Supreme Court to Decide Trump Tariffs Fate

What tariffs could be impacted?

Since February, Trump has signed a raft of executive orders slapping tariffs on various countries.

At issue is Trump’s use of the International Emergency Economic Powers Act (IEEPA), which has been used to impose two key types of tariffs: “trafficking” duties aimed at countries for fentanyl flowing into the US, and “worldwide” or “reciprocal” tariffs imposing blanket levies due to concerns about the trade deficit.

That’s the bulk of Trump’s tariff regime.

The IEEPA, which was passed in 1977, gives the president emergency powers to “investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit … importation or exportation” of international commerce.

Crucially, the IEEPA makes no mention of the word “tariff,” and no president has ever wielded the law the way Trump has to impose sweeping worldwide tariffs in the nearly 50 years it’s been on the books.

That is one of the key reasons why petitioners argue Trump can’t use IEEPA for his tariff blitz, and they hope that will appeal to the conservative majority’s originalist philosophy, which focuses on text and its intended meaning.

While no chief executive has ever used the IEEPA to impose tariffs, President Richard Nixon notably used the precursor law, the Trading with the Enemy Act of 1917, to implement a 10% duty on imports into the US.

In many instances, the Supreme Court has shown deference to the presidency for national security issues, which could benefit Trump.

Another key legal principle that could come up during oral arguments is Article I of the Constitution, which bestows Congress with the power to “lay and collect Taxes, Duties, Imposts and Excises.”

“The Roberts Court has held that where a statute is ambiguous and is subject to more than one reading, the court will apply the reading which will not raise a fundamental constitutional question,” Shaffer explained.

“If it applies that doctrine, the constitutional avoidance doctrine, then it will decide that ‘regulate’ doesn’t include setting tariffs.”

Trump is already using some of those tariff powers to impose some of his more specific duties on raw materials like steel and aluminum.

The Supreme Court has received briefs, including from the Libertarian-leaning CATO Institute, describing ways to streamline any potential refund, pointing to examples of the US government providing blanket refunds to direct importers in the past.

It’s unclear if the Supreme Court would look for ways to reimburse consumers who may have faced price hikes.

Since Trump rolled out the IEEPA tariffs and Sept. 30, Uncle Sam has taken in $90 billion worth of revenue from those specific duties, according to data from the US Customs and Border Patrol. There was a total of about $195 billion in tariffs during that time, including pre-existing ones and duties Trump imposed from his other authorities.

Those concerns come despite Trump notching a roughly 90% win rate before the Supreme Court, largely on the shadow docket, according to a Court Accountability study.

Unlike the shadow docket, which deals with temporary rules, the tariff issue is a merits case.