Joshua Villanueva is JURIST’s Washington, DC Correspondent and an LL.M. candidate in National Security and U.S. Foreign Relations Law at The George Washington University Law School.
The US Supreme Court heard over two-and-a-half hours of oral argument Wednesday in a closely watched case testing whether the President may use emergency economic powers to impose tariffs absent explicit congressional authorization. The argument drew significant political and institutional attention, with multiple members of Congress in attendance, including Senators Amy Klobuchar (D-MN) and Ed Markey (D-MA), and Representative Jason Smith (R-MO). Among those from the Trump administration in attendance were Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and US Trade Representative Jamieson Greer.
The courtroom atmosphere was animated from the outset. All nine justices appeared highly engaged. Even Justices Thomas and Alito, who often maintain reserved demeanors during arguments, leaned forward and pressed counsel.
Solicitor General D. John Sauer argued on behalf of the federal government and opened by invoking national-security emergencies declared by former President Trump related to “exploding trade deficits” and fentanyl importation. Sauer repeatedly asserted that the International Emergency Economic Powers Act (IEEPA) provides “sweeping and unqualified” authority to “regulate importation,” which he argued includes tariffs as a “core application” of the foreign-commerce power.
Sauer’s breathless, meandering delivery soon drew interjections from the bench, as justices repeatedly urged him to slow down. His agitated, circular responses left the Court visibly puzzled, and by the time he returned for rebuttal, the room’s energy had evaporated. The justices appeared drained, and Thomas and Alito leaned back, gazing upward, while several heads turned as Senator Klobuchar quietly slipped out before Sauer could even begin his rebuttal.
Supreme Court signals skepticism of Trump’s tariffs under IEEPA
The cases challenge Trump’s series of executive orders in February, which imposed tariffs, stating that large trade deficits posed an “unusual and extraordinary threat” to US national security and the economy. This includes the April 2 “Liberation Day” program, which set country-specific duties between 10% and 50% on most imports and separate duties aimed at pressuring Canada, Mexico, and China on fentanyl trafficking. A ruling against the Administration could require large refunds to US importers and remove a go-to presidential tool for economic coercion in future crises, though officials say some duties might be replicable under other trade statutes that explicitly reference tariffs.
A taxing power by another name?
Several conservative Justices framed the case as one about who decides when Americans pay what is, in practical effect, a tax. Chief Justice Roberts noted that imposing tariffs at any rate on any product for any duration “seems like . . . major authority” and flagged that, historically, “imposition of taxes on Americans . . . has always been the core power of Congress”—a signal that the major-questions lens and separation-of-powers concerns are front and center in this case. The Court invoked that lens in recent Terms to require clear congressional authorization for economically momentous actions.
Justice Gorsuch pressed the nondelegation angle, asking what limits would remain if “regulate importation” authorizes the President to impose tariffs whenever he declares an emergency. Justice Barrett drilled into the text, asking for any other statute or historical example where the phrase “regulate importation” alone has been read to confer tariff-imposing power. Sauer pointed to none. At one point, an annoyed Justice Sotomayor interrupted Sauer’s answer to Justice Barrett, saying, “Could you just answer the Justice’s question?”
The government’s reply: tariffs as regulation, not revenue
Sauer maintained that these are regulatory tariffs. These were tools to change behavior, not to raise money. He also invoked the Court’s deference to executive foreign-affairs measures in Dames & Moore v. Regan (upholding the President’s resolution of claims with Iran amid congressional acquiescence) as support for robust emergency tools in the international arena (executive foreign-affairs measures sustained where Congress had long acquiesced in similar practices). A few minutes into Sauer’s argument, Chief Justice Roberts cut in with visible surprise. Sauer had already cited Dames & Moore three times, Roberts noted, even though the Court in that case “went out of its way to say that it was issuing a very narrow decision.” Roberts read directly from the opinion, emphasizing that decisions in this area have been “rare, episodic, and afford little precedential value,” that the Court would “lay down no general guidelines” and would “confine the opinion only to the very questions necessary,” and that it “re-emphasize[d] the narrowness of our decision.” And then came the pointed turn: Dames & Moore, Roberts stressed, involved “a different provision of IEEPA” and “certainly did not concern tariffs.” His conclusion was unmistakable: “I don’t quite understand how you can get as much out of Dames & Moore as you’re trying to get.”
Sauer also leaned on trade-law history to argue that tariffs are a “quintessential” means of regulating imports. But challengers countered that when Congress means to let a President alter duties, it speaks clearly as it did in § 232 of the Trade Expansion Act, construed in FEA v. Algonquin SNG to allow license-fee exactions precisely because that statute was tariff-focused and directed the President to “adjust imports” (reading “adjust imports” within a tariff-centric statute to include license-fee exactions as a quantity-control tool). IEEPA, by contrast, contains no tariff language at all and is built around freezing, blocking, or licensing transactions and property flows.
“Shut it all down” vs. “a 1% tariff”
A central thread in Wednesday’s argument—what Justice Kavanaugh called the “donut hole” problem—came from Justices Barrett and Kavanaugh’s hypotheticals testing the limits of presidential authority under IEEPA. Justice Barrett asked bluntly whether the statute’s verbs would let the President “just shut down all trade between us and, say, China.” Oregon Solicitor General Benjamin Gutman, representing the state challengers, conceded: “Yes . . . there are other limitations in the statute, but yes.”
