Supreme Court to deliberate Trump’s reciprocal tariffs

NEW YORK

The Supreme Court will hear arguments Wednesday to decide whether US President Donald Trump exceeded authority granted under the International Emergency Economic Powers Act (IEEPA) in his reciprocal tariffs.

Trump leveraged tariffs to set trade policy after returning to office in January. He placed tariffs on Canada, Mexico and China due to alleged fentanyl and undocumented migration.

The president unveiled his sweeping reciprocal tariffs on April 2, his so-called “Liberation Day,” at a 10% baseline rate on all countries, which were to go into effect April 5. That sent shockwaves through the global markets.

Some delays came between the implementation of the tariffs, and the US negotiated with China and other major trading partners to determine appropriate tariffs. At the end of July, the US’ tariffs ranged from 10% to 41% on around 70 trading partners.

Trump raised tariffs on Brazil from 10% to 50% due to an alleged threat to national security and foreign policy, while raising India’s tariff from 25% to 50% due to its continued oil purchases from Russia.

Steel, aluminum, cars, copper, lumber and furniture are also included in Trump’s tariffs.

As of September, which marked the end of the fiscal year, the US generated revenues of $195 billion from tariffs. From February – September, around $176 billion entered the Treasury Department from tariffs.

The US Court of International Trade oversaw cases by private companies and states on tariffs on goods. On May 28, the court ruled that the sweeping reciprocal tariffs violated the IIEPA by exceeding the presidential authority.

The ruling said the Constitution grants only Congress the authority to regulate trade and impose taxes, and decided to block the reciprocal tariffs.

“Is it purely a hatred of ‘TRUMP?’ What other reason could it be,” Trump wrote on his Truth Social platform in response to the ruling.

But the US Court of Appeals for the Federal Circuit temporarily suspended the ruling. The court largely upheld the previous decision but rejected the immediate cancellation of tariffs, giving the Trump administration time to appeal to the Supreme Court.

The top court accepted the Trump administration’s appeal on Sept. 9.

Those opposing the tariffs argue that interpreting the IEEPA’s authority to regulate imports in emergencies as allowing the president to impose unilateral tariffs at a global scale raises constitutional issues; however, the Trump admin argues that reciprocal tariffs were fully compliant with the law.

If the court rejects Trump’s argument, the president will not be able to leverage IEEPA for future tariffs.

It is likely that other lawsuits will follow to find out whether the current tariffs can be withdrawn and the revenue generated will be refunded, if Trump’s arguments are shut down.

But even if the Supreme Court rules against Trump, tariffs on steel, aluminum and automotive sectors under regulations other than the IEEPA will remain in effect, while some tariffs on China imposed under unfair trade practices may be left untouched.

The Trump administration is expected to turn to other legal avenues, such as other legislation regulating trade, if the court rules that the president exceeded his authority.

Experts said the Supreme Court ruling will be a turning point in determining Trump’s room for maneuvering in economic policies. The decision will directly affect the limits of the president’s emergency powers and the future of billions of dollars in tariff revenues. Experts believe Washington could undergo a serious restructuring in its trade policies if the court rules against it.

Trump called the case “one of the most important in the History of the Country,” in a post on Truth Social. “If we lose, our Country could be reduced to almost Third World status – Pray to God that that doesn’t happen!”

Treasury Secretary Scott Bessent previously said that the delay in the Supreme Court’s decision on tariffs would give rise to economic risk, while the refund of tariff revenue could cause a significant disruption.

Bessent said Tuesday that the administration has alternative routes for tariff policy if the Supreme Court ruled against Trump.

White House spokesperson Karoline Leavitt said the administration prepared a Plan B, while remaining optimistic that the top court will rule in favor of Trump.

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