The Supreme Court’s Decision on Trump’s Tariffs Will Shape Presidential Economic Power

The Supreme Court is set to hear arguments on Wednesday about President Donald Trump’s use of tariffs. It won’t just be deciding the fate of his trade policy: The court’s ruling could redefine the limits of presidential economic power.

“This is huge,” said Bryan Riley, director of the National Taxpayers Union’s Free Trade Initiative. “It’s fundamentally a question of whether the Constitution even matters.”

“This case, if it goes the wrong way, will give this president and future presidents almost unchecked power over international transactions,” he added.

The court will hear a pair of cases, Learning Resources, Inc. v. Trump, and Trump v. V.O.S. Selections, to consider the legality of Trump’s tariffs, including his use of the International Emergency Economic Powers Act. Trump has used the law to trounce procedural norms and place exorbitant tariffs on enemies and trading partners alike, without authorization from Congress. Lower courts have already ruled against Trump.

The White House has projected confidence in its ability to win the case — press secretary Karoline Leavitt said officials believe the Supreme Court will rule in their favor. Still, contingency plans have long been in the works.

“The White House is always preparing for plan B,” she said at a briefing. “It would be imprudent of the president’s advisers not to prepare for such a situation. With that said, we are 100% confident in the president and his team’s legal argument and the merits of the law in this case, and we remain optimistic that the Supreme Court is going to do the right thing. The importance of this case cannot be overstated.”

Trump has used the threat of tariffs in matters far beyond trade. The administration used a tariff investigation to pressure Brazil over its decision to prosecute former President Jair Bolsonaro. Trump attempted to use trade negotiations to stop Canada from backing Palestinian statehood. The threat of steep tariffs has been an essential leverage point in his peace negotiations between countries like India and Pakistan, as well as Russia and Ukraine.

The Supreme Court’s decision could stymie all of this.

“This case is not just about President Trump,” Leavitt said. “It’s about the use of this emergency authorization for tariffs for future presidents and administrations to come.”

Administration officials have indicated that even if they lose the case, they would find another way to levy tariffs in the Trumpian fashion. The Supreme Court may partially rule against the Trump administration, or rule against Trump’s tariff practices in their entirety. In either situation, the White House has a myriad of options it could choose from to levy tariffs, though none are as powerful as the one the Supreme Court may deem unlawful.

There are multiple legal avenues to enact tariffs. Top Trump trade adviser Peter Navarro has signaled the administration was considering use of Section 122 and then Section 301 of the Trade Act of 1974, if use of the International Emergency Economic Powers Act is deemed unlawful.

Multiple trade experts NOTUS spoke to said this would be the most plausible course of action for Trump to keep his tariffs alive if the court rules against him.

Peter Harrell, who served as senior director for international economics and competitiveness in the Biden White House, said “the most obvious choice” for the White House to temporarily maintain tariffs would be to invoke Section 122. That would allow tariffs of up to 15% for as long as 150 days on countries whose trade with the U.S. is unjustifiably imbalanced.

“That, to me, looks like the sort of obvious, immediate stop gap they could pull to keep many of their tariffs in place for a couple of months while they figure out what the longer term plan is,” he said.

Section 301 of the trade act allows an administration to launch investigations into specific countries and implement tariffs based on the results of that investigation. There are already active Section 301 investigations into China, Brazil and Nicaragua; the latter two were started under the Biden administration. The Trump administration could begin more of them, but the investigations take months to complete and again open the administration up to the possibility of lawsuits.

Over the past few months, the Trump administration has expanded its use of Section 232 of the Trade Expansion Act of 1962 which allows him to put restrictions on the import of certain goods if they are found to threaten national security, after an investigation.

But none of these powers is as expansive as the International Economic Emergency Powers Act, which the Trump administration has used to enact crushing tariffs with the stroke of a pen.

The International Economic Emergency Powers Act “only requires a finding of a national emergency, which is a more unilateral power within the president to make that determination,” said Everett Eissenstat, a partner at Squire Patton Boggs who represented the Trump administration on international trade matters as deputy director of the National Economic Council during Trump’s first term. “There’s no investigation, there’s no congressional consultation, it’s just a declaration of emergency, and that unleashes the power to regulate commerce, regulate importation.”

He added that there “were certainly more limitations” on Section 301 and Section 232.

If the Supreme Court were to rule in the Trump administration’s favor, it’s possible that the ruling wouldn’t just give the administration the legal go-ahead on current tariff policy, but open the door for the International Economic Emergency Powers Act to be used even more broadly than Trump is currently using it.

For the importers, business owners, consumers and taxpayers who are impacted by the president’s trade and tariff policy, a decision from the Supreme Court in either direction is unlikely to offer significant relief from the pressures of the Trump tariff economy.

“Unfortunately, if you’re a business, you can celebrate a Supreme Court win if that’s the way it goes, but you’re not going to be off the hook,” Riley said. “Trump will continue to impose tariffs, continue to impose costs on Americans, but he just won’t have the unlimited authority that he’ll have if the Supreme Court allows the IEEPA tariffs to remain in place.”

The uncertainty surrounding the outcome of the case, how the Trump administration responds to the court’s decision , and Trump’s trade and tariff policy generally has made it difficult to plan ahead, said Jason Kenner, litigation practice leader at Sandler, Travis & Rosenberg, P.A., a law firm that specializes in international trade law.

“Every time you turn around, the tariffs are increasing, decreasing, pausing,” he said. “I think people are trying to be as proactive as they can, but I don’t think today’s trade environment really lends itself to a proactive approach.”

For its part, the Trump administration is painting the Supreme Court case as an existential issue.

“It will be, in my opinion, one of the most important and consequential decisions ever made by the United States Supreme Court,” Trump wrote on Truth Social Sunday. “If we win, we will be the richest, most secure country anywhere in the world, by far. If we lose, our country could be reduced to almost third world status.”

The Supreme Court has until the end of its term next year to make a decision on the matter, but many experts suspect they will rule sooner given the urgency of the matter, possibly as early as this year.

“Much of the president’s agenda has been built on the ability to use various statutes to impose tariffs and leverage negotiations,” Eissenstat said. “Even beyond that, depending on how the court rules, this could have significant effects. They’d be potentially redefining the boundaries of presidential power over international trade for many, many years. Well, really decades.”