Supreme Court Justices Question Legality of Trump’s Tariffs

The legality of former President Donald Trump’s tariffs faced intense scrutiny as a majority of US Supreme Court justices expressed skepticism during a hearing on a significant case on November 7, 2023. This case could have far-reaching implications for Trump’s economic policies, potentially affecting billions of dollars in customs revenue and altering the balance of power between Congress and the presidency.

The justices are evaluating Trump’s invocation of emergency powers under the International Emergency Economic Powers Act (IEEPA) to impose tariffs on nearly all US trade partners. This includes specific levies targeting Mexico, Canada, and China over their roles in drug trafficking. Chief Justice John Roberts raised concerns, noting, “The statute doesn’t use the word tariffs,” which led to further questioning about whether Congress must explicitly authorize policies that have significant economic consequences.

Solicitor General John Sauer, representing the Trump administration, argued that the president has broad inherent powers to regulate foreign commerce, including the authority to impose tariffs. He maintained that Congress should confer significant powers on the president to manage international crises effectively. Justice Sonia Sotomayor, however, countered, emphasizing that the power to impose taxes, including tariffs, is fundamentally a congressional power. “You want to say tariffs are not taxes, but that’s exactly what they are,” she asserted.

One of the key points of contention was whether Congress can reclaim powers it has delegated to the presidency. Justice Neil Gorsuch, an appointee of Trump, raised the practical implications of such a delegation, suggesting that Congress might struggle to regain those powers once they are given to the executive branch.

Challenging the administration’s stance, attorney Neal Katyal, representing small businesses opposed to the tariffs, described the notion that Congress granted the president the authority to restructure the entire tariff system as “simply implausible.” The hearing did not address sector-specific tariffs imposed by Trump, such as those on steel and aluminum, which have also drawn criticism.

The Supreme Court’s decision, expected in the coming months, follows a lower court ruling in May 2023 that determined Trump had exceeded his authority. The former president has characterized this case as “one of the most important” in US history, warning of severe consequences if his tariffs are overturned. Although Trump did not attend the hearing, several high-ranking officials were present, including Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer.

Analysts at ING noted that the court has been cautious in overruling presidential decisions of this magnitude in recent years. Yet, they acknowledged that upholding Trump’s tariffs would significantly shift power from Congress to the presidency, further enhancing executive authority.

Numerous businesses, lawmakers, and former officials have submitted around 40 legal briefs opposing Trump’s global tariffs, with only a handful supporting his actions. While these tariffs have not led to widespread inflation, many companies, especially small businesses, report facing increased costs due to higher import tariffs. Legal experts indicate that should the Supreme Court find Trump’s tariffs unlawful, the government could still impose temporary tariffs of up to 15 percent for 150 days while exploring long-term solutions.

As the legal proceedings unfold, the implications for international trade and domestic economic policy remain uncertain.