"Most important case ever": Supreme Court to decide fate of Trump's tariffs
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President Trump holding up a list of tariffs. Photo: Chip Somodevilla/Getty Images
The Supreme Court will hear a case on Wednesday that will decide the fate of President Trump's signature economic policy, the tariffs he has leveraged to reshape the global order.
Why it matters: It is the latest instance of the high court deciding the fate of Trump's agenda, but this time with consequences that transcend the containers full of toys and electronics at the nation's ports.
- "The stakes of this case reach far beyond trade policy," Elizabeth Goitein, a senior director at the Brennan Center, a nonpartisan policy institute, wrote in a blog post.
- The "decision could shape whether the use of emergency powers to bypass Congress becomes a tool of routine governance."
The big picture: Trump calls the suit "[t]he most important case ever."
- A loss could hugely curb his powers in imposing tariffs.
- It could set off a potentially chaotic tariff refund process, result in a loss of revenue that has somewhat brightened the nation's fiscal outlook, and possibly undermine key trade deals.
Catch up quick: The lion's share of Trump's global tariffs were imposed under the International Emergency Economic Powers Act.
- At issue is whether the 50-year-old law, which has never before been used to impose import taxes, justifies the levies.
- An appellate court struck down the tariffs in August. How judges ruled then reveal the complexity of what might come next.
- The majority said Trump's IEEPA tariffs were illegal, but for different reasons. Four said that the law doesn't authorize tariffs, while three others said only that the tariffs in question could not be imposed under the law.
- The dissenting group, which included two Obama-appointed judges, said IEEPA does extend tariff power to the president.
What they're saying: "This is a major confrontation between the executive branch and Congress," says Michael McConnell, a former appellate judge appointed by the latter President Bush, who is among the lawyers representing the group suing Trump.
- "It is practically what the American Revolution was fought over: the principle that taxation is not legitimate unless it is adopted by the representatives of the people," McConnell says.
- Neal Katyal, who served as the acting solicitor general in the Obama administration, will argue the case before the Supreme Court next week — the result of a literal coin flip.
The other side: Department of Justice lawyers have argued, at least in part, that the courts should not question what Trump says constitutes a national emergency.
- In July, the lawyers said the trade deficit had "reached a tipping point" and the tariffs give the "president leverage to address the emergency."
"Imagine if someone had held their hand up in 2006, 2007 and said 'we're on the verge of a housing crisis,'" Treasury Secretary Scott Bessent told Fox News on Sunday.
- "Well, President Trump raised his hand and said, 'We are on the verge of a ... trade crisis, and I'm going to use IEEPA.' That is what emergency powers are for," Bessent said.
The bottom line: Trump claims the nation will fall into ruin if IEEPA tariffs are struck down — even as the White House says it will replace the levies using other, more process-heavy trade laws.
- But that would all but destroy the Oval Office "tariff switch" — the ability to impose tariffs quickly without much notice.
