On November 6, 2025, the U.S. Supreme Court convened to hear oral arguments in a high-stakes case that could reshape the very foundation of American trade policy and presidential authority. At the heart of the dispute: whether President Donald Trump’s sweeping use of tariffs—enacted under the International Emergency Economic Powers Act (IEEPA)—exceeds the powers granted to the executive branch by Congress. The outcome, expected to reverberate through global markets and diplomatic corridors, may determine not only the fate of billions in collected tariffs but also the contours of presidential power for years to come.
Trump’s approach to tariffs has been nothing short of unprecedented. Relying on IEEPA, he imposed so-called “reciprocal” tariffs—some as high as 145% on Chinese imports and 50% on goods from countries like India and Brazil. According to ABC News, these measures have already funneled nearly $90 billion into the U.S. Treasury as of late September, with some estimates suggesting the total could reach $195 billion if the court rules against the administration and mandates a refund to importers. The stakes, both financial and political, couldn’t be higher.
During the nearly three-hour oral arguments, the justices—both conservative and liberal—grilled attorneys from both sides on the limits of executive power. The main legal battleground centered on whether IEEPA’s language, which allows the president to “regulate importation by means of licenses or otherwise,” could be stretched to justify broad-based tariffs. Justice Neil Gorsuch, a Trump appointee, homed in on the phrase, pondering aloud whether tariffs could simply be rebranded as license fees. “The statute says the president may, by means of licenses or otherwise, regulate importation,” Gorsuch observed. “Maybe the President could simply recharacterize these tariffs as licenses or rejigger the scheme so that they are licenses.”
Justice Amy Coney Barrett echoed this curiosity, telling the challengers’ attorney, “This license thing is important to me.” She and Justice Brett Kavanaugh pointed to a 1976 Supreme Court decision that upheld President Gerald Ford’s authority to impose import fees—even though the statute at issue made no explicit mention of tariffs. Kavanaugh pressed the point: “The court, obviously 9-0, rejects that argument,” referencing the Ford-era case. Barrett added, “That Congress could use the exaction of money to control quantity,” suggesting that Trump’s tariffs could be viewed as regulatory rather than revenue-raising.
Yet, skepticism ran deep on both sides of the ideological spectrum. The court’s liberal justices—Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson—were especially vocal in questioning the administration’s expansive interpretation of the law. According to SCOTUSblog and ABC News, even some of the court’s most conservative members, including Clarence Thomas and Samuel Alito, appeared wary of granting the White House unchecked tariff authority. Justice Gorsuch, typically a champion of limited government, warned that the administration’s logic risked creating a “one-way ratchet” that would permanently shift power from Congress to the executive branch.
The administration’s own legal team may have inadvertently fueled these concerns. As reported by Fortune, the government’s lawyer conceded that, under their reasoning, a future president could invoke IEEPA to declare a climate emergency and block imports of gasoline-powered cars—a hypothetical that alarmed justices and analysts alike. The solicitor general also acknowledged that Americans are footing part of the tariff bill, even as the White House touts the revenue windfall.
Analysts and legal scholars have been quick to parse the justices’ questions for clues about the eventual outcome. James Lucier, cofounder of Capital Alpha Partners, predicted that the court could deliver a lopsided defeat for Trump. He suggested that Barrett might join the three liberal justices in striking down the tariffs, and that even stalwarts like Thomas, Alito, and Gorsuch could have “grave reservations” about upholding such a broad expansion of executive power. “The more likely scenarios would all have Thomas, Alito, and Gorsuch voting to strike down the IEEPA tariffs or to curtail them, in our view,” Lucier wrote. Other observers, like South Texas College of Law professor Josh Blackman, see a closer outcome but still believe the Trump-appointed justices could tip the scales in favor of upholding the tariffs.
Regardless of the verdict, the trade saga is far from over. As Axios and CNN have reported, even if the Supreme Court invalidates these particular tariffs, Trump retains a formidable arsenal of tariff authorities under other statutes. Section 232 of the Trade Expansion Act of 1962 allows the president to impose tariffs on national security grounds, while Section 301 of the Trade Act of 1974 permits action against countries deemed to violate trade agreements or burden U.S. commerce. Section 122 of the Trade Act of 1974 and Section 338 of the Tariff Act of 1930 also provide alternative avenues for imposing duties, though each comes with its own procedural hurdles and limitations.
President Trump, for his part, has not shied away from dramatic rhetoric. On November 7, he told reporters that losing the case would be “devastating for our country” and warned of dire consequences, including the U.S. being “rendered defenseless” and “reduced to almost Third World status.” Yet, even his critics and legal opponents concede that the administration is unlikely to abandon tariffs altogether. “We would expect the administration to use other authorities to impose substantially similar tariffs,” wrote Goldman Sachs economists. “Large trading partners would likely see little change.”
The implications stretch beyond U.S. borders. As Axios noted, the uncertainty surrounding Trump’s tariff powers has cast a shadow over foreign direct investment agreements he negotiated with other nations. If the Supreme Court curtails his unilateral authority, some countries might reconsider or even renege on their investment pledges, potentially impacting infrastructure projects and state-level economic plans. On the other hand, many foreign governments may opt to maintain their commitments, wary of antagonizing the U.S. or triggering retaliatory measures under other trade laws.
Meanwhile, American importers and businesses are left in limbo. Should the court order the government to return the $195 billion in collected tariffs, there’s no clear mechanism for doing so—raising the specter of protracted legal battles and bureaucratic headaches. The uncertainty also clouds the outlook for trade negotiations in 2026, with economists like Christopher Hodge of Natixis CIB Americas predicting that “trade threats and tariff drama” will remain a fixture of the Trump presidency, regardless of the Supreme Court’s decision.
As the justices deliberate, one thing is clear: the case is about far more than tariffs or trade deficits. It’s a test of the balance of power between Congress and the presidency, and of how far one administration can push the boundaries of emergency authority in pursuit of its economic agenda. For now, the world waits—watching closely as a divided court weighs the future of American trade policy, executive power, and the global economy itself.
