Victor Owen Schwartz, president of VOS Selections, a wine and spirits importer and distributor based in New York City. Schwartz is one of the small business owners challenging President Donald Trump's tariffs.
Trump's tariffs to face Supreme Court scrutiny

WASHINGTON − President Donald Trump's expansive view of presidential powers is getting its first major test at the U.S. Supreme Court.

The justices on Nov. 5 will consider whether Trump has the authority to impose sweeping tariffs on nearly every product imported into the United States.

The tariffs are the centerpiece of Trump’s economic agenda and a major foreign policy tool. But they've also increased costs for businesses and consumers. And they've raised questions about whether Trump has unconstitutionally taken from Congress the key power to raise revenue.

Here's what you need to know about the case, the biggest the court has agreed to hear so far this term.

Who is challenging the tariffs?

Trump’s tariffs are being challenged by multiple small businesses and by a dozen states with Democratic attorneys general.

The businesses include an Illinois-based company that sells educational toys and a wine-importing company based in New York City. Learning Resources, which makes a majority of its toys in China, says the tariffs could cost the company $100 million this year, compared with the $2.3 million in import fees it paid last year.

The states suing are: Oregon, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, and Vermont. Their attorneys general say the tariffs have “wreaked havoc on capital markets and the economy,” and raised the cost of goods the states purchase.

What tariffs are being challenged?

Two types of tariffs Trump imposed since beginning his second term are being challenged. One set is the reciprocal tariffs the president imposed on almost all goods imported into the U.S. to address the trade deficit. He’s said those import fees will raise billions of dollars for the government and bring manufacturing back to the United States.

The other tariffs at issue are the fees imposed on imports from Mexico, Canada and China that Trump is using as leverage to get those countries to do more to stop fentanyl from coming into the U.S.

Why are the tariffs controversial?

Trump is the first president to try to use a 1977 law, the International Emergency Economic Powers Act, to impose broad tariffs, a move that sidesteps a more complex and limited tariffs process set in other laws.

The IEEPA allows presidents to “regulate…importation or exportation” of “property in which any foreign country or a national thereof has any interest” in order “to deal with an unusual and extraordinary threat” to the nation.

It's typically been used to freeze a foreign countries' assets in the U.S. or to completely block trade with a country. For example, President Jimmy Carter used IEEPA to freeze Iranian government assets to try to win the release of 52 Americans during the 1979 Iranian hostage crisis.

What do the challengers say?

The challengers argue Trump is stretching the word “regulate” beyond its plain meaning. There’s no indication that Congress intended to give presidents such expansive taxing authority, they say. And the Supreme Court has said in recent years the executive branch can’t take actions with a major economic or political impact without clear authorization from Congress.

"Indeed, if `regulate' meant `tax,' the President, empowered by a supercharged U.S. Code, could taxeverything from autos to zoos," lawyers for some of the businesses argued in a filing.

Even if that’s what lawmakers intended, they contend, granting a president that much power over a form of taxing – a responsibility the Founding Fathers gave to Congress – is unconstitutional.

The challengers also argue that trade deficits, which the nation has run since 1975, don't qualify as an emergency that could trigger IEEPA.

What is the Trump administration's position?

The administration argues that because the IEEPA gives presidents the power to block imports from a country, it must also allow him to tax imports since that’s a less extreme form of “regulating” imports.

The administration also said Congress is allowed to delegate major authority to presidents to address emergencies – particularly those related to foreign affairs. Congress clearly did so in this case, the administration contends, and lawmakers still have oversight authority they can use if they think the president has gone too far. (Congressional Republicans have rejected Democratic lawmakers' attempts to intervene.)

Sustained trade deficits are an "economic and national-security" emergency because they have "fostered dependency on foreign rivals and gutted American manufacturing," the Justice Department told the court in a filing.

"If a President was not able to quickly and nimbly use the power of Tariffs, we would be defenseless, leading perhaps even to the ruination of our Nation," Trump said in a social media post.

How did the lower courts rule?

Three courts have sided with the challengers, although the U.S. Court of Appeals for the Federal Circuit was divided.

Four of the seven appeals court judges said the IEEPA doesn’t allow tariffs. Three judges said the law allows presidents to impose some tariffs but not those as sweeping as Trump’s. And four said tariffs are a valid use of the law.

How is the Supreme Court likely to rule?

Experts say the case sets up a possible clash between conservative positions.

The Supreme Court, which has a 6-3 conservative majority, has favored giving the president broad executive authority, especially in areas that touch on national security or foreign affairs. But the court has also been receptive to conservative arguments that Congress can’t give too much of its power to the executive branch. And when it does give substantial decision-making authority, it must do so clearly. That was the basis for the court’s rejection of some of President Joe Biden’s policies that he justified because of “emergencies.”

How has the Supreme Court ruled on other Trump policies?

This is the first time a challenge to a policy Trump enacted in his second term is getting a full hearing at the Supreme Court. Until now, the justices have issued interim decisions about whether Trump’s policies can remain in effect as they’re being litigated. In those case, Trump has been overwhelmingly successful.

Will Trump attend the oral arguments?

The president had said he might make history as the first sitting president to attend a high court hearing because the case is so important. But he later ruled out an appearance, telling reporters on Nov. 2 that he does not "want to do anything to deflect the importance" of the decision.

Instead, Treasury Secretary Scott Bessent will attend. Bessent told Fox News his appearance will "emphasize that this is an economic emergency."

When is a decision expected?

While the Supreme Court can take months to decide its biggest cases, they may try to rule faster on the tariffs. That’s in part because the longer they’re in place, the more money the government will collect that it may have to refund. The justices are also aware that the uncertainty about the tariffs is making it hard for affected businesses to plan.

Does Trump have a backup plan?

If the Supreme Court rules against Trump, there are other laws he can use to impose tariffs. But those require a more detailed process, can be used in more limited circumstances and would eliminate some of the uncertainty for businesses by giving them notice of what’s coming.

How have the tariffs affected businesses and households?

Trump has argued that countries wanting to sell their goods to Americans will absorb the import taxes to remain in the world’s largest consumer market.

But independent analysts, including at Goldman Sachs and S&P Global, have estimated U.S. consumers and businesses are shouldering much of the cost.

The Tax Foundation, a nonprofit think tank, estimates the tariffs amount to an average tax increase of $1,300 per household in 2025.

What does the public think?

Six in 10 Americans disapprove of the tariffs, according to an August survey by the Pew Research Center.

Majorities of Americans think the long-term effects will be mostly negative both for the country (55%) and for themselves and their families (55%).

This article originally appeared on USA TODAY: Supreme Court takes up first major test of Trump's presidential powers in tariffs case

Reporting by Maureen Groppe, USA TODAY / USA TODAY

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