Justices sharply question Trump tariffs in Supreme Court hearing

Donald Trump's extensive use of tariffs in the first nine months of his second term was sharply questioned during oral arguments at the Supreme Court on Wednesday.

Chief Justice John Roberts and Justices Amy Coney Barrett and Neil Gorsuch – three conservative jurists considered the deciding votes in the case – criticized U.S. Solicitor General John Sauer, who is representing the president's administration in the court.

They were joined by three liberal justices who also expressed skepticism about whether federal law — and the U.S. Constitution — gives the president the power to unilaterally set tariff levels on foreign imports.

“The justification is used to impose tariffs on any product from any country, in any quantity, for any period of time,” Roberts said.

If the court had ruled in Trump's favor in this case, Gorsuch asked, “What could prevent Congress from simply abdicating all responsibility for regulating foreign trade?”

He added that he was “struggling” to find a reason to believe Sauer's arguments.

Perhaps a testament to the complexity of the case, the hearing stretched out to almost three hours – far longer than the formal time allotted.

The case centers around a 1977 law, the International Emergency Economic Powers Act (IEEPA), which Trump's lawyers say gives the president the power to impose tariffs. Although the Constitution specifically gives Congress tariff powers, Trump argues that the Legislature has delegated “extraordinary” powers to him to bypass longer, more established procedures.

Sauer said the country faced unique crises that were “country-killing and unsustainable,” requiring emergency action by the president. He warned that if Trump's tariff powers were found illegal, it would expose the US to “relentless trade retaliation” and lead to “devastating economic and national security consequences.”

Trump first called for IEEPA in February to tax goods from China, Mexico and Canada, saying drug trafficking from those countries constituted an emergency.

He used it again in April, imposing tariffs of 10% to 50% on goods from almost every country in the world. This time, he said the US trade deficit, where the US imports more than it exports, poses an “extraordinary and unusual threat.”

These tariffs began to take effect in fits and starts this summer, while the US pushed countries to make “deals.”

Lawyers for the challenging states and private groups argue that while the IEEPA gave the president the authority to regulate trade, it does not mention the word “tariffs.”

Neal Katyal, speaking in defense of private business, said it was “implausible” that Congress “has given the President the power to overhaul the entire tariff system and the American economy in the process, allowing him to place and remove tariffs on any product from any country, at any time.”

He also questioned whether the issues cited by the White House, especially the trade deficit, constitute emergencies under the law.

Suppose America faced the threat of war from a “very powerful enemy,” asked Samuel Alito, another conservative justice. “Can the President, under this provision, impose a tariff to prevent war?”

Katyal said the president could impose an embargo or quota, but a tariff that raises revenue is too big a step.

For Sauer, this was the wrong choice. Presidents, he said, have broad powers over national security and foreign policy – powers that challengers want to undermine.

The key question may be whether the court will determine whether Trump's tariffs constitute a tax.

Several justices noted that the power to levy taxes—that is, to raise revenue—is expressly given to Congress in the Constitution.

Sauer's response was that Trump's tariffs were a means of regulating trade and that any revenue generated was “only incidental.”

Of course, Trump himself has boasted about the billions his tariffs have already brought in and how important this new funding stream is to the federal government.

The justices spent very little time asking questions about reparations or whether the president's emergency declarations were justified. Instead, they spent most of their time studying the IEEPA text and its history.

Sauer urged them to think of tariffs as a natural extension of other powers granted to the president by law, rather than as a tax. “I can't say that – it's a regulatory tariff, not a tax,” he said.

But this turned out to be a stumbling block for many judges.

“You want to say that tariffs are not taxes, but that’s exactly what they are,” Justice Sotomayor said.

Many appear to have been persuaded by business arguments and claims that tariffs, as a tax paid by American businesses, are fundamentally different from other types of statutory authority.

But not all.

Near the end of the hearing, Judge Kavanaugh expressed doubts about this, saying that giving the president the power to completely block trade but not impose a 1% tariff did not seem very “common sense,” suggesting that it left a gap similar to a donut hole.

“This is not a donut hole. It’s a different kind of baking,” Gutman responded, prompting chuckles from the crowd.

Treasury Secretary Scott Bessent, who attended the hearing, did not respond to the BBC's question about his thoughts on the hearing. Commerce Secretary Howard Lutnick, also in court, gave a thumbs up.

U.S. Trade Envoy Jamison Greer was in court along with Minnesota Sen. Amy Klobuchar, who said after arguments that based on the questions asked, she was “hopeful” the court would strike down the tariffs.

“I think these are very good questions,” she said, calling the tariffs an “unconstitutional power grab” by the president.

The hearings drew a full audience, with the press seated in extra seats behind the columns.

If a majority of the Supreme Court rules in Trump's favor, it will overturn the findings of three lower courts that have already ruled against the administration.

Wells Fargo analysts say the decision, whatever it is, will affect about $90 billion in import taxes already paid, about half of the tariff revenue the U.S. received this year through September.

Trump officials have warned that the amount could rise to $1 trillion if the court rules before June.

During oral arguments, Barrett questioned the recovery of such proceeds, wondering whether it would be “a complete mess.”

Katyal responded that small businesses could receive refunds, but larger companies would have to follow “administrative procedures.” He admitted it was “a very complex thing.”

In a statement Wednesday, spokeswoman Caroline Livett hinted that the administration was already considering other ways to impose tariffs if the Supreme Court rules against them.

“The White House always prepares for a Plan B,” she said. “It would be imprudent for the president’s advisers not to prepare for such a situation.”