Justices on the Supreme Court have expressed notable skepticism regarding the sweeping tariffs enacted by President Donald Trump, in a case with potentially significant ramifications for his broader agenda and the global economic landscape.
Chief Justice John Roberts, along with Justices Amy Coney Barrett and Neil Gorsuch – all considered conservative members of the court – appeared unconvinced by the government’s justification for the import duties.
The nation’s highest court is currently considering a challenge brought forth by a coalition of small businesses and a group of states, who argue that the tariffs in question are unlawful, asserting that the power to impose what is effectively a tax resides solely with Congress.
However, certain conservative justices also signaled a degree of sympathy towards arguments presented by Trump’s legal representatives, who maintain that the president possesses broad authority in matters of foreign affairs, including trade and tariffs.
Should the government lose the case, it could be compelled to refund a portion of the billions of dollars collected through these tariffs, a scenario that Justice Barrett suggested could lead to a “complete mess.”
The Supreme Court, currently composed of a 6-3 conservative majority, typically requires several months to reach decisions on significant cases, although a resolution in this matter could potentially be expedited.
Even in the event of an unfavorable ruling against Trump, Treasury Secretary Scott Bessent has indicated that the administration would explore alternative legal avenues to maintain the tariffs.
Reflecting the intricate nature of the case, Wednesday’s hearing extended for nearly three hours, significantly exceeding the allotted time.
Chief Justice Roberts commented, “The justification is being used for power to impose tariffs on any product from any country in any amount, for any length of time.”
Justice Gorsuch questioned, if the court ruled in favor of Trump, “What would prohibit Congress from just abdicating all responsibility to regulate foreign commerce?”
He further stated that he was “struggling” to find sufficient grounds to support the arguments presented by US Solicitor General John Sauer.
The court’s three liberal justices also voiced concerns regarding whether federal law, and the US Constitution, grant the president the unilateral authority to establish tariff levels on foreign imports.
The case revolves around the International Emergency Economic Powers Act (IEEPA) of 1977, which Trump’s legal team argues empowers the president to impose tariffs. Despite the Constitution specifically assigning tariff authority to Congress, Trump has asserted that the legislature delegated “emergency” authority, allowing him to bypass established processes.
Sauer argued that the nation faced unique crises, described as “country-killing and not sustainable,” necessitating emergency action by the president. He cautioned that invalidating Trump’s tariff powers would expose the US to “ruthless trade retaliation” and lead to “ruinous economic and national security consequences.”
Trump initially invoked IEEPA in February to impose tariffs on goods from China, Mexico, and Canada, citing drug trafficking from these countries as an emergency.
He again deployed the act in April, ordering levies ranging from 10% to 50% on goods from nearly every country worldwide, asserting that the US trade deficit posed an “extraordinary and unusual threat.”
These tariffs were implemented in stages throughout the summer as the US pressured countries to negotiate “deals.”
Lawyers representing the challenging states and private groups have argued that while IEEPA granted the president power to regulate trade, it made no specific mention of “tariffs.”
Neil Katyal, representing the private businesses, argued that it was “implausible” that Congress “handed the president the power to overhaul the entire tariff system and the American economy in the process, allowing him to set and reset tariffs on any and every product from any and every country, at any and all times.”
He also questioned whether the issues cited by the White House, particularly the trade deficit, constituted the kind of emergencies envisioned by the law.
Justice Samuel Alito inquired, “Could a president under this provision impose a tariff to stave off war?”
Katyal responded that a president could impose an embargo or a quota, but that a revenue-raising tariff would be a step too far.
Sauer countered that presidents have broad powers over national security and foreign policy, which the challengers seek to infringe upon.
A crucial question is whether the court determines that Trump’s tariffs constitute a tax.
Several justices emphasized that the power to tax, to raise revenue, is explicitly granted to Congress in the Constitution.
Sauer replied that Trump’s tariffs serve to regulate trade and that any revenue generated is “only incidental.”
Trump himself has previously boasted about the billions of dollars generated by his tariffs and their essential contribution to federal government funding.
The justices devoted minimal attention to questions regarding refunds or the validity of the president’s emergency declarations, focusing instead on examining the text and history of IEEPA.
Sauer urged the justices to view tariffs as a natural extension of powers granted to the president under the law, rather than as a tax. “I can’t say it enough – it is a regulatory tariff, not a tax,” he stated.
This distinction appeared to present a challenge for many of the justices.
Justice Sonia Sotomayor asserted, “You want to say that tariffs are not taxes but that’s exactly what they are.”
Many justices appeared persuaded by arguments from the businesses and states that tariffs, as a tax paid by US businesses, were fundamentally different from the other powers addressed by the law.
However, this view was not unanimous.
Justice Brett Kavanaugh expressed reservations, suggesting that it lacked “common sense” to grant the president the power to completely block trade, but not impose a 1% tariff, thereby creating a gap.
Gutman responded, “It’s not a donut hole. It’s a different kind of pastry,” eliciting laughter from the audience.
Treasury Secretary Bessent, who attended the hearing, declined to comment when asked for his opinion. Commerce Secretary Howard Lutnick, also present, offered a thumbs-up.
The hearing drew a full audience, with members of the media relegated to overflow seating behind columns.
A ruling in Trump’s favor would overturn the findings of three lower courts that previously ruled against the administration.
Regardless of the outcome, the decision will impact an estimated $90 billion in import taxes already paid – approximately half of the tariff revenue collected by the US through September of this year, according to analysts at Wells Fargo.
Trump administration officials have warned that this sum could potentially reach $1 trillion if the court delays its ruling until June.
Should the government be required to reimburse such revenue, Katyal indicated that small businesses might receive refunds, while larger companies would be subject to “administrative procedures,” acknowledging that it would be a “very complicated thing.”
Press Secretary Karoline Leavett suggested that the administration was exploring alternative methods for imposing tariffs in the event of an unfavorable ruling from the Supreme Court.
“The White House is always preparing for Plan B,” she stated.
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