The Supreme Court is set to review President Trump’s extensive tariffs on Wednesday, a pivotal moment for what many see as his key economic strategy.
The central issue at hand is whether Trump can invoke emergency powers to implement these tariffs on a global scale, as he aims to reshape international trade and assert his executive authority.
A previous ruling from 50 years ago concerning Trump’s remarks about tariff policy might play a role in the court’s considerations.
Impact of Nixon Tariffs
Trump has largely based his tariff policy on the International Emergency Economic Powers Act (IEEPA), which allows the president to regulate imports in response to specific emergencies.
However, small business representatives and states led by Democrats will argue that when IEEPA was enacted in 1977, Congress did not intend for it to include tariffs under “regulations.”
This will be a unique case as the Supreme Court has never before addressed this issue. Historically, no president prior to Trump has utilized this particular law to impose tariffs. The justices’ ruling might hinge on their interpretation of appellate decisions stemming from the Nixon era.
In August 1971, Nixon temporarily set a 10 percent tariff, relying on a legal principle similar to IEEPA’s predecessor. In his announcement, he noted it was meant to protect American products from unfair exchange rates, with the intention to remove the tariffs once the unfair practices ceased.
The Court of Appeals upheld Nixon’s stance in United States v. Yoshida International, Inc., and references to this case are likely to emerge during the arguments on Wednesday.
Attorney General D. John Sauer will advocate for the Trump administration, asserting that Congress was aware of the Yoshida ruling when crafting IEEPA and thus would have permitted tariffs as “regulations.”
Opponents will maintain that the Yoshida decision does not grant the president the authority to impose tariffs to the extent that Trump has.
“Permanent” Problems, “Emergency” or Both
Even if IEEPA does authorize tariffs, it would only apply in response to a declared national emergency that poses an unusual threat. Trump has cited two such circumstances.
He pointed to the surge of fentanyl as a reason for levies on Canada, China, and Mexico starting back in February. Then, in April, during his announcement about “Emancipation Day,” he declared a national emergency regarding the trade deficit, prompting a sweeping series of tariffs.
Critics argue that these situations do not constitute a legitimate emergency.
Some legal representatives of the challengers suggest that focusing on the trade deficit emergency feels tenuous since Trump himself noted that it’s been “persistent” for decades. This phrasing appears repeatedly in his directive.
On the other hand, Trump’s team argues that the trade deficit has now reached a critical point that threatens U.S. supply chains, undermining America’s manufacturing base and increasing reliance on foreign rivals.
However, Sauer contends that the court may not even need to assess this issue, since it typically does not weigh the president’s declarations of emergencies.
Key Question Principles
If the Supreme Court agrees with the challengers that the emergency and regulatory terms do not support Trump’s significant actions, it could lead to a reversal of the tariffs.
Should they disagree, there’s a backup plan for the challengers.
A legal theory often cited in cases involving unilateral actions taken by recent Democratic presidents—like Biden and Obama—could complicate Trump’s case.
The “major issues doctrine” suggests that significant regulatory changes need clear Congressional authorization.
Small businesses contesting the global tariffs assert that this principle applies here too. They argue to the court that even if Trump’s interpretation of IEEPA were seen as reasonable, the regulations should meet a higher standard.
For instance, attorneys representing the educational toy company Learning Resources indicated that the language in IEEPA does not imply that Congress intended to grant the president unrestricted powers to impose duties.
They emphasize that the 1977 law avoids terms like “duty,” “surcharge,” or “tax.”
They also highlight that any ambiguity should be clarified by the “key questions” intrinsic to non-delegation principles, arguing that Congress didn’t mean to grant the executive branch unchecked taxing authority, especially on such a large scale.
A recent ruling from the United States Court of Appeals for the Federal Circuit noted that the administration’s stance on IEEPA violates this major questions doctrine. Previously, a lower court had declared any interpretation that would give unlimited customs authority to the president as unconstitutional.
Influence of External Groups
A variety of external organizations have been submitting friend-of-the-court briefs, creating a wave of commentary and support for the challengers.
The justices’ questions during arguments can hint at which concerns they find most pressing.
Judges have expressed that they sometimes can’t fully digest every brief. Judge Amy Coney Barrett illustrated this in her book, noting the mixed quality of submissions.
Over 40 of these briefs have been filed regarding this tariff case, most of which support the challengers. Notable supporters include economists like former Federal Reserve chairs Ben Bernanke and Janet Yellen, along with various small and medium businesses and advocacy groups.
A minor number of Trump supporters, including a couple of representatives—Darrell Issa (R-Calif.) and Brian Mast (R-Fla.)—have also filed supportive briefs.
Trump Isn’t Here, But Will That Be a Hindrance?
Trump and his legal team have not communicated any insights on the potential risks involved.
Warnings have been issued about the economic fallout, with Trump calling the situation one of the nation’s most critical moments.
He mentioned on social media that if they win, America could be more prosperous than ever, but if they lose, the country risks declining significantly.
Just last month, he considered attending the court discussions but ultimately opted against it, stating he didn’t want to divert attention away from the case.
This decision means he won’t be the first sitting president to attend oral arguments, a historical distinction he could have claimed, as noted by a historian from the Supreme Court Historical Society.
While Trump’s absence might remove some personal dynamic from the situation, Wednesday’s discussions represent a crucial confrontation between the Trump administration and a court currently leaning conservatively, including justices he nominated.
Trump’s cases have constituted a substantial portion of the Supreme Court’s agenda this year, with his administration frequently achieving favorable outcomes.
However, this time marks the first occasion the justices will tackle the merits of Trump’s broader second-term objectives.
