The US Supreme Court is scheduled to hear arguments on Wednesday at 10am ET (local time) over the legality of sweeping tariffs imposed by Donald Trump – a case that could reshape the reach of presidential power and ripple through the global economy.The dispute centres on Trump’s invocation of the international emergency economic powers act (IEEPA) – a 1977 law meant for national emergencies – to levy tariffs on nearly every US trading partner. The administration contends the tariffs are justified as measures to protect national security and the economy. Lower courts, however, ruled he exceeded his authority.
If the Court strikes down the tariffs, the effect could extend far beyond US trade: the government collected an estimated $89 billion between February 4 and September 23 under these duties.
Legal groundwork & why the case matters
Lower courts found fault with the administration’s use of IEEPA: the US court of appeals for the federal circuit in Washington ruled in a 7-4 decision that Congress did not intend for IEEPA to grant the president unlimited tariff authority – noting that “none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax.” The administration argues that IEEPA authorises the president to “regulate commerce” in a national emergency – a reading which it says encompasses control of imports. But critics argue that imposing taxes or tariffs is a core power of Congress, not the executive. Given the potentially enormous economic impact (estimates of trillions of dollars over a decade), the court’s decision is widely seen as a precedent-setting test of separation of powers, executive authority, and US trade policy.
What the US government is saying & its Plan B
Top administration officials are treating the case as high-stakes. Treasury secretary Scott Bessent is attending the arguments in person, underscoring the importance.In public remarks, Bessent warned of “massive refund” obligations – in the range of $750 billion to $1 trillion – if the tariffs were struck down.Significantly, the administration has already signalled a fallback strategy: if the Court invalidates the IEEPA-based tariffs, the government can turn to other legal authorities to impose duties. As Bessent put it: “there are lots of other authorities that we can operate under.”Analysts say possible alternate legal routes include statutes such as the Tariff Act of 1930 (section 338) or provisions of the Trade Act of 1974, though these come with stricter limits and shorter durations.
Global trade implications
The tariffs being challenged were not minor – they targeted broad swaths of US imports from major trading partners. Some were justified by the administration as responses to the fentanyl crisis, chronic trade deficits, and other “unusual and extraordinary threats.” A ruling against the tariffs could introduce major uncertainty in global trade lines, prompting trading partners to question US commitments, negotiate harder, or rethink the stability of deals. Conversely, if the Court upholds the tariffs, it could embolden more aggressive US trade policy and shift global power dynamics in commerce.
