Key Upcoming Ruling on the Use of Emergency Powers to Impose Tariffs

TL;DR: The Supreme Court of the United States will soon decide whether U.S. presidents can use emergency powers to impose tariffs. Even if the administration loses the case, it could still rely on other trade laws to impose tariffs. Although the current tariffs are not likely to be eliminated as a direct result of the Court ruling, the case is very important as it will determine how far presidents can go unilaterally, without Congress, on U.S. trade policy.

Here is what is at what is at stake:

Later today, the Supreme Court of the United States (SCOTUS) will hear arguments on whether U.S. presidents can use emergency economic powers under the International Emergency Economic Powers Act (IEEPA) to impose tariffs. The case is a major test of how far executive authority can go in trade policy.

If the Court rules against the administration, the decision would prevent the president from using IEEPA for tariff purposes and reinforce Congress’s role in trade matters. However, a potential SCOTUS decision against the administration is not expected to automatically require refunds of tariffs already paid under IEEPA. Whether refunds are due would most likely be decided by lower courts, and that process could take time to resolve.

U.S. Treasury Secretary Scott Bessent said he expects the Supreme Court to uphold the IEEPA-based tariffs. But if it doesn’t, he noted that the administration could “simply switch” to other laws, including Section 122 of the Trade Act of 1974, which allows temporary tariffs of up to 15% for 150 days to address trade imbalances, and Section 338 of the Tariff Act of 1930, which permits tariffs of up to 50% on countries that discriminate against U.S. commerce.

In short, even if IEEPA is off the table, automatic refunds of tariffs are highly unlikely, and the administration is prepared to rely on other legal authorities to impose tariffs.

The Supreme Court’s decision is relevant not because it will end tariffs and bring the situation back to the previous status quo, but because it will define whether U.S. presidents can use broad emergency powers to reshape trade policy unilaterally, without Congress. A decision limiting that authority would make future tariff actions more transparent and legally constrained. Conversely, a ruling favorable to the administration could expand presidential discretion in trade policy.

For those interested in trade policy, this is definitely an important case to monitor due to its broad implications.