The Supreme Court heard oral arguments from the Trump administration to determine the president’s ability to impose sweeping tariffs without approval from Congress. Throughout the arguments, nearly every justice cast serious doubt on the president’s authority, with many points made by the federal government falling flat.
A tariff is a tax on goods entering one country from another, designed to raise the prices of certain foreign goods. Individuals or businesses in a foreign country directly pay the tariff, but the cost is usually partially or fully offloaded to domestic consumers. Because tariffs make up a fixed percentage of a sale, their impact disproportionately affects low-income individuals.
The Trump administration increased the effective U.S. tariff rate from 2.4% in January to 22.5% in April. Today, that rate remains elevated at 18% after numerous district courts have blocked select tariffs and the administration negotiated with foreign governments to suspend or lower rates. The effective tariff rate refers to the average rate fixed to any given import.
The White House imposed a minimum 10% tariff on every country. Notable rates include 20% for Chinese and 25% for Mexican products, 25% on all automobiles and 50% on steel and copper imports. While tariffs are expected to generate $2 trillion between 2026 and 2035, this revenue comes at a steep cost to consumers. For the next two years, price increases will reduce the average household’s after-tax income by $1,808. Tariffs will also slow real Gross Domestic Product growth by .4%, or $122 billion annually.
Historic tariffs have incited lawsuits to ask the Supreme Court whether the president can regulate foreign trade through sweeping tariffs without Congress’s approval. On Nov. 5, the Court heard oral arguments from the federal government and the Liberty Justice Center, a non-partisan, non-profit organization, to decide.
The federal government’s central argument rests on the International Emergency Economic Powers Act, which, among many things, gives the president authority to “regulate importation” in emergencies. In this case, the Trump administration declared a national emergency to close the nation’s $1.2 trillion trade deficit.
Most justices, including the conservative majority, appeared to doubt the federal government’s argument.
Chief Justice John Roberts appeared concerned that an affirmative ruling would allow the president “to impose tariffs on any product from any country for any amount for any length of time.” Roberts also questioned the precedent the federal government is relying on, with Justices Ketanji Brown Jackson, Brett Kavanaugh and Sonia Sotomayor joining.
The power to tax and the act’s structure took center stage. Justices Elana Kagan, Roberts, Jackson and Sotomayor argued that tariffs are a form of taxation, a power exclusively reserved for Congress.
“What [the IEEPA] doesn’t say is the President can raise revenue,” pressed Sotomayor. “There’s a lot of verbs [in the act], but none of them include ‘generating revenue’ as a side effect or directly.”
The Court further probed into the unique nature of the power Trump acquired through tariffing. Kagan pointed out how even congressional tariff powers are not allowed to exceed a certain percentage or are otherwise limited in time. In this case, Trump’s tariffs would have no limits because the IEEPA does not impose any. Justice Neil Gorsuch expressed his worries about the nature of emergency declarations, as well. Such a declaration would require a supermajority to overturn, meaning it could take two-thirds of Congress to repeal emergency tariffs.
The Court will not decide for many months, but either way, its choice will have major implications for the future of presidential power and Trump’s economic agenda.
