Court to Determine if IEEPA Tariffs Violate Congressional Authority

The U.S. Supreme Court is set to weigh in on a landmark challenge to President Donald Trump's use of emergency powers to impose sweeping global tariffs, with a 61% chance of defeat according to betting markets. The case, consolidated under Learning Resources Inc. v. Trump and Trump v. V.O.S. Selections Inc., will test whether the International Emergency Economic Powers Act (IEEPA) grants the president authority to levy tariffs—a power the Constitution explicitly reserves for Congress, a Newsweek report says. The outcome could reshape Trump's economic strategy, affect $90 billion in collected tariff revenue, and redefine the balance of power between the executive and legislative branches.

The stakes are immense. As of September 23, U.S. businesses had paid nearly $90 billion in IEEPA tariffs, accounting for over half of the country's 2025 fiscal year tariff revenue, the Yahoo Finance piece noted. Trump has warned that a ruling against him would require repaying these funds, though legal experts say refunds would be complex and uncertain, according to the same report. For small businesses like Learning Resources Inc., a Chicago-based toymaker, the tariffs have been catastrophic: the company faced a $50,000 penalty after a shipment of educational toys arrived six hours too late to avoid a 50% tariff hike on Indian imports, as detailed in a Bloomberg feature. "We're sort of like itinerant refugees in how we make our products," said CEO Rick Woldenberg, whose companies sued to invalidate the tariffs as exceeding presidential authority, Bloomberg reported.

Legal scholars and former officials argue that IEEPA, enacted in 1977 to combat foreign threats via financial sanctions, was never intended to authorize tariffs, according to a CBS News article. "The reason Trump likes IEEPA is because it requires no process, no investigation—just a declaration of emergency," said attorney Alan Meyer in that coverage. Critics contend this bypasses Article I of the Constitution, which grants Congress exclusive power to regulate commerce, a point raised by the Newsweek piece. The Trump administration, however, defends the tariffs as essential for national security, citing threats like fentanyl trafficking and reliance on Chinese rare earth elements, as described in a DiscoveryAlert article. Treasury Secretary Scott Bessent framed the tariffs as a response to China's export restrictions on critical minerals used in defense and clean energy technologies, the DiscoveryAlert piece added.

The court's decision could set a precedent with far-reaching implications. A ruling against Trump would curtail his ability to use tariffs as a diplomatic tool, forcing future administrations to rely on statutes with stricter procedural requirements, according to a Yahoo Finance analysis. Conversely, upholding the tariffs could embolden presidents to invoke emergency powers more broadly, potentially reshaping U.S. trade policy for decades, a Barron's column argues. The case also intersects with broader debates over the "Major Questions Doctrine," which holds that Congress must clearly authorize major regulatory actions, as discussed in a Forbes analysis.

With the Supreme Court's conservative majority and a 61% probability of striking down the tariffs, the outcome remains uncertain. Trump, who initially considered attending the November 5 oral arguments—a first for a sitting president—was reported to be weighing the move by a Mohave Daily News report but has since declined, as Bloomberg reported, stating, "It's not about me, it's about our country." Yet, the case is undeniably personal for the president, who has framed the tariffs as a cornerstone of his economic agenda. As Justice Department lawyer Peter Navarro declared, "This is arguably the single most important economic case in U.S. history," a quote cited in the Newsweek coverage.