Washington — The Supreme Court on Tuesday said it will decide whether President Trump can impose his most sweeping tariffs, setting up a major test of one of the pillars of the president’s economic agenda.
The high court agreed to review lower court decisions that found Mr. Trump did not have the authority to issue many of his global tariffs under an emergency powers law. The Justice Department appealed one of those rulings, from a federal appeals court, to the Supreme Court last week and asked it to move swiftly.
The Trump administration has argued that upholding the ruling from the U.S. Court of Appeals for the Federal Circuit would put the United States at a disadvantage and expose the nation to retaliatory trade policies.
The case is the first in which the Supreme Court will directly decide the legality of one of Mr. Trump’s second-term policies. The high court has been asked roughly two dozen times to intervene in challenges to many of the president’s initiatives, but on an interim emergency basis.
The justices said arguments in the tariffs case would take place in the first week of November.
The tariffs case
One of the disputes before the Supreme Court was brought by a group of small businesses and 12 states. They argued that he did not have the authority to impose many of the global tariffs under the emergency powers law that he invoked, called the International Emergency Economic Powers Act.
A federal trade court ruled in May that Mr. Trump exceeded his authority when he issued the tariffs under IEEPA, and the Federal Circuit upheld that decision late last month. In its 7-4 decision, the appeals court agreed that the tariffs are illegal.
“It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs,” the appeals court wrote. “The statute neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President’s power to impose tariffs.”
The appeals court did not decide whether IEEPA authorizes any tariffs at all. Instead, it only resolved whether sweeping duties that Mr. Trump imposed through a series of executive orders earlier this year are allowed under the law.
The second case involves a pair of Illinois-based companies that sell educational toys and products. A federal district judge in Washington, D.C., ruled in May that IEEPA “does not authorize the president to impose the tariffs set forth” in his executive orders. The decision from U.S. District Judge Rudolph Contreras was more narrow, barring the Trump administration only from collecting any tariff from the two companies. Contreras paused his decision while the Justice Department appealed to the D.C. Circuit.
The two companies asked the Supreme Court in June to fast track the case and leap frog the appeals court in Washington, D.C.
The duties at issue include those announced by Mr. Trump in early April — which he refers to as “Liberation Day” — that set a 10% baseline rate for nearly every country, and higher “reciprocal” tariffs on dozens of U.S. trading partners. It also involves a set of levies on imports from Canada, Mexico and China in response to what Mr. Trump said is their failure to address the trafficking of fentanyl across U.S. borders.
The president has used the tariffs, and the threat of additional duties, to try to force trading partners to negotiate trade deals with his administration. So far, he has announced frameworks of trade agreements with the European Union and six countries: the United Kingdom, Japan, South Korea, Vietnam, Indonesia and the Philippines.
Mr. Trump is the first president to use IEEPA to impose tariffs, though it has been used by his predecessors to hit foreign nations with economic sanctions. His administration has argued that a denial of tariff authority would put the U.S. on the brink of “economic catastrophe” and make the nation poorer.
In urging the Supreme Court to move quickly, Solicitor General D. John Sauer wrote in a filing that the Federal Circuit’s “erroneous decision has disrupted highly impactful, sensitive, ongoing diplomatic trade negotiations, and cast a pall of legal uncertainty over the President’s efforts to protect our country by preventing an unprecedented economic and foreign-policy crisis.”
The Trump administration has argued that IEEPA gives the president broad powers to regulate trade, including imposing tariffs, “to deal with any unusual and extraordinary threat” to U.S. national security, foreign policy or the economy.
Mr. Trump has said that trade deficits and the flow of fentanyl into the U.S. constituted threats to the national security and economy of the U.S., and invoked IEEPA to impose tariffs to address them.
Mr. Trump’s tariffs have remained in effect, since the Federal Circuit put its decision on hold until Oct. 14 to give the administration time to appeal to the Supreme Court.
The plaintiffs — the five small businesses and 12 states — agreed that the Supreme Court needs to resolve the legality of Mr. Trump’s tariffs, calling it an issue of “great” and “undoubted importance.” They argued that the tariffs are illegal and urged the high court to affirm the Federal Circuit’s decision.
“The government’s case rests entirely on the notion that the phrase ‘regulate … importation’ in IEEPA constitutes a boundless power to impose tariffs on the American people whenever the President wants, at whatever level he wants, for whatever countries and products he wants, and for as long as he wants, merely by declaring that longstanding U.S. trade deficits are a national ’emergency’ and an ‘unusual and extraordinary threat’ — assertions the government claims are effectively unreviewable,” lawyers for the small businesses wrote in a Supreme Court filing. “There are no limits.”
The states, meanwhile, said that the Constitution gives Congress the power to collect taxes, and the Trump administration is claiming that the president has sweeping authority to impose tariffs “on any country, at any rate, and for however long he likes.”
“The President’s chaotic implementation of that purported authority, which changed by the day and wreaked havoc on capital markets and the economy, illustrates both the breadth of powers that the President claims and the danger of unlimited authority in this domain,” they warned in court papers.
The legal challenge to Mr. Trump’s tariffs is likely to be one of several involving the president’s second-term policies that the Supreme Court takes up. Other cases involving his immigration policies and efforts to remove members of independent agencies have progressed through the lower courts, and the Trump administration is likely to seek Supreme Court review of decisions against it.
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