On Wednesday, local time, the U.S. Supreme Court held a hearing on the Trump administration's appeal to a lower court's tariff ruling. These tariffs, levied on imported goods, could generate trillions of dollars in revenue for the United States over the next decade.
US President Trump has been pressuring the Supreme Court to retain these tariffs—which he views as a key economic and foreign policy tool. The debate centers on whether the tariffs infringe on Congress's power and whether the major questions doctrine applies. This case is not only about the global economy but also a major test of President Trump's power.
Tariff Authorization
The hearing reportedly lasted nearly two and a half hours. Representing the government was Deputy Attorney General D. John Sauer of the U.S. Department of Justice, while two federal lawyers—Neal Katyal representing the corporation and Benjamin Gutman representing Oregon—appeared in court to defend the tariffs.
Trump is the first president to invoke the International Emergency Economic Powers Act (IEEPA) to impose tariffs, a law that allows the president to regulate business activities during a national emergency.
Saul stated that Trump believes the U.S. trade deficit has pushed the nation to the brink of economic and national security disaster. He pointed out that imposing tariffs helps Trump negotiate trade agreements, while abandoning these agreements would expose the U.S. to relentless trade retaliation from more aggressive countries, leading to a decline from a position of strength and triggering devastating economic and national security consequences.
The U.S. Constitution grants Congress (not the president) the power to tax and impose tariffs. Conservative Chief Justice John Roberts told Saul that taxing the American people "has always been a core power of Congress," adding that these tariffs appear to increase government revenue—a power the Constitution explicitly assigns to Congress.
Liberal Justice Elena Kagan stated that the power to tax and regulate foreign trade are generally considered to be the “core” powers of Congress, rather than the president’s.
The Trump administration argued that the International Emergency Economic Powers Act allows the president to respond to an emergency by “regulating” imported goods, therefore imposing tariffs was legal.
Conservative Justice Amy Coney Barrett then asked Saul whether the clause in the International Emergency Economic Powers Act that "grants the president the power to regulate imports in a state of emergency" covered the power to impose tariffs. "Can you point to other clauses in the law, or other historical cases, that demonstrate that the phrase 'regulate imports' has ever been used to grant the power to impose tariffs?"
Principles of Major Issues
The Supreme Court has used the "major issue doctrine" to overturn several key policies of Democratic President Joe Biden. This doctrine requires that the executive branch obtain explicit authorization from U.S. lawmakers before taking any action with significant economic and political implications.
When a lower court previously ruled against Trump, it pointed out that, according to this principle, the imposition of these tariffs was not legal.
Roberts asked Saul, “The right (of the government) claims is to impose tariffs on any product from any country, in any amount, indefinitely. I’m not denying that such a power may exist, but it clearly falls under the category of ‘significant powers,’ and the grounds for claiming this power don’t seem to match. So why doesn’t the ‘significant question principle’ apply?”
Saul argued that Trump's imposition of tariffs did not violate the Supreme Court's "major issues doctrine," which does not apply to foreign affairs.
Roberts then raised the question: Can the president's power in this area supersede the inherent power of Congress? "(Tariffs) are essentially taxes on the American people, and this has always been a core power of Congress."
The Supreme Court has long shown respect for the president's handling of foreign policy. Roberts asked Katieal, "Admittedly, tariffs are a tax, and fall under the core power of Congress, but these tariffs are 'taxes levied on foreign countries,' right? And foreign affairs are the core power of the executive branch. Trump's tariffs undoubtedly give him leverage in negotiating foreign trade agreements."
Kathial responded that the president's emergency powers are not unlimited, and the public needs to be clearly aware of the boundaries of these powers.
Liberal Justice Ketanji Brown Jackson argued that the International Emergency Economic Powers Act was intended to limit, not expand, presidential power. "It is clear that Congress intended to constrain the president's emergency powers at the time."
What was the result?
This year, the Supreme Court has ruled in favor of Trump in several cases. Normally, the Supreme Court takes several months to issue a ruling after a hearing, but the Trump administration has asked the court to expedite the process in this case, with some media outlets predicting a result could be reached before the end of the year.
While liberal justices generally questioned the legality of the tariffs, some conservative justices indicated they were debating how to view the inherent powers the president possesses in handling foreign affairs. Conservative Justice Brett Kavanaugh showed potential support for Trump, pointing to the example of former President Richard Nixon imposing global tariffs in the 1970s under a precursor to the International Emergency Economic Powers Act, which contained similar wording regarding "regulating imports."
Conservative Justice Barrett argued that if Trump's tariffs are ultimately ruled illegal, it will have a series of consequences—for example, the courts would have to refund tariffs to U.S. importers who have already paid them, a process that could be "a mess." According to the latest data released by U.S. Customs and Border Protection, tariffs imposed under the International Emergency Economic Powers Act from February 4 to September 23 have generated approximately $89 billion in revenue.
This could mean that there is serious disagreement within the Supreme Court regarding the outcome of the case, with conservative justices currently holding a 6-3 majority.
It's worth noting that after the hearing, the probability of contracts related to "the Supreme Court ruling in favor of Trump's tariffs" on the prediction market platform Kalshi has dropped from nearly 50% before Wednesday's hearing to about 30%. A similar probability on another platform, Polymarket, has also fallen from over 40% earlier this week to about 30%—a change reflecting traders' growing belief that the justices may overturn the tariff policy.
However, U.S. Treasury Secretary Scott Bessent stated before the trial that even if the Supreme Court rules that Trump's use of the International Emergency Economic Powers Act to impose tariffs is illegal, these tariffs are expected to remain in place because the government will turn to other legal grounds to support its tariff policy.
(Article source: CBN)
