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On November 5, 2025, the U.S. Supreme Court heard <a href="https://www.youtube.com/watch?v=LXhzp0omPe0">oral arguments</a> in a high-profile consolidated appeal challenging whether President Donald Trump lawfully invoked the International Emergency Economic Powers Act (&ldquo;IEEPA&rdquo;) to impose tariffs.&nbsp; The cases challenge two sets of tariffs Trump implemented earlier this year: (1) tariffs against Canada, China, and Mexico in response to alleged inaction on illegal fentanyl trafficking (see <a href="https://www.thompsonhinesmartrade.com/2025/02/president-trump-initiates-tariffs-on-canada-mexico-and-china-under-the-ieepa-tariffs-on-mexico-and-canada-suspended-until-march-1-but-tariffs-on-china-start-february-4/">Update of February 3, 2025</a>); and (2) sweeping &ldquo;reciprocal&rdquo; tariffs targeting nearly all major U.S. trading partners to address persistent trade-in-goods deficits (see <a href="https://www.thompsonhinesmartrade.com/2025/04/trump-announces-reciprocal-tariffs-on-over-60-countries/">Update of April 3, 2025</a>).
Since their implementation, both sets of tariffs have faced delays, exemptions, and renegotiations, with several countries reaching bilateral deals to mitigate their effects, especially the reciprocal tariff regime.
Although it remains unclear when the Court will issue its ruling, the Justices granted expedited review of the consolidated appeal in September, suggesting a decision will arrive soon&mdash;well before the end of the Court&rsquo;s term in June 2026.
A Skeptical Bench Questions the Government&rsquo;s Position
While the outcome remains uncertain, the Justices&rsquo; questioning reflected broad skepticism toward the Government&rsquo;s position that IEEPA authorizes tariffs.&nbsp; Generally, the Court&rsquo;s inquiries coalesced around three main themes: statutory text, separation of powers, and institutional limits.
The Textual Question: Does a Plain Reading of IEEPA Authorize Tariffs?
The first line of questioning focused on whether IEEPA&rsquo;s authorization to &ldquo;regulate...importation&rdquo; implicitly includes the power to impose tariffs.
Justice Elena Kagan observed that while IEEPA enumerates a variety of presidential actions, it does not explicitly allow for the imposition of tariffs, &ldquo;[s]o it has a lot of verbs.&nbsp; It has a lot of action that can be taken under this statute. It just doesn&rsquo;t have the one [the Government] want[s].&rdquo;&nbsp; Without this explicit delegation, Justice Ketanji Brown Jackson added, the word &ldquo;regulate&rdquo; risks becoming &ldquo;a big catch-all&rdquo; verb lacking substance.
In response, U.S. Solicitor General John Sauer, arguing on behalf of the Trump administration, countered that regulating importation encompassed tariff authority historically, citing President Richard Nixon&rsquo;s temporary tariffs under IEEPA&rsquo;s predecessor statute in the early 1970s.&nbsp; Justice Brett Kavanaugh appeared somewhat receptive to this reply, calling that rebuttal &ldquo;a good example&rdquo; of a president relying on &ldquo;regulate...importation&rdquo; to impose tariffs.
Opposing counsel for the appellees, however, argued that &ldquo;every single delegation of...tariff power...from Congress to the President always has limits,&rdquo; and questioned why any president &ldquo;would look to all of the different tariff statutes in Title 19 [of the U.S. Code] if you can just IEEPA them all[?]&rdquo;
This textual dispute also prompted discussion of the relatively new Major Questions Doctrine, under which the Court requires the Executive Branch agencies to have a clear statement from Congress before acting on issues of vast economic and political significance.
The Separation-of-Powers Question: Are Tariffs Taxes?
