Supreme Court Hears IEEPA Tariff Challenge: A Test of Presidential Power
Yesterday, the Supreme Court heard three hours of oral argument in the most consequential trade case in years, a challenge to the President’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs on imported goods. Oral argument revealed that the Court appears skeptical of the President’s use of IEEPA to impose tariffs. The unusually long and probing session, which featured active questioning from nearly every Justice, signals how seriously the Court is weighing the limits of executive authority in trade.
The question before the Court could redefine the balance of power between the branches of government: Can a president impose tariffs under IEEPA, a statute originally designed for emergencies, not economic policy?
Background: How We Got Here
Since the start of President Trump’s second term in January 2025, tariffs have become a cornerstone of U.S. economic statecraft. But their legal foundation is under scrutiny.
Two consolidated cases; Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc,. challenge the legality of tariffs imposed through IEEPA, a law originally designed for emergency sanctions, not economic policy.
Both the Court of International Trade and the Court of Appeals for the Federal Circuit ruled earlier this year that the Trump administration’s current use of IEEPA exceeds presidential authority. The IEEPA tariffs subject to these cases were the tariffs imposed against Mexico, Canada, and China in response to the fentanyl and immigration emergencies, as well as the worldwide reciprocal tariffs. Although the lower courts ruled against these tariffs, they remain in effect while the rulings are on appeal at the Supreme Court. In an unusual move underscoring the stakes, the Supreme Court granted certiorari and expedited the hearing in this case, bringing the question directly to the justices.
On Nov. 5, the Court held a three-hour oral argument – nearly twice the usual time – reflecting both the constitutional weight and economic gravity of the issue.
The Government’s Case: Flexibility in a Crisis
The Administration argued that the power to “regulate importation” under IEEPA necessarily includes the power to impose tariffs, especially in times of declared emergency.
Its position rests on two pillars:
- Delegated but limited authority: The President may act only during emergencies and only in foreign-facing contexts, where courts traditionally defer to executive judgment.
- Constitutional restraint: The delegation, the Administration claims, does not breach either the nondelegation doctrine (which bars Congress from handing off its legislative powers) or the major questions doctrine (which requires clear congressional authorization for actions of vast economic significance).
Several justices appeared unconvinced. Justice Barrett pressed for examples where the term “regulate importation” has ever been used to impose tariffs, outside the government’s one reference. Justice Sotomayor challenged the idea that tariff authority could hide inside regulatory language, noting that Congress traditionally delegates revenue-raising powers explicitly. Justice Gorsuch tested the limits of deference, asking whether the executive could claim similar latitude in areas like war powers.
The government’s answer: IEEPA is not taxation; it is regulatory action, and in emergencies, the President must have tools commensurate with the threat.
The Plaintiffs’ Case: Power Without Boundaries
The challengers countered that IEEPA was never meant to create a tariff power. Tariffs, they argued, are taxes by another name, squarely within Congress’s – not the President’s – constitutional domain under Article I.
Allowing the President to both declare an emergency and levy tariffs without congressional constraint would, they said, collapse the separation of powers.
The Court tested their argument as well. Justice Thomas questioned whether their position would also bar longstanding executive tools like embargoes and quotas. Justice Kavanaugh worried about paralyzing the executive during genuine crises. Justice Alito noted that most emergency statutes are “open-ended by necessity,” trusting future presidents to act prudently.
The challengers replied that prudence is no substitute for limits, and that IEEPA’s lack of an “intelligible principle” makes it an unconstitutional delegation of legislative power.
At the Heart of the Debate
The question before the Court is as old as the Republic: Where does Congress’s power end and the President’s begin?
IEEPA’s drafters envisioned a law for freezing assets or halting trade during war or crisis, not as a standing license for economic intervention. Yet, by declaring a “national emergency,” the President can now reshape trade flows affecting trillions in commerce. In drafting so broadly, Congress may have armed the presidency with powers it never meant to surrender.
A High-Stakes Tug of War
For business leaders, the outcome will determine whether IEEPA tariffs survive or collapse, and whether other emergency-based trade actions, from reciprocal tariffs to sanctions on strategic goods, stand on firm legal ground.
If the Court strikes down the use of IEEPA for tariff-making, the decision could invalidate hundreds of active tariff lines, potentially forcing massive reimbursement claims and resetting global trade relations.
If the Court upholds the government’s position, the President’s economic powers would expand dramatically, giving future administrations an even freer hand to weaponize tariffs in foreign policy.
Either way, the Court’s ruling will redefine how America wields its economic might, and who controls the levers.
What’s Next
A decision is expected in early 2026, though it could arrive as late as June. Until then, the tariffs remain in force, leaving importers, exporters, and global partners navigating a regime built on a question mark.
For businesses, now is the time to assess supply-chain exposure, prepare for either outcome, and stay closely attuned to developments in this landmark case.
Oral argument audio and transcript available here.
Clark Hill’s International Trade team will continue to monitor the case and its implications for global commerce and executive power.
For questions, please contact:
- Mark Ludwikowski (mludwikowski@clarkhill.com; 202-640-6680)
- Kevin Williams (kwilliams@clarkhill.com; 312-985-5907)
- Aristeo Lopez (alopez@clarkhill.com; 202-552-2366)
- Kelsey Christensen (kchristensen@clarkhill.com; 202-640-6670)
- Laura M. Quesada (Lquesada@clarkhill.com; 202-240-0170)
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