Supreme Court Tests Trump's Tariff Power in Constitutional Showdown

Trump Admits U.S. Consumers Pay Tariffs as Supreme Court Weighs Legal Challenge

President Donald Trump has acknowledged for the first time that American consumers are bearing the brunt of his sweeping tariff policies, a reversal of his long-held stance that foreign nations are footing the bill, Reuters reported. During a press encounter in the Oval Office, Trump conceded that while the tariffs have generated significant revenue and secured trade concessions, they have also led to higher prices for goods purchased by U.S. households. "When you take the overall impact, the Americans are gaining tremendously," Trump said, though he maintained that the policy's benefits outweigh its costs.

The admission comes as the Supreme Court prepares to rule on the legality of Trump's use of the International Emergency Economic Powers Act (IEEPA) to justify tariffs on imports from nearly all countries, BBC coverage noted. The justices expressed skepticism during a November 5 hearing, with Chief Justice John Roberts and others questioning whether the 1977 law grants the president authority to impose tariffs—a power explicitly reserved for Congress under the Constitution. Trump's administration has defended the tariffs as necessary to address trade imbalances and national security threats, but critics argue the move represents an overreach of executive power.

The case, brought by a coalition of small businesses and states, challenges the administration's assertion that IEEPA allows for unlimited tariff authority, the Chicago Tribune reported. Learning Resources Inc., a Vernon Hills-based toy manufacturer, argued in court that the tariffs have imposed "existential threats" on its operations, adding $12 million in costs in 2025 alone.

The company, along with others, contends that the IEEPA does not authorize tariffs and that the president's actions violate the Constitution's foreign commerce clause. Lower courts, including the Court of International Trade, have already ruled against Trump, deeming the tariffs unconstitutional and a misuse of emergency powers.

If the Supreme Court strikes down the tariffs, the administration has hinted at a "Plan B" to maintain its trade agenda, Newsweek reported. Options include leveraging existing statutes like Section 301 of the Trade Act of 1974, which allows tariffs against countries engaging in "unreasonable" trade practices, and Section 232 of the Trade Expansion Act of 1962, which permits tariffs for national security reasons. White House officials have also cited Section 338 of the Tariff Act of 1930 as a potential tool, though its use would likely face legal challenges. Treasury Secretary Scott Bessent has emphasized that the administration is prepared to shift legal frameworks to keep tariffs in place.

The economic stakes are high. Forbes estimates that companies like Walmart, Samsung, and Target could receive refunds for tariffs paid if the Supreme Court rules against Trump. Meanwhile, consumers face the possibility of recouping price hikes driven by tariffs, though legal experts caution that refunds would require complex administrative processes. The Tax Foundation notes that tariffs have added an average of $1,200 per household to annual expenses in 2025.

The White House remains confident in its legal position, with aides describing the case as "a pretty clear" victory, according to Politico. However, internal discussions acknowledge that alternatives to IEEPA are narrower and slower to implement. For example, Section 232 investigations, which focus on national security, could delay new tariffs by months. Additionally, Trump's recent trade truce with China—reducing tariffs on Chinese goods to 30%—may complicate efforts to reimpose duties without diplomatic fallout.

Legal scholars warn that a ruling upholding Trump's use of IEEPA could set a dangerous precedent, allowing future presidents to bypass Congress on major policy issues, the Brennan Center for Justice argues. The center says the case tests whether emergency powers will become a routine tool of governance, eroding constitutional checks and balances. Conversely, a decision striking down the tariffs would reaffirm Congress's role in trade policy and limit presidential overreach.

In a separate move, Trump recently signed an executive order reducing fentanyl-related tariffs on China to 10% as part of a trade deal with President Xi Jinping, Investing.com reported. The agreement also includes commitments from China to curb illicit drug exports and increase purchases of U.S. agricultural goods. However, the broader legal battle over his tariff authority remains unresolved, with the Supreme Court's decision expected in early 2026.