Trump’s Tariffs in Trouble after Supreme Court Hearing

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Addicted to hyperbole, President Trump calls it…

“One of the most important, maybe the most, but one of the most important cases in the history of our country”

It may prove to be the most important for him. The question the Supreme Court examined Wednesday is whether Trump had the right to impose tariffs around the world, a power the Constitution gives to Congress. The word that occurred to seemingly everyone in the media about what the questioning by the justices revealed was “skeptical”. If the Court rules that Trump’s usurpation of the tariff power was unconstitutional, “That’s undoing some of the key and critical achievements of this administration” was the reaction of the U.S. Trade Representative Jamieson Greer.

finally pushing back?

The Court has been notoriously deferential to Mr. Trump, giving him immunity from prosecution for illegal official acts, allowing mass layoffs of federal workers, impoundment and recision of congressionally allocated funds, the firing of heads of independent agencies, halting nationwide injunctions that blocked his agendas. Maybe they’ll get around to looking at these more closely someday.

But this time the Court is up against it and cannot duck. At issue is the very structure of the Constitution, whether the separation of powers it prescribes is to be reinforced or allowed to further deteriorate. Is it to be a furtherance of the conservatives’ new fondness for the unitary executive, in which all power is vested in the president, or a restitution of the powers of Congress, should Congress ever decide to cease giving them away by inaction?

Carried live on the left and right cable news channels, the question led to a testy session running almost three hours of riveting debate which we hope to have captured for you here.

acting on his own

To accrue power to himself, such as bypassing a governor’s legally-stipulated permission to commandeer a state’s National Guard for example, the president has declared a series of highly dubious “emergencies”. In the case of tariffs, he has relied on the International Emergency Economic Powers Act of 1977 — more conveniently referred to as IEEPA (eye-ee-pah) — which authorizes the president to regulate commerce during an emergency. Post Nixon abuse, the law was passed to limit presidential power, not expand it. Trump has flipped that.

Arguing for the government, U.S. Solicitor General John Sauer, yet another Trump personal lawyer elevated to a top administrative position, first tried to make the case that tariffs are foreign policy and therefore the preserve of the president. In a gravelly RFK Jr-like voice that does not prevent him from rapidly speaking avalanches of words, Sauer then had the difficult task of trying to prove that IEEPA provides for tariffs. But Chief Justice John Roberts reminded him that “the statute doesn’t use the word tariffs”. The word appears nowhere in IEEPA. Justice Neil Gorsuch probed what the president believes he can do:

”Could the president impose a 50% tariff on gas-powered cars and auto parts to deal with the unusual and extraordinary threat from abroad of climate change.”

Sauer answered,

”It’s very likely that that could be done.”

Justice Brett Kavanaugh seemed equally incredulous:

”Why would a rational Congress say, yeah, we’re going to give the president power to shut down trade? I mean, think about the effects, but you’re admitting that power’s in there.”

Justice Ketanji Brown Jackson piled on:

”Congress enacted this legislation with the intent of preventing the president from having unlimited powers in this area, and you’re asking us to now interpret that…Congress wanted to allow the president to do pretty much whatever he wanted in this area?”

Sauer was laboring to maintain that inasmuch as IEEPA’s provision for “regulate importation” can take the form of presidents deciding to invoke quotas or embargos or licensing, surely it must include tariffs as well.

the revenue tripwire

But tariffs are different was the counter-argument because, unlike those other IEEPA empowerments, tariffs collect revenue, and do so not by taxing foreign entities but by
taxing Americans. The government’s case grew ever weaker with Sauer saying:

“There certainly is incidental and collateral effect of the tariffs that they do raise revenue, but it’s very important that they are regulatory tariffs not revenue raising tariffs. The fact that they raise revenue is only incidental.”

Justice Sonia Sotomayor jumped on that:

I just don’t understand this argument…It’s a congressional power, not a presidential power, to tax, and you want to say tariffs are not taxes, but that’s exactly what they are. They’re generating money from American citizens, revenue.”

It was near comedy that almost at the same time Sauer was trying to minimize tariff revenue as incidental, Trump was bragging in a speech in Florida about the “hundreds of billions of dollars” the tariffs has so far raised (in fact, $195 billion in fiscal 2025).

for the prosecution

The tariffs’ economic pain is felt “across the country, from warehouse workers and truckers to retailers and restaurateurs”, lead plaintiff Victor Schwartz said to reporters on the steps of the Supreme Court afterward. A small wine importer, he said he was disappointed that larger companies with more resources had not spoken up, but “when I was given the chance to speak up for small American businesses, I took it.”

