The court has expedited the process for the Trump tariffs case, but a timeline for a decision remains uncertain. A ruling is anticipated before the end of June 2026, marking a pivotal moment in the ongoing debate over the balance of power between the presidency and Congress regarding tariff authority in the United States.
