The U.S. Supreme Court agreed on Tuesday to decide the legality of former President Donald Trump’s extensive global tariffs, setting up a major test of executive power in trade policy.
This case centers on whether Trump lawfully used the International Emergency Economic Powers Act (IEEPA) of 1977 to impose tariffs, a law historically aimed at emergency sanctions but never before used to levy tariffs.
The big picture: The Court took up the Justice Department’s appeal of a recent ruling by the U.S. Court of Appeals for the Federal Circuit, which ruled on August 29 that Trump exceeded his authority under IEEPA in imposing most of these tariffs.
- The tariffs remain in effect during the Supreme Court appeal.
- Oral arguments are scheduled for the first week of November 2025, with the justices placing the case on a fast track.
Driving the news: The Federal Circuit ruling was a 7-4 decision emphasizing that Congress has the constitutional authority to impose tariffs, not the president acting alone.
- The appeals court also invoked the “major questions” doctrine, stating that significant executive actions with broad economic and political implications require clear congressional authorization, which it found lacking here.
- The case arises from two main legal challenges: one by five small businesses (including a New York wine and spirits importer and a Pennsylvania sport fishing retailer) and another by 12 states – primarily Democratic-led – including Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon, and Vermont.
Go deeper: The Supreme Court also agreed to hear a related challenge by Learning Resources, a family-owned toy company impacted by the tariffs.
- Trump imposed these tariffs after returning to office in January 2025, citing trade deficits and concerns like illegal fentanyl trafficking, using IEEPA’s emergency provisions.
- The Justice Department argues these tariffs are authorized under IEEPA’s emergency powers allowing the president to “regulate” imports during a national emergency.
- The administration warns that invalidating these tariffs would expose the U.S. to retaliatory trade measures, potentially triggering economic catastrophe and forcing the rollback of renegotiated trade deals.
