US Supreme Court appears skeptical of Trump tariff legality

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WASHINGTON: A majority of US Supreme Court justices appeared deeply skeptical about the legality behind Donald Trump’s tariffs as they heard a landmark case on Wednesday that could uphold the president’s economic agenda.

Billions of dollars in customs revenue and a key lever in Trump’s trade wars are at stake as a conservative-dominated panel once again struck down the Republican’s efforts to expand presidential powers.

Nine high court judges have considered Trump’s use of emergency powers to impose “reciprocal” tariffs on nearly every U.S. trading partner, as well as to target Mexico, Canada and China for their alleged roles in the illegal flow of drugs.

In the more than two-and-a-half-hour hearing, with three liberals, several conservative justices questioned whether Trump had invoked the authority to impose tariffs that the International Emergency Economic Powers Act (IEPA) requested.

“This statute does not use the word revenue,” said Chief Justice John Roberts, “and to impose a revenue is to impose a tax, which has always been a “fundamental power of Congress.”

The justices tried to clarify whether to give Congress express authority for policies with significant economic or political consequences.

Solicitor General John Sawyer, arguing on behalf of the Trump administration, said it did not apply because of the president’s inherent, broad powers.

“President Trump determined that our exploding trade deficit has brought us to the brink of economic and national security collapse,” Sawyer said.

Sower tried to frame the issue as the power to regulate foreign trade—including the ability to impose tariffs—rather than the power to tax.

Justice Sonia Sotomayor, a liberal, noted that the power to tax is “a congressional power, not a presidential power.”

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

‘Simply incomprehensible’

Justice Neil Gorsuch, a Trump appointee, questioned whether Congress could reclaim the power after handing him the presidency, suggesting that “as a practical matter in the real world, it may never get that power back.”

Neil Cutial, representing small businesses challenging Trump’s tariffs, charged that it was “simply inconceivable” that in enacting IEPA, Congress gave the president “authority to rehabilitate the entire tariff system and the American economy in the process.”

He said that the word “regulate” has not even been used to impose tax.

But if Trump’s rates were struck down, Justice Amy Coney Barrett said it could be “messy.”

The court’s decision, which could take months to reach, does not concern the sector-specific tariffs that Trump has separately imposed, including steel, aluminum and automobiles.

Trump has raised the average effective tariff rate to its highest since the 1930s, and has repeatedly warned of doom if the duties are lifted.

A lower court ruled in May that it had exceeded its authority, ultimately paving the way for the case to go to the Supreme Court.

Trump did not attend Wednesday’s hearing, but several top officials did, including Treasury Secretary Scott Besant and US Trade Representative Jameson Greer.

“In recent years, the court has been reluctant to overrule presidential decisions of this magnitude,” ING analysts said.

But the outcome is hard to predict, he added, adding that “keeping Trump’s rates will shift the balance of power from Congress to the president.”

Josh Lipsky of the Atlantic Council noted that while the justices also faced skepticism, they seemed concerned about drawing conclusions from eliminating rates.

“How do refunds work?” Lipsky asked. “What does this mean for the president’s ability to negotiate foreign policy deals?”

While Trump’s tariffs have not sparked widespread inflation, companies say they have led to higher import costs.

Lawyers noted that if the high court finds Trump’s global tariffs illegal, the government could tap other laws to temporarily impose the 15 percent duty while pursuing more permanent tariffs.

Countries that already have agreements with Trump may not prefer to reopen negotiations.