On Wednesday, the Supreme Court will hear arguments challenging Trump’s tariff measures, implemented under the 1977 International Emergency Economic Powers Act (IEEPA). Several states argue that many of these import duties are illegal and must be rescinded.

If the Court rules against Trump, the consequences would be significant: tariffs announced in April, covering goods from nearly every major trading partner, could be invalidated, and billions collected in import duties may need to be returned.

Trump Frames The Stakes

Trump has portrayed the case as a critical test of U.S. strength. He warned that a loss could constrain trade negotiations and threaten national security. Although he will not attend the hearing in person, he said:

“I wanted to go so badly… I don’t want to do anything to distract from the importance of this decision. This isn’t about me; it’s about our country.”

Trump has also cautioned that failure could weaken the U.S. and create “financial chaos” in the years ahead.

Impact on Businesses

U.S. companies are already feeling the strain. Learning Resources, a seller of imported toys, estimates the tariffs will cost $14 million this year—seven times what it spent on tariffs in 2024. CEO Rick Woldenberg said production has been altered on hundreds of products, causing “incredible disruption.”

Similarly, Cooperative Coffees, a Georgia-based cooperative importing from over a dozen countries, has paid around $1.3 million in tariffs since April. Co-founder Bill Harris explained:

“We hope this will be declared illegal, but we are preparing for the possibility that it may not be.”

A Test of Presidential Authority

At the heart of the case is the question of how far a president’s trade powers extend. Legal analysts warn that predicting the Court’s ruling is difficult, but a favorable outcome for Trump could expand executive authority for future administrations.

The tariffs were imposed under IEEPA, which allows the president to act quickly in economic emergencies. Initially applied to goods from China, Mexico, and Canada, the law enabled Trump to bypass longer legislative processes. In April, tariffs were extended globally, ranging from 10% to 50%, with Trump citing the U.S. trade deficit as an “extraordinary and unusual threat.”

Constitutional Challenges

Opponents argue that while the law grants some trade powers, the Constitution reserves tariff authority for Congress. More than 200 members of Congress, including Democrats and Republican Senator Lisa Murkowski, filed briefs urging the Supreme Court to limit the president’s ability to use tariffs as a negotiation tool.

Recently, the Senate made a symbolic bipartisan move, passing resolutions rejecting Trump’s tariffs, including one aimed at ending the declared national emergency.