Good morning, friends.
Since President Donald Trump took office earlier this year, tariffs have been a central part of his trade and foreign policies. Citing varying authorities and objectives, President Trump has levied tariffs on the importation of goods from other countries, as well as tariffs on specific goods imported into the United States.
For example, Section 232 of the Trade Expansion Act of 1962 authorizes the President to impose tariffs on goods from countries that pose a threat to the national security of the United States. Since President Trump's inauguration in January 2025, the Department of Commerce has opened “232 investigations” into copper, timber and lumber, semiconductors, processed critical minerals, pharmaceuticals, trucks and truck parts, aircraft and engines, unmanned aircraft systems, and polysilicon-derived products. President Trump also increased existing Section 232 tariffs on steel and aluminum and imposed tariffs on automobiles and automobile parts from a Section 232 investigation from his first administration.
President Trump has also cited Section 301 of the Trade Act of 1974 to authorize the U.S. Trade Representative to impose tariffs on foreign countries found to be in violation of trade agreements or found to be burdensome or restrictive on U.S. commerce.
The most controversial use of tariffs has been under the International Emergency Economic Powers Act (IEPPA). Citing this authority, President Trump has imposed global “reciprocal” tariffs to address the United States' trade imbalance with China, Mexico, and Canada. The President has also cited the flow of migrants and fentanyl into the United States as reasons to impose tariffs under IEPPA.
Prior to President Trump’s action, IEPPA had never been used to levy tariffs on imports. In response to his unprecedented use of the law, private businesses and the attorneys general of Democratic-run states challenged his use of IEPPA to levy tariffs.
Three federal courts (the U.S. Court of International Trade, the District Court for the District of Columbia, and the Court of Appeals for the Federal Circuit) have ruled against President Trump’s use of tariffs under IEPPA. As expected, the administration has appealed to the Supreme Court.
Supreme Court Case
On November 5, 2025, the Supreme Court began hearing arguments from the plaintiffs and the Trump administration on the legality of tariffs levied under IEPPA.
Many of the questions from the judges focused on whether President Trump exceeded his authority to levy tariffs under IEPPA, especially because the law does not contain the word “tariff” and no previous president has used the law in that way. Judges also questioned both sides on whether a tariff is a tax and the legality of letting a president impose taxes at will, which has historically been considered a constitutional role of Congress.
The Trump administration argued that Congress gave the president authority under IEPPA to regulate imports, which naturally includes the use of tariffs. Also, the government argued that the primary purpose of President Trump’s tariffs is regulatory, not to raise revenue, and thus should not be viewed as a tax.
Importantly, the Supreme Court case only covers tariffs collected under IEPPA authority (nearly $88 billion) and does not apply to the tens of billions of dollars collected under Section 301 of the 1974 Trade Act and Section 232 of the 1962 Trade Expansion Act.
The court has until the end of next July to issue a ruling, although many expect a faster decision given the far-reaching economic impacts the Court’s decision. Until then, the Trump administration is allowed to keep collecting tariffs under IEPPA authority. U.S. Trade Representative Jamison Greer said that he expects the Supreme Court to issue a final ruling before the end of 2025, although a ruling in early 2026 may be more likely.
What Comes Next?
While many of the justices appeared skeptical of the government’s argument in support of imposing tariffs under the IEPPA authority, Trump-appointed justices – especially Neil Gorsuch and Brett Kavanaugh – may be reluctant to completely overturn a policy so central to the President’s agenda.
There are a few potential ways the Supreme Court could rule on the case:
The Court could rule that IEPPA does not allow the use of tariffs and strike down all the tariffs that President Trump has imposed under this authority.
The Court could rule that IEPPA does allow for the use of some tariffs but strike down others that have been collected under the statute.
Finally, it could uphold all of Trump’s duties collected under IEPPA.
If the Supreme Court were to rule that the collection of tariffs under IEPPA is unlawful – either wholly or in part – importers may have a legal path toward a refund, either through a refund process set up by the government or by filing suit.
Furthermore, if the Court were to rule that the collection of tariffs is not allowed under IEPPA, it is likely the administration could reimpose nearly all of the tariffs that were originally imposed under IEPPA under other authorities, particularly Section 232 and Section 301.
The Trump administration has used the imposition of tariffs – particularly the global reciprocal tariffs issued under IEPPA – to secure trade agreements with several countries. The result of the Supreme Court ruling could jeopardize these agreements, particularly if the Supreme Court rules against the use of the IEPPA for the collection of duties.
Who We’re Watching
Chief Justice John Roberts and Justice Amy Coney Barrett: Of the six conservative justices on the Supreme Court, Roberts and Barrett are viewed as most likely to join the liberal judges in ruling against the tariffs. Both would need to break with the other conservative judges to provide enough votes to strike down the tariffs.
Justice Brett Kavanaugh: A key consideration in the ruling on this case is whether the tariffs are a tool of a president’s economic policy or a core part of a president’s management of foreign policy. Justice Kavanaugh, who was nominated to the Supreme Court by President Trump in 2018, is often the court’s most ardent defender of a president’s need for flexibility in response to international challenges, influenced by Kavanaugh’s time serving in the White House after September 11.
At the same time, Kavanaugh is skeptical of excess executive power over the economic and business environment. Also, Kavanaugh is known for his defense of the conservative legal theory known as the “major questions doctrine,” meaning that the courts should restrict executive branch actions of major impact when their legal basis is ambiguous. While many court watchers expect Kavanaugh to bless the tariffs, his vote isn’t certain.
Treasury Secretary Scott Bessent: Secretary Bessent has been President Trump’s leading official on trade policy both in implementing the tariffs under IEPPA and negotiating trade deals with other countries. Regardless of the Court’s decision on the tariffs under IEPPA, Secretary Bessent and the Department of Treasury will remain an important part of President Trump’s trade agenda, especially if President Trump needs to find alternative authorities to implement his tariffs.
Commerce Secretary Howard Lutnik: The Department of Commerce leads investigations initiated under Section 232. If the Court rules against tariffs under IEPPA authority, the administration may look to expand 232 investigations to implement tariffs on specific goods that pose a threat to national security. In this event, Secretary Lutnik and the Department of Commerce will increase their role in the administration’s trade agenda.
U.S. Trade Representative Jamison Greer: As the head of USTR, Greer serves as the president’s principal trade adviser and negotiator on all trade issues, including leading the agency’s investigation and review of the 301 tariffs. As with the Department of Commerce, USTR’s role on trade policy and tariffs could become more substantial if the Supreme Court rejects the use of IEPPA tariffs and the administration seeks other authorities, such as Section 301, to employ tariffs as a part of its trade agenda.
Congress: To date, a Republican House and Senate have largely gone along with President Trump’s use of tariffs, even if many members privately disagree with the policy.
The Senate has passed a series mostly symbolic resolutions to end the national emergency Trump used to declare reciprocal tariffs and disapproving of the President’s tariffs on Canada and Brazil. Four Republican senators – Rand Paul (R-KY), Lisa Murkowski (R-AK), Susan Collins (R-ME), and Mitch McConnell (R-KY) – voted with Senate Democrats to pass the measures. The House GOP Leadership, however, has resisted any such votes condemning the tariffs and is likely to continue to defer to the administration on the use of tariffs since it is a core component of the President’s economic and foreign policy.
Our team is closely following the dynamic trade environment, including the Supreme Court case, executive action, and discussions on Capitol Hill. We are standing by to help your team understand how tariffs are affecting your specific industry or organization and the ways we can influence the process.
Sincerely,
Bridge Public Affairs
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