Presenting their case was Neal Katyal, acting solicitor general under Obama who has argued more than 50 cases before the Supreme Court. His first words were “Tariffs are taxes” which went disputed by no one. Indeed just moments later, Roberts concurred: “Yes, sure, the tariffs are a tax and that’s a core power of Congress”. Katyal continued:

“[Tariffs] take dollars from Americans’ pockets and deposit them in the U.S. Treasury. Our founders gave that taxing power to Congress alone. Yet, here, the president bypassed Congress and imposed one of the largest tax increases in our lifetimes.”

Contradicting Sauer’s claim that “regulate” in IEEPA included tariffs, Katyal said…

“Congress uses the term 1,499 times. We got about that number of hits when we looked at it, and maybe there’s some double-counting. But it’s never used even once to impose taxes or revenue-raising.”

Expressing exasperation, Katyal’s case to the justices was:

“It comes down to common sense. It’s simply implausible that in enacting IEEPA, Congress handed the President the power to overhaul the entire tariff system, and the American economy in the process, allowing him to set and reset tariffs on any and every product from any and every country at any and all times.”

Justice Amy Coney Barrett was on a similar track of abuse asking Sauer:

“And so is it your contention that every country needed to be tariffed because of threats to the defense and industrial base? I mean Spain, France? I could see it with some countries, but explain to me why as many countries needed to be subjected to the reciprocal tariff policy.”

Justice Sotomayor made plain that on the face of it Trump taxing the public with tariffs on his own should not be allowed:

”I think what we’re forgetting here is a very fundamental point, which is the Constitution is structured so that if I’m going to be asked to pay for something as a citizen, that it’s through a bill that is generated through Congress and the president has the power to veto it or not. But I’m not going to be taxed unless both houses, the executive and the legislature, have made that choice, correct?”

going, going, gone

Article I of the Constitution says, “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises“ which is further emphasized by “All Bills for raising Revenue shall originate in the House of Representatives.” The justices not only have to confront whether that power should be shared or even transferred as Trump would have it, but must deal with this conundrum, voiced by Gorsuch:

”Congress as a practical matter can’t get this power back once it’s handed over to the president. It’s a one-way ratchet toward the gradual but continual accretion of power in the executive branch and away from the people’s elected representatives.”

If the Court were to accept Trump’s argument that, as a matter of foreign policy or trade “emergency” or whatever, the president should be given the power to set tariffs, it need be recognized that presidents are not in the habit of relinquishing power and would veto any law passed by Congress someday that tries to take it back. Once gone, gone for good.

David Frum at The Atlantic says that even George III, whose taxes helped trigger the Revolution, had to go to Parliament to get them approved, and the last king to tax without Parliament’s approval “was Charles I in the 1640s and the English cut his head off for that.”

refund

As this publication covered in “Will Trump Have to Refund the Tariffs?” in August, the government might have to refund the tariffs to all who had been illegally charged. Having claimed
Nate Beeler, Columbus-Dispatch

above it was “hundreds of billions of dollars”, Trump on Thursday went full delusional:

“You know, we have to pay back trillions of dollars. We’ve taken in trillions. We haven’t taken in billions, we’ve taken in trillions of dollars.”

Justice Barrett asked Katyal, ”If you win, tell me how the reimbursement process would work. Would it be a complete mess?” Katyal acknowledged “We don’t deny that it’s difficult”. Would that mess cause a split decision by the Court? Sol Wisenberg, former deputy independent counsel and a guest on Fox’s “Will Cain Show” thinks not:

“The Supreme Court typically doesn’t ask or care about the kind of question that Justice Barrett asked. It’s, here’s our opinion, you guys pick up the mess.”

Cain asked:

”How would that work? If the tariffs are struck down, the United States has collected all this revenue, we’re gonna write checks back to other countries?”

Not even Fox hosts have been de-programmed from the claim Trump unceasingly uses to bamboozle his supporters. Just today, as this is written, he was at it again. A reporter asked “Do you agree then that Americans are paying those tariffs?” Trump answered, “I think, no, I don’t agree, I think that they might be paying something.”