WASHINGTON — President Donald Trump’s signature economic policy comes under Supreme Court scrutiny Wednesday as the justices weigh whether he has the authority to impose sweeping tariffs on imports under a law designed for use during a national emergency.
The Supreme Court has a 6-3 conservative majority that has regularly backed Trump on various contentious cases since he took office in January, but many legal observers think the tariffs dispute is a close call.
The consequences are huge for Trump and the economy at large, with Americans increasingly anxious amid signs that the tariffs are contributing to, rather than alleviating, higher costs.
A new NBC News poll found that 63% of registered voters believe Trump is failing to live up to expectations on the economy, after he ran on lowering prices, in part, through tariffs. Other recent polls show a majority of Americans oppose the tariffs, which disproportionately burden small businesses.
The legal question is whether a 1977 law called the International Emergency Economic Powers Act, or IEEPA, which allows the president to regulate imports when there is an emergency, extends to the power to impose global tariffs of unspecified duration and breadth.
The Constitution states that the power to set tariffs is assigned to Congress. IEEPA, which does not specifically mention tariffs, says the president can “regulate” imports and exports when he deems there to be an emergency, which occurs when there is an “unusual and extraordinary threat” to the nation.
Until Trump began his second term in January, no president had ever used the law to tariff imports. Lower courts ruled against the Trump administration, with both sides asking the Supreme Court to issue a definitive ruling.
Trump has made clear how important this case is to him and his economic plan, repeatedly warning of drastic consequences if the court strikes down his tariffs. He had even suggested he would go in person to Wednesday’s oral arguments, becoming the first president to do so. He later backed off that idea, but Treasury Secretary Scott Bessent has said he plans to attend.
“If a President was not able to quickly and nimbly use the power of Tariffs, we would be defenseless, leading perhaps even to the ruination of our Nation,” Trump said in a characteristic Truth Social post Sunday.
But even if he were to lose at the Supreme Court, Trump has levied other tariffs under different laws that would survive. And his administration has been looking at other ways of imposing tariffs, although those methods are more limited.
The court is hearing the case on an expedited basis, meaning a ruling could be issued in short order. It has consolidated two underlying challenges brought by small businesses and a coalition of states.
V.O.S. Selections Inc., a wine and spirits importer, Plastic Services and Products, a pipe and fittings company, and two companies that sell educational toys are among the businesses that sued.
The high-stakes case puts the spotlight on a court that was skeptical of President Joe Biden’s unilateral use of executive power, including his attempt to forgive billions of dollars in student loan debt. The court blocked that proposal, citing what has been called the “major questions doctrine.”
Under that theory, embraced by the conservative majority in recent years, a president cannot impose a broad policy with huge impacts on society and the economy unless Congress passes a law that specifically allows for it.
The challengers said in court papers that the justices do not even need to reach the “major questions” question, noting that the text of IEEPA does not grant any power to impose tariffs.
They pointed out that other laws, including the Trade Act, specifically grant the president the authority to levy tariffs in some form.
Even if Trump could, in theory, use IEEPA for tariffs, there is no emergency that would warrant invoking it now, they added.
Solicitor General D. John Sauer, representing the Trump administration, argued in his brief that the law is written in such a way to give broad powers to the president, including over tariffs.
The tariffs are necessary because of “country-killing trade deficits,” he added, echoing Trump’s dire language.
The cases concern two sets of tariffs. One is country-by-country or “reciprocal” tariffs, which range from 34% for China to a 10% baseline for the rest of the world. The other is a 25% tariff Trump imposed on some goods from Canada, China and Mexico for what the administration said was their failure to curb the flow of fentanyl.
Other tariffs implemented using different legal authorities, such as 50% steel and aluminum tariffs on all other worldwide trading partners, are not at issue in the case before the court.
As of the end of August, IEEPA tariffs had raised about $89 billion, according to the latest data available from U.S. Customs and Border Protection. If the Supreme Court overturns those tariffs, the government would then face demands from businesses that it pay back that revenue.
