When the U.S. Supreme Court convenes this week, it will do so under a spotlight as bright as any in recent memory, with the fate of Donald Trump’s sweeping tariff regime—and, by extension, the future of global trade—hanging in the balance. The legal battle centers on whether the International Emergency Economic Powers Act (IEEPA) of 1977 allows the president to unilaterally impose tariffs on nearly every nation, a question with enormous implications for both America’s constitutional order and its relationships with key allies like Canada.
At the heart of the case, scheduled for oral arguments on November 5 and 6, 2025, are two combined lawsuits. The first challenges Trump’s so-called reciprocal tariffs, which have battered multiple economies since his return to office. The second targets duties imposed on Canada, Mexico, and China under the guise of combating the fentanyl crisis—a rationale that, according to U.S. government data, is far more applicable to the southern border than to Canada’s.
According to The Canadian Press, these hearings will not affect the tariffs Trump has levied under Section 232 of the Trade Expansion Act of 1962. Those duties, which remain untouched by the current legal challenge, continue to hit Canada’s steel, aluminum, automobile, lumber, and copper industries hard. Prime Minister Mark Carney has repeatedly warned Canadians that, regardless of the Supreme Court’s decision, some level of U.S. tariffs is likely to persist. “We’re suffering, everyone else is suffering, but we’re gonna have to come up with something else,” said Carlo Dade, director of international policy at the University of Calgary’s School of Public Policy, in comments reported by The Canadian Press.
Lawyers representing the plaintiffs argue that IEEPA was never meant to grant the president broad powers over tariffs. The law, they contend, gives the president authority to control economic transactions only after declaring a national emergency, and crucially, it doesn’t mention the word “tariff” or any synonyms. “Tariffs are a form of taxation reserved for Congress,” the plaintiffs argue, according to The Guardian. They maintain that Trump’s use of trade deficits as the basis for his so-called “Liberation Day” duties fails to meet IEEPA’s requirement of an “unusual and extraordinary threat.”
Yet, as Stanford Law School professor Michael McConnell told The Canadian Press, the Supreme Court could issue a split ruling. While it might strike down the reciprocal tariffs, the fentanyl-related duties—based on a distinct legal theory—could be upheld. If that happens, Canada would remain exposed to what Dade called “anytime, anywhere, anyhow tariffs.”
The origins of the current standoff date back to March 2025, when Trump imposed a 25% economywide tariff on Canada, citing a national emergency at the northern border due to fentanyl. Ottawa responded with a flurry of measures: appointing a “Fentanyl Czar,” introducing new border security legislation, and ramping up aerial surveillance. Despite these efforts, the Trump administration raised the tariff to 35% in August, accusing Canada of failing to cooperate. Negotiations between the two countries have been rocky, with only a brief thaw following Prime Minister Carney’s White House visit in October.
But even that fragile detente was shattered by an Ontario-sponsored television ad quoting Ronald Reagan’s famous warnings about the dangers of tariffs and his praise for free trade. Trump, reportedly incensed, terminated trade talks and accused Canada of trying to influence the Supreme Court ahead of this week’s hearing. As The Guardian noted, “It is beyond me how a Canadian TV ad featuring clips of Ronald Reagan warning about the high cost of tariffs and extolling the virtues of free trade amounts to an emergency that justifies the added 10% tariff with which Trump retaliated against Ottawa last Monday.”
Trump’s approach to governance has been marked by an unprecedented reliance on the declaration of national emergencies. Since the start of his second term, he has invoked emergencies more often than any president since the passage of the National Emergencies Act in 1976, using them to justify everything from border wall funding to restrictions on energy production. The current legal clash, however, is the first to directly challenge his use of IEEPA as a tool for imposing sweeping tariffs.
IEEPA grants the president authority “to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the president declares a national emergency with respect to such threat.” But as the plaintiffs point out, using this statute “to impose immense and ever-changing tariffs on whatever goods entering the US he chooses, for whatever reason he finds convenient to declare an emergency, the president has upended the constitutional order and brought chaos to the American economy.”
Critics argue that Trump’s broad interpretation of emergency powers has manufactured crises rather than solved them. Trade deficits, for instance, have been a feature of the U.S. economy since 1975 and are generally attributed to macroeconomic factors like low national savings and large budget deficits—not to foreign malfeasance. Unauthorized immigration, another favorite target of Trump’s emergency declarations, is similarly rooted in longstanding economic demand for foreign labor. “Whatever it may be, it is neither extraordinary nor unusual,” as The Guardian put it.
Meanwhile, the real-world effects of Trump’s tariff policies are starting to bite. Prices on intermediate goods and consumer products are rising, threatening the competitiveness of American exporters. While inflation has so far remained relatively subdued—thanks in part to importers stockpiling goods in anticipation—most economists expect a sharper shock in the months ahead. The global economy, still reeling from Trump’s “Liberation Day” volley of tariffs in April, remains on edge. Earlier this month, Beijing signaled its willingness to impose export controls on rare earth minerals, a move that could cripple industries worldwide. A temporary truce was reached at the Asia-Pacific Economic Cooperation summit in South Korea, with China agreeing to suspend rare earth controls and the U.S. relaxing technology export restrictions, but the underlying tensions remain unresolved.
Even if the Supreme Court curtails Trump’s use of IEEPA, other statutes—such as Section 201 and Section 301 of the Trade Act—still give the president tools to impose tariffs, albeit with more procedural safeguards. Under Section 301, for example, the U.S. Trade Representative must conduct an investigation, consult with affected countries, and publish its findings before retaliating against unfair trade practices. As Dade observed, “If you move to a 232 regime, then the president has to pick a category. He has to file for an investigation. The investigation has to go through.” While these constraints won’t end the trade war, they could at least slow its escalation.
Ultimately, the Supreme Court’s decision will set a critical precedent—not just for the legality of Trump’s tariff policies, but for the broader question of how much power a president can wield in the name of national emergency. For Canada and other U.S. trading partners, the outcome could shape economic relations for years to come. For Americans, it’s a test of whether the checks and balances at the heart of their democracy can withstand the pressures of an increasingly unpredictable global landscape.
With so much at stake, both sides of the border are watching—and waiting—to see just how far a president’s emergency powers can reach.
