Supreme Court Appears Skeptical of Trump’s Global Tariffs (4)

The US Supreme Court appeared skeptical of President Donald Trump’s sweeping global tariffs, as key justices suggested he had overstepped his authority with his signature economic policy.

In a nearly three-hour hearing Wednesday, the court hinted it was ready to put significant limits on Trump’s far-reaching agenda for the first time since he took office in January. Three members of the conservative majority questioned Trump’s use of an emergency-powers law to collect tens of billions of dollars in tariffs a month.

Chief Justice John Roberts said the tariffs were an “imposition of taxes on Americans and that has always been the core power of Congress.” Justice Neil Gorsuch also signaled he was a probable vote against the president, and fellow Trump appointee Amy Coney Barrett asked probing questions of both sides.

A decision against Trump could force more than $100 billion in refunds, remove a major burden on the US importers that are paying the tariffs, and blunt an all-purpose cudgel the president has wielded against trading partners. More broadly, it would be by far the Supreme Court’s most significant pushback against Trump’s assertions of powers that go well beyond those claimed by his White House predecessors.

Read More: Trump Tariffs Fate Rides on Supreme Court Justices He Picked

The court’s three liberal justices — Justices Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson — also expressed doubt about the legality of the tariffs. A ruling could come as quickly as the end of the year, given the ultra-expedited schedule the Supreme Court has set so far.

“I came to oral argument thinking the administration had a pretty uphill climb, and I left feeling the same way,” said Adam White, a scholar who focuses on the Supreme Court and constitutional law at the American Enterprise Institute. “The far and away most likely outcome is that the administration loses this case.”

That would be a shift at a conservative-controlled court that has repeatedly backed Trump this year through temporary orders letting him implement new policies while legal fights go forward. The tariff case marks the first time the court directly considered Trump’s underlying assertions of sweeping presidential power.

Read more: Trump’s Options If Supreme Court Says His Tariffs Are Illegal

The atmosphere Wednesday was unusually relaxed for a court that is often sharply divided, with laughter punctuating the arguments several times. At one point, Kagan playfully needled Roberts after he seemed to confuse her and Sotomayor, who had just finished asking a round of questions.

“No, she’s Justice Sotomayor. She just finished,” Kagan quipped.

The case involves Trump’s April 2 “Liberation Day” tariffs, which impose taxes of 10-50% on most US imports depending on the originating country. Trump says those duties are warranted to address the longstanding national trade deficit. The high court clash also covers separate tariffs Trump said he imposed on Canada, Mexico and China to address fentanyl trafficking.

Authority Questioned

Trump says his tariffs are authorized under the 1977 International Emergency Economic Powers Act, a law that gives the president a panoply of tools to address national security, foreign policy and economic emergencies. IEEPA, as the law is known, doesn’t mention tariffs as one of those powers, though a key provision says the president can “regulate” the “importation” of property to deal with a crisis.

Gorsuch indicated alarm at the reach of the Trump administration’s contention that Congress had delegated its constitutional authority over tariffs to the president.

Under the government’s logic, “what would prohibit Congress from just abdicating all responsibility to regulate foreign commerce – for that matter, declare war – to the president?” Gorsuch asked US Solicitor General D. John Sauer, the government’s top Supreme Court lawyer.

Gorsuch later asked whether a president could impose a 50% tariff on gas-fueled cars and auto parts to tackle climate change. Sauer responded that the president could.

Barrett questioned whether the statute’s words were enough to let the president put in place tariffs.

“Can you point to any other place in the code or any other time in history where that phrase together ‘regulate importation’ has been used to confer tariff-imposing authority?” Barrett asked Sauer.

Trump’s Tariffs Face Supreme Court Test. What to Know: QuickTake

But Barrett also joined Justice Brett Kavanaugh in questioning whether the arguments of the tariff challengers made sense, given that IEEPA authorizes the president to shut down trade entirely with a foreign country. Both asked why Congress might preclude the president from taking the more limited step of imposing tariffs.

“That just seems a bit unusual,” Kavanaugh said.

In a possible sign of the case’s likely outcome, Barrett asked how refunds would work should the tariffs be invalidated. “It seems to me like it could be a mess,” the justice said.

The companies’ lawyer, Neal Katyal, acknowledged refunds would be “very complicated,” but argued that the Supreme Court previously had held that “serious economic dislocation isn’t a reason to do something.” He also said the court could invalidate the tariffs only on a “prospective” basis, though none of the justices indicated any interest in that possibility.

Sauer, the administration lawyer, told the justices that Trump “determined that our exploding trade deficits had brought us to the brink of economic national security catastrophe.”

The high court is considering two separate lawsuits filed by small businesses along with a third case pressed by 12 Democratic state attorneys general. All three lower courts to have ruled on the issue declared the tariffs to be unlawful.

Roberts indicated he saw the case as being governed by the “major questions doctrine,” a legal rule the court used repeatedly to thwart Joe Biden’s agenda when he was president. Under the major questions doctrine, federal agencies need explicit congressional authorization to take actions that have sweeping economic or political significance.

“The justification is being used for a power to impose tariffs on any product from any country in any amount for any length of time,” he said. “It does seem like that’s major authority.”

A number of legal experts said the court seemed likely to put limits on Trump’s tariff power.

“Some conservative justices had tough questions for both sides, making it hard to say with certainty where they’ll land,” said Liza Goitein, an expert on emergency powers at the Brennan Center for Justice at NYU Law, on social media. “But given the degree of pushback on key administration arguments, it’s looking quite possible — if not likely — the tariffs will be struck down.”

Treasury Secretary Scott Bessent said Sauer “presented strong, persuasive arguments on the necessity of using IEEPA tariff authority to confront the emergencies President Trump has declared.”

The tariff arguments were a hot ticket in Washington. Among those in attendance from the administration were Bessent, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer. Members of Congress included Democratic Senators Amy Klobuchar and Ed Markey and Republican Representative Jason Smith. John Mulaney, the comedian, was also at the arguments.

Should Trump lose, administration officials say most of the levies could be imposed using other, more complicated legal tools. Trump’s tariffs on steel, aluminum and automobiles were put in place under a different law, so are not directly affected.

The cases are Trump v. V.O.S. Selections, 25-250, and Learning Resources v. Trump, 24-128.

(Updates with comment from legal expert in sixth paragraph.)

--With assistance from Justin Wise, Hadriana Lowenkron and Zoe Tillman.

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Greg Stohr

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