Barrett pressed further: “Doesn’t it seem—one of the points that Algonquin makes, and I think it’s a point Justice Kavanaugh was making—doesn’t it seem like it would make sense that Congress would want the President to use something that was less, you know, weaker medicine than completely shutting down trade as leverage to try to get a foreign nation to do something?”
Justice Kavanaugh picked up the thread: “Your interpretation of the statute would allow the President to shut down all trade with every other country in the world . . . but would not allow a 1 percent tariff . . . That doesn’t seem to have a lot of common sense behind it.” When Gutman answered that tariffs and embargoes involve “different kinds of power,” Kavanaugh quipped, “That’s a good one” after Gutman’s memorable response that it was “not a donut hole; it’s a different kind of pastry.”
Gutman explained that embargoes directly control whether trade occurs “it cedes control over whether the transaction occurs from the government to the individuals engaging in this transaction” while tariffs delegate that choice to private actors and simultaneously “add revenue to the Treasury,” a power “our framers thought was extremely important and a core Article I” function.
Justice Sotomayor grounded the distinction in first principles: “The Constitution is structured so that if I’m going to be asked to pay for something as a citizen, that it’s through a bill generated through Congress . . . I’m not going to be taxed unless both houses and the executive have made that choice.” Gutman agreed: “That’s exactly right.”
Justice Gorsuch closed the circle, tying the debate back to the founding: “The really key part of the context here . . . is the constitutional assignment of the taxing power to Congress. The power to reach into the pockets of the American people is just different and it’s been different since the founding.”
Put differently, as challengers argued and several justices appeared to agree, quotas, licenses, and blocks control flows of goods, while tariffs tax Americans. Embargoes fit naturally within IEEPA’s language of “blocking” and “freezing.” Tariffs, by contrast, occupy Congress’s domain. That divide, between control and taxation, may prove decisive in how the Court ultimately defines “regulate importation.”
Text, structure, and Youngstown
Multiple justices returned to the same textual hinge: § 1702(a)(1)’s authorization to issue “instructions, licenses, or otherwise . . . regulate . . . importation.” Several justices, especially Justice Barrett, pressed whether that language naturally covers freezing and licensing transactions—IEEPA’s bread-and-butter—or also stretches to tariff exactions that raise revenue. IEEPA speaks in the language of blocking and freezing property and transactions, not taxing. When Congress does want presidents to adjust duties, the Court noted, trade statutes typically say “tariff,” include explicit limits, and build in procedural checks.
A number of justices referenced the Youngstown approach: when Congress has not clearly conferred the precise power claimed, presidential authority is at its “lowest ebb,” and courts demand a tight fit to statutory text and historical practice. If IEEPA’s text reads as a freeze-and-block tool, the challengers argued, emergency tariffs sit outside the grant.
As the justices pressed both sides, two fault lines emerged to define the argument. The first was what Congress meant by “regulate importation.” Several justices framed a narrow reading—tools like licenses, quotas, and blocking transactions—which would sink the tariff program outright. Neal Katyal, former Principal Deputy Solicitor General during the Obama administration and counsel for the private parties in this case, drove home the textual point: “IEEPA is a sanctions statute, not a tax statute where Congress gave away the store. Congress knows exactly how to delegate its tariff powers. Every time for 238 years, it has done so explicitly, always with real limits. IEEPA looks nothing like those laws. It uses the word ‘regulate,’ which Congress has used hundreds of times, but never once to include tariffs.”
Others explored a broader reading that could include emergency tariffs, but only with guardrails: short duration, tight tailoring to the emergency, and not designed to raise revenue for its own sake. Katyal answered the government’s pushback that Congress need not utter magic words by clarifying, “Our position is not that you have to use the word ‘tariff’ or any other magic word.” Congress could speak clearly, even using “regulate,” for example, by saying, “The President may regulate importation by requiring importers to pay 10 percent of the value of goods to the Treasury. So I don’t think you have to use any particular word.”
The administration leaned heavily on the Supreme Court’s Algonquin decision, which approved presidential monetary exactions under a trade statute. But that precedent may cut against them here: Algonquin turned on tariff-centric text embedded in a trade law that contemplated adjusting duty rates; by contrast, IEEPA never mentions tariffs. Katyal’s bottom line matched several justices’ intuition: when Congress wants to give tariff tools, it knows how to say “tariff” or otherwise speak with clarity.
Looking Ahead
The justices’ questions left little doubt that this case could mark a defining moment for the limits of presidential emergency powers. If the Court reads IEEPA narrowly as a tool for freezing assets and blocking transactions, it would not only invalidate Trump’s tariffs but also reinforce a line between economic regulation and taxation that runs deep in the constitutional structure. Several justices, including Chief Justice Roberts and Justice Gorsuch, seemed intent on reasserting that tariffs are a form of taxation and therefore belong to Congress unless Congress unmistakably delegates that power. Any majority opinion will likely recognize that the president can block trade entirely but not condition it on revenue-generating duties.
Given the case’s accelerated schedule, a decision could come before year’s end. However it lands, the ruling will shape not only Trump’s tariff policy but also how far future presidents of either party can stretch “emergency” statutes to reach powers the Constitution assigns elsewhere.
