US Supreme Court skeptical of Trump tariffs

The TOI correspondent from Washington: In a marathon 2½-hour session that exposed fissures in the Trump administration's trade agenda, the US Supreme Court on Wednesday grilled lawyers over Trump tariffs imposed under a 1977 emergency powers law, with even conservative justices expressing skepticism over presidential powers in the matter.

Neal Katyal, the Indian-American litigator leading the case for small businesses, delivered a forceful defence of congressional primacy, earning praise from legal scholars even as justices from both ideological flanks voiced doubts about the policy's legality. The case, consolidated as Trump vs VOS Selections Inc. and Learning Resources, Inc. vs Trump, could redefine executive authority in an era of economic nationalism.


President Trump has warned several times that the case is a “matter of life and death” for the US and if the court ruled against his powers to tariff, “we could end up being a third-world country.” Countries and businesses across the world, not to speak of American business and industry, are watching the case -- many in person -- given its enormous import on global trade and commerce.

“If our country was not able to protect itself by using tariffs against tariffs, we would be ‘dead,’ with no chance of survival or success,” Trump said in one of several posts on the case which he once intended to attend personally but dropped the idea because it would be a distraction.

Katyal, a Yale Law School alum with over 50 Supreme Court arguments under his belt, opened with a stark declaration before the court: "Tariffs are taxes," and only the Congress is constitutionally empowered to impose them. Representing importers like VOS Selections, a family-run wine and spirits firm, and educational toy makers battered by rates up to 145% on Chinese goods, he argued the International Emergency Economic Powers Act (IEEPA) authorises embargoes and quotas, not revenue-raising levies.

"The founders gave that taxing power to Congress alone," Katyal said, invoking Article I of the Constitution and the nondelegation doctrine. He dismissed the administration's claim that IEEPA's "regulate importation" clause covers tariffs as "fanciful," noting no president from Reagan to Obama had ever wielded it in that manner.

The bench's reaction was a bipartisan fusillade, as it came down much harder on the government lawyer, solicitor general John Sauer, than on Katyal. Chief justice John Roberts, an institutionalist, zeroed in on IEEPA's silence on "tariff," observing Congress has spelled out such powers elsewhere. Justice Neil Gorsuch, a textualist skeptic of executive overreach, also pressed Sauer on a "one-way ratchet" where Congress couldn't reclaim authority, musing it "could swallow the Constitution." Both Roberts and Gorsuch are conservatives in a 6-3 supermajority that Trump has engineered.

Legal luminaries hailed Katyal's performance as a masterclass, with Yale's Akhil Amar, Katyal's mentor and constitutional giant, saying, "Neal channeled Madison – brilliant reclamation of Article I," while critics, including treasury secretary Scott Bessent, slammed it as "foundational misunderstandings" of trade goals.

Several business leaders were present in the packed courtroom with lines forming before proceedings opened. A ruling is expected in December or January. A Katyal win could void many 2025 tariffs, triggering refunds – a "logistical nightmare" that conservative justice Amy Coney Barrett reflected on. Administration boffins have warned that even if the court rules against Trump they have a “plan b” to impose tariffs.

The IEEPA duties, dubbed "Liberation Day" tariffs, have netted the US Treasury more than $ 100 billion, but critics say it is costing the average American household $ 1200 per year in increased prices. President Trump has rejected the estimates and insists that prices of essential goods and groceries have actually come down.

On Thursday, he pointed to WalMart lowering its packaged Thanksgiving dinner for ten by 25 percent (to $ 40) to make his point.