We wanted to share an update on a major legal case affecting U.S. trade. The Supreme Court is reviewing whether tariffs imposed during the Trump administration on nearly all imports from most trading partners were legally authorized under the International Emergency Economic Powers Act (IEEPA). The Court will decide both whether the president has the authority to impose these tariffs and whether that authority is constitutional.
Background
IEEPA, enacted in 1977, gives the president limited authority to regulate international economic transactions during a national emergency involving an “unusual and extraordinary threat” originating outside the United States. Historically, it has been used to freeze foreign assets or restrict trade with sanctioned countries — not to impose broad tariffs.
Starting in 2018, President Trump declared national emergencies and imposed varying tariffs under IEEPA. These tariffs applied to nearly all imports from most trading partners. Several states — including Texas, Ohio, and Pennsylvania — and businesses challenged the legality of these tariffs.
Federal Circuit Ruling
The Court of International Trade ruled that IEEPA does not authorize these tariffs. The Federal Circuit affirmed this decision in July 2025, emphasizing that the statute’s authority to “regulate … importation” does not include the power to impose tariffs or taxes. The court also applied the major questions doctrine, which requires clear congressional authorization for significant economic measures.
However, the Federal Circuit vacated the Court of International Trade’s permanent injunction, meaning the IEEPA tariffs continue to be collected while the case is pending. This creates ongoing uncertainty for importers regarding potential refunds.
Supreme Court Review
The Supreme Court is considering two main questions: whether IEEPA legally authorized the tariffs and, if so, whether delegating that authority to the president is constitutional. The Court will examine arguments from both sides, including whether the law’s language allows the president to impose tariffs and whether such a broad use of emergency powers oversteps Congress’s authority to levy taxes. The ruling will determine not only the legality of the tariffs currently being collected but also set a precedent for how future presidents may use emergency economic powers in trade and national security matters. Timing for a ruling is uncertain and could come as late as June 2026.
Why This Matters
The Court’s decision will clarify the limits of presidential authority under emergency economic powers, influence U.S. trade policy, and affect businesses importing goods subject to these tariffs. It is important to note that the White House has stated that they are examining additional presidential authority to keep the tariffs in place if the Supreme Court rules against the administration.
We will continue to monitor developments and provide updates as the case progresses.