The U.S. Supreme Court will hear oral arguments on Wednesday in what President Donald Trump has called the “most important subject discussed by the Supreme Court in a hundred years.”
The issue at hand is tariffs.
In the beginning months of Trump’s second presidential term, he implemented unprecedented tariffs using the International Emergency Economic Powers Act (IEEPA).
On April 2, dubbed “Liberation Day” by the White House, Trump promised the U.S. a future of “economic independence” from foreign powers by “instituting reciprocal tariffs on countries throughout the world.”
And so tariffs were instituted.
“These included a 20% ‘trafficking’ tariff and additional ‘reciprocal’ tariffs that pushed rates on Chinese goods to over 145%,” per the plaintiffs in the case . “Petitioners’ imports were directly affected, and complying with the new tariffs would increase their import-related costs from $2.3 million in 2024 to over $100 million in 2025, putting their businesses at existential risk.”
Was Trump’s use of IEEPA legal?
Since its enactment in 1977, no president has used the emergency powers granted by IEEPA to impose tariffs.
The law does not mention tariffs, but it does permit the president, following an emergency declaration, to regulate the importation of “any property in which any foreign country or its nationals have an interest.”
On April 22, family-owned companies Learning Resources, Inc. and hand2mind, Inc., whose manufacturing is primarily outsourced to China, filed a lawsuit against the president in the U.S. District Court for the District of Columbia, calling his tariff actions an “extraordinary Executive Branch power grab.”
In their lawsuit, the petitioners argued that Trump lacked the authority under IEEPA to impose tariffs, specifically because he bypassed congressional approval for his tariff plan, as the Constitution vests power over tariffs in Congress.
The defendants argued that the country needed an emergency declaration. In a filing, Trump’s legal team said the president had two reasons to determine this: To stop the transfer of fentanyl coming into the U.S. via China and to address the “large and persistent” trade deficits.
The district court granted a preliminary injunction in favor of the plaintiffs. However, the case was soon stayed. The U.S. Court of International Trade ruled similarly in related cases, but the U.S. Court of Appeals also stayed its decision pending appeal to the Federal Circuit in a 7-4 decision.
In his dissent, Richard Taranto, a U.S. circuit judge of the U.S. Court of Appeals for the Federal Circuit, argued IEEPA was established to give presidents leniency.
“We know of no persuasive basis for thinking that Congress wanted to deny the President use of the tariffing tool, a common regulatory tool, to address the threats covered by IEEPA,” Taranto, an Obama appointee, wrote. “There is every reason to understand ‘regulate’ to include, not exclude, such an ordinary tool of import regulation as tariffing.”