In only a few days, the Supreme Court will begin listening to arguments in what President Donald Trump is asking “one of the most important cases in the history of our country.”
With the bulk of his tariffs — arguably the cornerstone of his whole financial agenda — in jeopardy, he has floated an unprecedented look at the nation’s highest court docket.
The case will think about whether or not Trump had the authorized authority to impose tariffs by citing a regulation often called the International Emergency Economic Powers Act (IEEPA).
Trump used these powers to push import tax charges as excessive as 50% on key buying and selling companions together with India and Brazil and as high as 145% on China earlier this 12 months.
A ruling in opposition to the president doesn’t imply the sudden cancellation of all tariffs in place, however the final result may radically reshape Trump’s financial technique.
Here’s what’s riding on the Supreme Court’s choice:
As of September 23, American companies have paid practically $90 billion to cowl the IEEPA tariffs being challenged, in accordance with US Customs and Border Patrol knowledge. That’s greater than half of the tariff income the nation collected throughout the 2025 fiscal 12 months, which ended on September 30.
Earlier this month, Trump stated in an interview with Fox Business that if the Supreme Court dominated in opposition to him, “we’d have to pay back money” and reimburse corporations for the billions of {dollars} they’ve already paid.
While the case performs out — and it may go on for a number of months — companies might want to maintain paying IEEPA tariffs, so the sum of potential refunds will continue to grow.
However, it might not be a simple or fast course of for companies to get refunds. It’s additionally unclear if all companies which have paid these tariffs would qualify for a refund. The justices would doubtless make such determinations in the event that they in the end render Trump’s IEEPA tariffs unlawful, commerce attorneys told NCS.
The menace of immediately imposing greater tariffs is a key tool Trump has used to stress international locations into coming into commerce agreements and, in some circumstances, signing offers with the United States. In trade, buying and selling companions have dedicated to rising purchases of American items and rising their investments in American companies on high of decreasing tariffs on American exports.
But all that could possibly be jeopardized if the Supreme Court sides in opposition to Trump.
“The IEEPA tariffs have been the basis for countries to reach agreements with the United States, and it is unknown what happens if the IEEPA tariffs no longer can be imposed,” Dave Townsend, a companion in Dorsey & Whitney’s International Trade Group, stated in a observe final week.
“Presumably, the Trump Administration will claim that nothing changes, and that the agreements remain valid,” he added. But it may actually incentivize buying and selling companions to strive to return to the drawing desk with Trump, aiming to get higher preparations. It may even empower some international locations to impose their very own retaliatory tariffs on American exports till their very own border taxes are lowered.
US presidents have all the time had an extensive menu of tariffs to impose. But Trump has primarily used two in his second time period: the IEEPA tariffs and Section 232 tariffs, which give the president the authority to impose greater tariffs on nationwide safety grounds.
Section 232 tariffs can solely be used to focus on particular trade sectors, and require an investigation by the Commerce Department. Trump has used Section 232 this 12 months to boost border taxes on autos, auto elements, metal, aluminum, copper and furnishings, amongst others. He’s additionally initiated a number of ongoing investigations that would lead to greater levies on a slew of different items.
Trump will retain the skill to impose these tariffs in addition to a number of others irrespective of how the Supreme Court guidelines. But none of these will permit him to alter import duties with the flick of a change, as he has achieved with IEEPA.