What Happens If The Supreme Court Rules Against Trump Administration IEEPA Tariffs?

On November 5, the Supreme Court of the United States (SCOTUS) heard a challenge to President Donald Trump’s assertion of tariff authority under the International Emergency Economic Powers Act (IEEPA). As readers may recall, President Trump had used the IEEPA to impose:

• Tariffs on imports from China, Canada and Mexico, justified by ongoing fentanyl trafficking and illegal immigration from those countries; and
• Broadly applied reciprocal tariffs on imports from most countries, justified by persistent trade deficits and alleged threats to national security and the economy.

The IEEPA penalties were challenged by small businesses and a coalition of states. Lower courts sided with these groups, concluding the IEEPA does not authorize such expansive tariff powers. The arguments the nine SCOTUS justices heard focused on two central questions:

• Whether the text of IEEPA authorizes the president to impose tariffs; and
• Whether Congress can lawfully delegate tariff authority to the president.

According to the law firm Holland and Knight, during nearly three hours of questioning, justices from across the ideological spectrum questioned whether IEEPA, which is the cornerstone of U.S. sanctions policy, also authorizes the imposition of tariffs, a power that traditionally falls to the U.S. Congress under Article I of the U.S. Constitution. Several justices emphasized the need for a clearer statement of congressional intent before allowing the executive branch to wield such expansive tariff authority.

According to information from National Association of Manufacturers’ trade and legal experts, Justices Sonia Sotomayor, Elena Kagan, and Ketanji Jackson are likely to side with the groups challenging the Trump administration while Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh seem to agree with the president. The analysts said it is more difficult to predict where the other three justices — Chief Justice John Roberts and Justices Neil Gorsuch, and Amy Coney Barrett — will land, though all three expressed concerns about the Trump administration’s use of IEEPA.

As The Hill explained, if a SCOTUS majority rules against the Trump administration, the U.S. government would need to refund all money collected under the tariff policy. President Trump also may look for other options to impose similar penalties. The Atlantic Council explores those options at this link. In particular, the Trump administration could consider increased use of these trade statutes:

• Section 232 national security tariffs;
• Section 301 investigations, which enable the use of tariffs to address discriminatory trade practices;
• Section 122 of the Trade Act of 1974, which authorizes the president to impose tariffs of up to 15 percent for 150 days to address “large and serious” balance of payments deficits; and
• Section 338 of the Tariff Act of 1930, which authorizes the president to impose retaliatory tariffs of up to 50 percent on a country engaged in “unreasonable” or “discriminatory” practices against the United States.

The court is expected to issue its ruling in this case before the end of the year, but that date could slip to January 2026 if several justices choose to write concurring opinions or dissents. (Members of the court have promised to rule as quickly as possible, however.)