The Justices also grappled with whether tariffs are, constitutionally, taxes&mdash;a power vested in Congress under Article I of the Constitution&mdash;and, if so, whether IEEPA is a valid delegation of that function to the President.&nbsp; In doing so, these exchanges underscored the importance of adhering to the Nondelegation Delegation: the principle that Congress may delegate some of its constitutional powers to the Executive Branch, but it must do so with clear terms and boundaries to avoid a wholesale abdication of its constitutional responsibilities.
On this point, some of the Justices revealed their views.&nbsp; &ldquo;It&rsquo;s a congressional power, not a presidential power, to tax,&rdquo; Justice Sonia Sotomayor said.&nbsp; Here, it seems the Government &ldquo;want[s] to say tariffs are not taxes, but that&rsquo;s exactly what they are.&nbsp; They&rsquo;re generating money from American citizens&mdash;revenue.&rdquo;
The Solicitor General, however, disputed this characterization, calling President Trump&rsquo;s actions &ldquo;regulatory tariffs, not revenue-raising tariffs,&rdquo; and argued that revenue generation was &ldquo;only incidental.&rdquo;&nbsp; The measures, he continued, are better understood as measures that fall within the President&rsquo;s Article II foreign affairs powers instead.
Opposing counsel for the appellees, Neal Katyal, disagreed.&nbsp; While acknowledging that tariffs &ldquo;have foreign policy implications, absolutely,&rdquo; he emphasized that the Solicitor General&rsquo;s focus on Article II was a distraction: &ldquo;There is still no Article II power [here] whatsoever.&nbsp; There is no citation in the Government&rsquo;s brief to any notion that the President has independence tariff authority under Article II.&rdquo;
The Balance-of-Powers Question: If IEEPA Authorizes Tariffs, Can Congress Reclaim This Power?
Several Justices raised concerns about the institutional consequences of allowing IEEPA to function as a workaround of the tariff statutes in Title 19.
&ldquo;You [the Government] have a claimed source in IEEPA that had never before been used to justify tariffs,&rdquo; Chief Justice John Roberts noted.&nbsp; &ldquo;No one has argued that it does until this, this particular case...And yet [the Government&rsquo;s] justification is being used [to claim] a power to impose tariffs on any product from any country...in any amount for any length of time.&rdquo;
Both Justices Amy Coney Barrett and Neil Gorsuch appeared to share the Chief Justice&rsquo;s concern.&nbsp; Under the current statutory framework, Justice Gorsuch observed, Congress could rescind tariffs imposed under IEEPA by terminating the underlying national emergency that justified their imposition.&nbsp; In practice, however, doing so would likely require a veto-proof majority, since a President is unlikely to approve a measure that curtails Executive authority.&nbsp; As Justice Gorsuch put it, &ldquo;Congress, as a practical matter, can&rsquo;t get this power back once it&rsquo;s handed it over to the President.&rdquo;&nbsp; By contrast, Justice Kavanaugh expressed less alarm, suggesting that tariffs might actually reflect a &ldquo;calibrated response&rdquo; within IEEPA&rsquo;s broad grant of authority, noting that the statute permits the President to adopt far more restrictive trade measures.
Possible Alternatives for the Trump Administration if the Supreme Court Strikes Down IEEPA
If the Supreme Court strikes down the IEEPA tariffs, the Trump administration is still likely to turn to other statutory authorities to preserve this central pillar of its economic and foreign policy agenda.&nbsp; President Trump has repeatedly underscored the importance of tariffs, recently describing them on <a href="https://truthsocial.com/@realDonaldTrump/posts/115493671705492320">social media</a> as a matter of &ldquo;literally, LIFE OR DEATH for our country.&rdquo;&nbsp;
For example, the President could invoke Section 122 of the Trade Act of 1974, which permits tariffs to deal with trade deficits, but only up to 15% for 150 days. &nbsp;Notably, Section 122 does not require an investigation prior to the imposition of tariffs.&nbsp;&nbsp;
