On Wednesday, the Supreme Court will hear oral arguments on President Donald Trump’s so-called “reciprocal tariffs.”
The case is another test of how far the president can stretch his executive authority. The ultimate decision by the Supreme Court will also shape the balance of power between the executive branch and Congress.
Trump argues that the International Emergency Economic Powers Act gives him authority to impose tariffs of unlimited duration on nearly all imports from nearly every country. This is an expansive claim, one that would, if upheld, grant the White House sweeping control over U.S. trade policy with little congressional oversight. It would also give the president the power to tax through the use of tariffs.
A federal appellate court has already rejected this argument. This lower court ruled that the IEEPA does not grant the president the power to levy tariffs so broadly. Tariffs, after all, are a form of taxation, and the Constitution specifically gives the power to tax to Congress, not the president. While Congress has allowed presidents to impose tariffs in limited situations, these tariff powers are narrowly defined by legislation. Nowhere in the IEEPA, or in any other trade law, is there a hint that Congress meant to hand over its taxing power wholesale to the executive branch.
Moreover, there is no real “emergency” to justify Trump’s actions. The United States has run trade deficits for half a century, and during that time, the economy has steadily grown stronger. The U.S. dollar is the global reserve currency. If trade deficits were harmful, then the greenback would not have the global standing that it does. Many economists argue that trade deficits actually benefit American consumers by allowing the U.S. to consume more than it produces. Orthodox economic theory holds that deficits are not inherently harmful and certainly not grounds for invoking emergency powers.
The broader issue before the Supreme Court is constitutional. If Congress intended to give presidents the kind of sweeping authority Trump claims, it would have said so explicitly. The nondelegation doctrine, a bedrock principle of constitutional law, forbids Congress from transferring its core powers, such as taxation, to the president. The authors of the Constitution gave Congress control of the purse for a reason: to prevent any one person from wielding too much power. A Supreme Court ruling in Trump’s favor would effectively gut this constitutional safeguard.
Trump will very likely lose this fight.
Still, that does not mean he is out of options. Congress has already provided the executive branch with other legal tools to impose tariffs under specific conditions. Under Section 232 of the Trade Expansion Act of 1962, Trump can impose tariffs to protect strategic industries. In addition, Congress has provided the executive branch with the power to impose tariffs to counter unfair trade practices by other countries. If Trump’s reciprocal tariff plan fails in court, expect him to pivot quickly to these long-standing legislative authorities.
Many U.S. trading partners have already struck deals with Washington to maintain tariffs of around 20%. Regardless of what the court decides, these negotiated tariffs are likely to remain in place.
Then there is China. The U.S. continues to run a massive trade deficit with Beijing, which engages in systematic mercantilism by subsidizing exports and distorting global markets. This has devastated parts of the U.S. manufacturing base. Under Section 301 of the Trade Act of 1974, the president has the authority to impose tariffs to address such unfair practices. Courts have long upheld this power.
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So even if Trump loses at the Supreme Court on the IEEPA question, his ability to shape trade policy remains intact. The real significance of this case lies not in its short-term economic impact but in its constitutional implications. Upholding Trump’s claim would hand future presidents near-total discretion to impose taxes under the guise of emergency powers, an outcome that would fundamentally weaken Congress’s role in economic policymaking.
The Supreme Court’s decision will send a message, not just to Trump but to every future occupant of the Oval Office, about where the line is drawn between presidential power and constitutional overreach.
James Rogan is a former U.S. foreign service officer who has worked in finance and law for 30 years. He writes a daily note on the markets, politics, and society. He can be followed on X and reached at [email protected].