The Supreme Court is considering a case challenging President Donald Trump’s use of the 1977 International Emergency Economic Powers Act (IEEPA) to impose broad global tariffs. This ruling, if in favor of the challengers, would remove a key tool Trump has used to levy tariffs on countries he is displeased with on non-trade issues. Trump, marking the first president to utilize this statute for tariffs, declared a national emergency based on a $1.2-trillion U.S. goods trade deficit in 2024, despite the consistent trade deficits since 1975. The Supreme Court is expected to make a decision on the case, which was initiated by small business groups and certain states, in the near future.
The IEEPA grants the president authority to address threats to U.S. national security, foreign policy, or economy. While Treasury Secretary Scott Bessent anticipates the Supreme Court will uphold the IEEPA-based tariffs, alternative tariff authorities like Section 122 of the Trade Act of 1974 and Section 338 of the Tariff Act of 1930 could be employed if the current tariffs are struck down. Trump has also implemented tariffs under different provisions such as Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974.
Critics of Trump’s tariffs argue that the power to impose tariffs lies with Congress, not the president, and that such authority should be explicitly delegated and limited. The major questions doctrine, which requires significant executive actions to be clearly authorized by Congress, has been cited in opposition to the tariffs. The Supreme Court’s decision could have substantial implications on U.S. trade policies and financial markets, potentially disrupting the current tariff system and revenue streams.
Despite facing legal challenges, Trump’s administration has pursued tariffs as a means to address trade imbalances and negotiate better deals with trading partners. The outcome of the Supreme Court case will have lasting effects on U.S. trade policies and the administration’s approach to tariffs.
