The Justice Department under President Trump is trying to convince the Supreme Court that what they refer to as “regulatory tariffs” actually exist.
They defend Trump’s use of the International Emergency Economic Powers Act, arguing that the president was focused on regulating imports instead of collecting revenue through high tariffs.
This stance is a bit tricky, especially when you consider what the administration has previously claimed.
Trump and his team have often highlighted the revenue generated from customs duties. In fact, they suggested that they could replace some federal taxes with what they described as “trillions of dollars” raised through tariffs. They even warned the Supreme Court against overturning these tariffs, claiming the U.S. would be in serious trouble without that revenue.
Legally, it makes sense why Trump’s lawyers are trying to recast tariffs in this way. By shifting the terminology, they hope to bolster the argument for increasing tariffs. The statutory text allows for the regulation or prohibition of transactions during a national emergency.
However, tariffs are fundamentally taxes. Customs duties are assessed on U.S. importers, and the funds go directly to the U.S. Treasury. Even if a tariff is justified for policy reasons, it’s still a tax, impacting prices, generating revenue, and altering consumer behavior. There’s really no clear distinction between tariffs that raise revenue and those that simply regulate.
This is something the government is well aware of, especially given the evidence from Trump’s tariffs in 2018, which indicated that U.S. businesses and consumers bore both the legal and economic burdens. Early findings concerning tariffs from 2025 suggest this holds true today as well.
Indeed, Congress historically sees tariffs as a tax, not a regulatory tool. Article 1 of the Constitution grants Congress, not the president, the authority to levy taxes, duties, and excises. When Congress wants the president to act on trade, they pass laws with explicit limitations.
The International Emergency Economic Powers Act was designed to manage financial flows—not goods. Its language mainly covers foreign exchanges and credit, not duties on imports.
Claiming that Trump’s tariffs are regulatory rather than revenue-driven is a distinction without real significance. It’s akin to saying a gas tax isn’t a tax just because it aims to reduce driving. Ultimately, intent doesn’t change the nature of the tax.
This is why governments differentiate between sanctions and tariffs. The former are regulations intended to alter behavior, whereas customs duties are simply collected and placed in federal treasuries.
The constitutional implications of this debate are substantial. If the Justice Department’s argument stands, any president could impose new taxes merely by labeling them as regulations—like a “regulated income tax” to address inequality or a “special fuel surcharge” for climate initiatives.
If that happens, the constitutional barrier between executive and legislative powers is at risk of collapsing.
Any tariff imposed under the International Emergency Economic Powers Act undermines Congress’s constitutional authority. The Supreme Court should recognize the government’s attempts to redefine unconstitutional taxes as regulations.
In the end, tariffs are taxes—there’s no middle ground here—and the Constitution gives Congress the exclusive power to enact them.
