The United States Supreme Court heard oral arguments on November 5 in consolidated cases challenging President Donald Trump’s authority to impose sweeping tariffs on imports from virtually every trading partner. The cases, Learning Resources Inc. v. Trump and Trump v. V.O.S. Selections Inc., examine whether the president exceeded constitutional limits by using emergency powers legislation to levy import duties.
American businesses have paid nearly 90 billion US dollars to cover the tariffs being challenged as of late September, according to US Customs and Border Patrol data. The Trump administration warned in legal filings that the Treasury Department could face refund obligations between 750 billion and one trillion dollars if the Supreme Court rules against the tariffs.
The tariffs fall into two categories. Trafficking tariffs target products from Canada, Mexico, and China based on claims these countries have not adequately prevented fentanyl flow into the United States. Worldwide or reciprocal tariffs impose a baseline 10 percent duty on virtually all countries, with higher rates ranging from 11 to 50 percent on dozens of nations.
Two lower courts and most judges on the US Court of Appeals for the Federal Circuit ruled that Trump did not have power under the International Emergency Economic Powers Act (IEEPA) to set tariffs, a constitutional authority granted to Congress. The 1977 legislation allows presidents to regulate international transactions during national emergencies but does not explicitly mention tariffs.
Trump’s legal team argues that IEEPA’s grant of authority to regulate importation inherently includes the power to impose tariffs. The administration contends that drug trafficking and later the US trade deficit constitute genuine emergencies requiring immediate presidential action. White House spokesman Kush Desai said the president acted lawfully by using tariff powers granted by Congress through IEEPA to address national emergencies and safeguard national security and the economy.
More than 200 Democratic lawmakers and one Republican senator submitted legal briefs supporting the argument that only Congress possesses constitutional authority to impose tariffs. California Attorney General Rob Bonta characterized the administration’s interpretation of IEEPA as mental gymnastics, arguing that Congress does not hide elephants in mouseholes and would have explicitly stated such extraordinary presidential authority if intended.
The economic consequences extend far beyond government revenue. Learning Resources, a US educational toy supplier, expects to pay approximately 14 million dollars in tariff costs this year, seven times more than in 2024. Chief Executive Officer Rick Woldenberg said the tariffs have thrown his business into unbelievable disruption, forcing operational changes and strategic adjustments.
Cooperative Coffees, a specialty coffee importer, has paid about 1.3 million dollars in tariffs since April. Bill Harris, representing the company, said they took an extra line of credit, increased prices, and absorbed lower profit margins. He described the situation as an energy drain unlike anything previously experienced, noting that even if the court rules tariffs illegal, refunds would not undo operational strain already caused.
The threat of instantly imposing higher tariffs has been a key tool Trump used to pressure countries into entering trade agreements. In exchange, trading partners have committed to increasing purchases of American goods and investments in American businesses while lowering tariffs on American exports. These agreements could face uncertainty if the Supreme Court constrains presidential tariff authority.
The European Union has delayed ratification of a recent trade agreement until the court’s decision becomes clear, reflecting international concern about negotiating with an administration whose core economic tool faces potential invalidation. Swiss chocolatier Daniel Bloch said the tariffs have cut deeply into profits, expressing hope that a court ruling against them would provide positive relief while remaining skeptical about complete resolution.
Trump characterized the case in national terms, warning that defeat would weaken his ability to negotiate trade agreements and undermine national security. He indicated he would not attend the hearing to avoid overshadowing the judicial process. The president said the case is not about him but about the country, adding that defeat would leave the United States in a financial mess.
Emily Kilcrease, a former US Trade Representative official and national security staffer now with the Center for a New American Security think tank, said Trump’s use of tariffs represents a broadscale attack on economies to incentivize foreign governments to change their posture. However, she assessed that the Supreme Court has a decent chance of siding with Trump because IEEPA grants the president broad, flexible emergency powers.
White House press secretary Karoline Leavitt said the Trump trade team is working on contingency plans should the high court rule against the administration. She stated they have backup plans but remain hopeful the Supreme Court will rule on the right side of the law and do what is right for the country. Modern presidents have used financial sanctions such as freezing assets or blocking trade rather than tariffs for foreign policy and national security aims.
The Supreme Court expanded scheduled time for oral arguments from the normal 60 minutes to 80 minutes, though proceedings will almost certainly last much longer. Three lawyers argued the consolidated cases: one from the Trump administration, Neal Katyal representing small businesses challenging the tariffs, and a lawyer representing states that joined the legal challenge. Katyal served as acting solicitor general during the Obama administration.
The case represents an important test of presidential power extending beyond trade policy. If the court rules that presidents cannot use IEEPA to impose tariffs, future administrations would need to rely on slower, more procedurally complex statutory mechanisms that provide Congress greater oversight. Trump retains the ability to impose tariffs under other laws regardless of how the Supreme Court rules, but none allow changing import duties with the speed and flexibility IEEPA has provided.
A final ruling will emerge only after months of legal review and deliberation by the justices. The courts have allowed challenged tariffs to remain in effect during litigation, meaning businesses continue paying duties while awaiting resolution. This approach prevents immediate economic disruption but also allows the sum of potential refunds to grow substantially if the Supreme Court ultimately finds the tariffs unlawful.
