In One Sentence

• The US Supreme Court on November 5 heard a landmark case challenging US President Donald Trump’s use of emergency powers to impose global tariffs, signaling skepticism over the scope of presidential authority on trade and tariff policy.
• The nine justices examined whether Trump lawfully invoked the 1977 International Emergency Economic Powers Act (IEEPA) to levy tariffs on imports from over 100 countries, measures that have reshaped global commerce and provoked retaliation.
• Chief Justice John Roberts questioned the government’s broad reading of the law, noting that taxation “has always been a core power of Congress.”
• Trump, on November 10, warned the US would face an “economic disaster” and a “national security disaster” if the Supreme Court forced his administration to repay the collected tariffs, asserting that the required repayment would exceed $2 trillion. 
• The President instead floated the idea of issuing dividends of $2,000 to the “middle income people and lower income people” and tariffs would be used to lower the US national debt whereas Treasury Secretary Scott Bessent said that no formal proposals have been made to distribute tariff revenues. 
• U.S. Trade Representative Jamieson Greer on November 6 said the Trump administration “will be ready” to refund some tariffs if the Supreme Court overturns them, noting that “in some situations, specific plaintiffs will get a refund.”
• Democrats and other opponents of Trump’s tariffs expressed optimism after the Supreme Court hearing, with Rep. John Larson (D-CT) and Sen. Mark Warner (D-VA) saying the court appeared skeptical of Trump’s authority and vowing to continue opposing the policy.
• Before the hearing, Bessent had noted that if the Supreme Court struck down Trump’s tariffs, the administration had alternative tools such as Sections 232 and 301 of U.S. trade law to impose levies. 
• Bessent also revealed on Fox News on November 12 that the administration will soon announce “substantial” tariff cuts on consumer items such as coffee, bananas and other fruits not produced in the United States, a move he said would “bring prices down very quickly.”

Mark the Essentials

• The Supreme Court case stems from lawsuits filed by 12 U.S. states, led by Oregon, and several small businesses, arguing that IEEPA does not authorize presidents to impose tariffs unilaterally.
• Arguing for the petitioners, lawyer Neal Katyal said that Congress never intended to grant presidents power to “overhaul the entire tariff system and the American economy.”
• US Solicitor General John Sauer defended the tariffs as a legitimate tool to “regulate foreign commerce,” warning that limiting presidential emergency power would weaken U.S. negotiating leverage.
• Lower courts, specifically the Court of Appeals for the Federal Circuit and the Court of International Trade (CIT), have ruled that Trump’s tariffs exceeded his IEEPA-based authority.
• On October 29, Fed chair Jerome Powell said that higher tariffs are “pushing up prices in certain categories” as a New York Times analysis showed that almost half of all US imports are now subject to Trump’s global tariffs. 
• Bessent continued to defend Trump’s global tariffs in an interview to Fox News, citing China’s rare earth export curbs and saying, “The president was able to push back using his IEEPA powers.”
• On October 30, Greer said his office will continue its Section 301 probe into China’s commitments under the phase-one trade deal, calling the investigation critical despite recent de-escalation and noting that “a lot of issues” for U.S. companies operating in China remain unresolved.
• On November 5, China suspended retaliatory tariffs on U.S. agricultural products, including soybeans, corn, wheat, sorghum, and chicken, following Washington’s halving of fentanyl-related levies, part of a one-year truce between President Trump and Chinese President Xi Jinping aimed at stabilizing bilateral trade.

Keeping an Eye On…

• The day of reckoning looms for President Donald Trump’s reciprocal tariffs. On November 5th, the Supreme Court heard oral arguments on the legality of the tariffs, based as they are – questionably – on the president’s foreign and economic emergency authority, the International Emergency Economic Powers Act. IEEPA, enacted in 1977, has never been marshaled by a president to impose tariffs, although its predecessor authority, the WWI-era Trading with the Enemy Act (TWEA), was mobilized by President Nixon in 1971 to impose a 10% supplemental duty on goods entering the US following his suspension of US dollar convertibility to gold.  