Similarly, President Trump could rely on Section 338 of the Tariff Act of 1930, which allows tariffs of up to 50% against countries engaging in discriminatory trade practices, also without a prior investigation.&nbsp; In fact, Justice Samuel Alito referenced this potential workaround during oral arguments, asking: &ldquo;What if the President tomorrow were to say, I&rsquo;m reissuing these executive orders and invoking Section 338 [now]? [Shouldn&rsquo;t we] address that now and get it over with rather than having this continue for who knows how long while it goes through the procedures in the lower courts?&rdquo;
Because neither Section 122 nor Section 338 has been used before, their practical operation remains uncertain.&nbsp; Nonetheless, in September, Treasury Secretary Scott Bessent <a href="https://www.reuters.com/legal/government/bessent-expects-supreme-court-uphold-legality-trumps-tariffs-eyes-plan-b-2025-09-01/">confirmed</a> that Section 338 was under active consideration as a &ldquo;Plan B&rdquo; should the Supreme Court invalidate the IEEPA tariffs.
What Comes Next
If tradition holds, the nine Justices will meet in conference on November 7, 2025, to take a preliminary vote on the case.&nbsp; After that, the opinion-drafting process will begin, likely taking several weeks&mdash;or even months.
Much can change between oral arguments and the Court&rsquo;s final decision; for now, however, it appears that the Court&rsquo;s liberal bloc&mdash;Justices Sotomayor, Kagan, and Jackson&mdash;are poised to strike down the tariffs.&nbsp; Given the reservations they expressed, it seems Justices Barrett and Gorsuch may join them, and perhaps Chief Justice Roberts also.
Regardless, the Supreme Court&rsquo;s final decision will not affect any existing tariffs implemented by President Trump under Section 301 of the Trade Act of 1974 and under Section 232 of the Trade Adjustment Act of 1962. Those tariffs remain in full effect and should continue to be paid and managed.
Background on the Cases
The consolidated appeal arises from two cases: Trump v. V.O.S. Selections, Inc. (Case No. 25-250), a challenge originally brought by various small businesses and 12 U.S. states that had been consolidated at the federal district court level, and Learning Resources, Inc. v. Trump (Case No. 24-1287), filed by an Illinois-based toy company.&nbsp; The Trump administration is seeking the Supreme Court to reverse both decisions.
Previously, a unanimous three-judge panel of the U.S. Court of International Trade ruled in favor of the consolidated V.O.S. plaintiffs on May 28, 2025 (see <a href="https://www.thompsonhinesmartrade.com/2025/05/after-cit-blocks-president-trumps-ieepa-tariffs-cafc-stays-order-pending-review-of-the-cits-judgment-and-injunction/">Update of May 29, 2025</a>).&nbsp; That ruling was largely upheld by the U.S. Court of Appeals for the Federal Circuit, sitting en banc, on August 29, 2025, in a 7&ndash;4 decision (see <a href="https://www.thompsonhinesmartrade.com/2025/09/federal-circuit-rules-that-trafficking-and-reciprocal-tariffs-violate-ieepa/">Update of September 2, 2025</a>).
Separately, a judge in the U.S. District Court for the District of Columbia ruled in favor of the Learning Resources plaintiff on May 29, 2025 (see <a href="https://www.thompsonhinesmartrade.com/2025/05/second-federal-court-determines-ieepa-tariffs-likely-invalid/">Update of May 29, 2025</a>).&nbsp; The Department of Justice appealed that ruling to the U.S. Court of Appeals for the D.C. Circuit, but the Supreme Court accepted the plaintiff&rsquo;s petition for review before judgment shortly after the Federal Circuit&rsquo;s V.O.S. decision, consolidating the two cases for expedited review in the process (see <a href="https://www.thompsonhinesmartrade.com/2025/09/u-s-supreme-court-to-review-the-legality-of-trump-administrations-ieepa-based-tariffs/">Update of September 9, 2025</a>).

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SmarTrade

Associate

Aaron C. Mandelbaum

Partner

David M. Schwartz

Samir D. Varma

Francesca M.S. Guerrero

Senior Legislative and Regulatory Policy Advisor

Scott E. Diamond

International Trade

Trump’s Emergency Tariffs Face Scrutiny—and Skepticism—at the Supreme Court