  The Trump administration’s arguments to the nine justices on the reciprocal tariffs were more-or-less the same ones heard before the Court of International Trade (CIT) earlier this April. The US’ large, multi-decade-long balance of payments deficits had hollowed out the industrial base and, having reached a tipping point, constituted a national security threat. To remedy this threat, the president had declared a national emergency and marshaled his foreign and economic emergency powers to levy a range of tariffs. These tariffs, which are authorized under IEEPA’s “regulate … importation” language and hence does not amount to a utilization of an “unheralded” power, pertains to the president’s foreign and security authorities, and was not merely a trade policy issue being handled under the president’s congressionally-delegated powers. Being a matter that pertains to foreign and security policy, these emergency tariffs furthermore must not be viewed as an illegal executive branch power grab that lacks congressional authorization. The ‘major questions doctrine’ does not apply to foreign policy questions and in any case, on foreign policy matters Congress typically delegates broadly to the president. And finally, the review authority for such powers resides constitutionally with the political branches. Congress if it so chooses can terminate the said national emergency through a joint resolution. The courts, hence, need to butt-out of the matter.        

  The administration’s arguments are not without merit. A tightly woven thread of logic, albeit narrowly constructed, runs through them. That said, the administration’s arguments face a tall order if they are to be sustained in court. It is by no means clear that the president’s power to “regulate … importation” is tantamount to the power to ordinarily “reach into the pockets of the American people,” i.e., to levy revenue-raising tariffs, as Justice Gorsuch observed at the hearing. The assignment of tariff power, which is a form of taxing power, resides with Congress. The president’s power to “regulate … importation” might thus extend only as far as non-monetary measures, such as embargoes, a point that the Appeals Court had belabored in late-August when it noted that the power to tax/tariff is distinct from the power to regulate and that the former is not always incident to the latter. 

  Second, it is by no means clear that even if the president enjoys the authority to levy tariffs, that he can do so on an emergency basis. The history of the enactment of the IEEPA suggests that Congress, when writing the successor law to the Trading with the Enemy Act (TWEA), had explicitly cabined the President’s authority to impose tariffs in response to balance-of-payments deficits to a non-emergency statute that was specific, narrower, and time-limited (Section 122 of the Trade Act of 1974). The CIT ruling in May made this abundantly clear. 

  And finally, it is by no means clear that even if the president enjoys the authority to levy tariffs on an emergency basis, i.e., during a time of war or a national emergency, that such tariffs could be unbounded in scope, amount and duration. Unbounded authority which does not meaningfully constrain the president’s tariff power would, as per the non-delegation doctrine, amount to an unconstitutional delegation of power. Congress, after all, enjoys the authority to regulate commerce with foreign nations. The Nixon tariffs of the early-1970s, held up by the Trump team as precedential of the president’s authority to levy emergency tariffs, were anything but unbounded. The relevant court’s acceptance at the time was expressly premised on the tariffs’ limits, i.e., as a temporary measure calculated to tide over a particular national emergency that was limited in scope and amount. It is telling too that the Appeals Court ruling in late-August had glided over the theoretical question as to whether IEEPA authorizes tariffs or not and had instead focused its attention on whether the current Trump reciprocal tariffs – unbounded as they are in scope, amount and duration – were authorized by IEEPA. It concluded that they were not.  

  Over the next month or so, the nine Supreme Court justices have their work cut out for them. In all frankness, it should not be a very hard decision to arrive at. The CIT had ruled 3-0 against; the Appeals Court 7-4 against. Expect the Supreme Court to strike down the Trump reciprocal tariffs 5-4, maybe even 6-3, although the margin should be wider.

Expanded Reading

• Bessent says ‘substantial’ tariff relief on coffee and bananas is coming soon, NBC News, November 12, 2025
• What to know about Trump’s promise of $2,000 tariff dividend payments, ABC News, November 10, 2025
• Conservative justices sharply question Trump tariffs in high-stakes hearing, BBC, November 5, 2025 
• Bessent says U.S. has ‘lots’ of options to use on tariffs if it loses Supreme Court case, CNBC, November 5, 2025
• Almost Half of U.S. Imports Now Have Steep Tariffs, NYT, November 5, 2025
• China Ends Levies on US Farm Goods, Halts Export Curbs on Firms, Bloomberg, November 4, 2025 
• Bessent points to China’s rare earths restrictions to justify Trump tariffs as Supreme Court to hear arguments about emergency powers, Fortune, September 2, 2025
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