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<\/p>\nHow the Supeme Court rules on President Trump’s tariffs could affect his agenda, the economy, the federal budget, presidential powers and costs for businesess and households.<\/p>\n
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Are Trump’s tariffs too big to fail at the Supreme Court?<\/p>\n
Reporter Maureen Groppe explains the significance of the tariffs case being heard at the Supreme Court that could define Trump’s presidency.<\/p>\n
WASHINGTON \u2013 As President Donald Trump<\/a> sees it, the Supreme Court<\/a> faces a stark choice when it considers on Nov. 5 whether to uphold<\/a> the sweeping tariffs he\u2019s imposed on nearly every product brought into the United States.<\/p>\n Back the tariffs and the nation will have \u201cunprecedented success.\u201d<\/p>\n Strike them down and there will be \u201ccatastrophic consequences for our national security, foreign policy and the economy,\u201d the administration told the justices in its written briefs before Wednesday’s oral arguments.<\/a><\/p>\n More: <\/strong>President Donald Trump announces 10% increase in tariffs on Canadian products<\/a><\/p>\n While Trump\u2019s rhetoric may be unusually dramatic for a court filing, there\u2019s no question that the stakes are huge \u2013 for Trump\u2019s agenda, the economy, the federal budget, presidential power and for businesses and households that are bearing the brunt of the tariffs.<\/p>\n \u201cJust about every way you look at it, it\u2019s a big deal,\u201d said Daniel Walters, an expert on administrative law at Texas A&M University School of Law.<\/p>\n More: <\/strong>Trump says his tariffs will help American businesses. So why are they suing?<\/a><\/p>\n ‘Breathtaking assertion of power’<\/p>\n Trump has argued that trillions of dollars in new tariffs are needed to reduce persistent trade deficits, which he says<\/a> have hollowed out the nation\u2019s manufacturing base, undermined critical supply chains and allowed other nations to take advantage of the United States.<\/p>\n The businesses and states challenging the import fees say that they\u2019re doing more harm than good, including raising costs and uncertainty for consumers and businesses.<\/p>\n And they argue the president doesn\u2019t have the legal authority to take such expansive and consequential action.<\/p>\n \u201cThis is a breathtaking assertion of power,\u201d lawyers for some of the challengers told the high court in a filing.<\/a><\/p>\n More: <\/strong>Will the Supreme Court treat Trump’s tariffs like Biden’s policies?<\/a><\/p>\n Not unusual for Supreme Court to hear major economic cases<\/p>\n To be sure, it\u2019s not unusual for the Supreme Court to decide cases with big effects on the economy.<\/p>\n In 1935, the court narrowly upheld a change Congress made to contracts so that repayments couldn’t be requested in gold rather than dollars, notes legal historian Stuart Banner, author of the book “The Most Powerful Court in the World.”<\/p>\n Because President Franklin D. Roosevelt had recently devalued the dollar, a decision the other way would have increased most debts by 60%. The Roosevelt administration considered the case so significant that the president planned to disobey the court if the ruling came out differently, Banner said.<\/p>\n Michael McConnell, a Stanford Law School professor and one of the lawyers representing some of the businesses challenging the tariffs, said the first case he teaches in his constitutional law class is the court\u2019s 1952 ruling that President Harry Truman could not seize private steel mills to keep production going during the Korean War.<\/p>\n \u201cYou can scarcely imagine anything more important than, at a time of war, being able to have armaments,\u201d he said. \u201cAnd the Supreme Court said, `No, there is no authorization for that.’ And this is widely considered to be the Supreme Court\u2019s finest hour.\u201d<\/p>\n High court has considered cases central to a president’s agenda<\/p>\n Historically, it\u2019s also not unprecedented for the court to take cases as central to a president\u2019s agenda as the tariffs are to Trump\u2019s economic and foreign policy plans.<\/p>\n Matthew Fitzgerald, a partner at the law firm McGuireWoods who previously clerked for Justice Clarence Thomas, said the case reminds him of the court\u2019s rejection<\/a> of a challenge to President Barack Obama\u2019s health care initiative.<\/p>\n \u201cAnd there were justices on the court, even conservative-leaning justices, who were very wary of overturning a president\u2019s signature achievement on any sort of questionable ground at all,\u201d Fitzgerald said at a McGuireWoods event previewing the court’s term. \u201cI wonder if that same sort of impulse will play in here in Trump\u2019s favor.\u201d<\/p>\n But Alan Morrison, who teaches at George Washington University Law School, noted that \u2013 unlike Trump\u2019s tariffs \u2013 Obamacare was explicitly created by Congress through the Affordable Care Act. The Supreme Court would\u2019ve been taking on both the legislative and executive branches if it had struck down that measure.<\/p>\n \u201cThe law that Trump is relying on here is a law that was passed in 1977 and doesn\u2019t mention trade at all,\u201d Morrison said. “I can\u2019t think of anything where a president has claimed this level of power over the economy.\u201d<\/p>\n President’s emergency authority could be expanded<\/p>\n That 1977 law, called the International Emergency Economic Powers Act, has historically been used to impose economic sanctions and other penalties on foreign countries. But the administration contends that the authority the law gives presidents to \u201cregulate\u201d importation in response to an “unusual and extraordinary threat” to national interests includes the power to impose tariffs.<\/p>\n The U.S. Chamber of Commerce argues it defies common sense to think that Congress meant to give presidents such \u201cunprecedented authority to upend the domestic economy through taxation\u201d without directly saying so.<\/p>\n \u201cIn other words, the President urged the court to uphold his tariff decisions because of their vast economic and political significance,\u201d the influential business group wrote in a brief <\/a>opposing the tariffs. \u201cYet it is precisely that significance which demands an unambiguous authorization from Congress.\u201d<\/p>\n If the court doesn\u2019t agree, Trump could use the same law to impose excise taxes on many other things, including the transportation of goods, wire communications, bank transactions and more, said Peter M. Shane, an expert on the separation of powers at New York University.<\/p>\n \u201cHe could put excises on lots and lots and lots of things,\u201d Shane said. \u201cThat would be a very big deal.\u201d<\/p>\n And a decision in Trump\u2019s favor could also indicate how deferential the court will be to presidents in deciding when emergency powers can be triggered, said Walters at Texas A&M University School of Law.<\/p>\n \u201cIf this is expansively interpreted by the Supreme Court, that Trump is allowed to do this, it\u2019s not hard to imagine there would be other emergency statutes that would open up other things beyond economic regulations,\u201d he said.<\/p>\n A ruling against Trump would create a big budget hole<\/p>\n If the court rules against Trump, however, the administration might have to refund at least $90 billion in tariff revenues, according to\u00a0data<\/a>\u00a0from U.S. Customs and Border Protection. (The amount will grow the longer it takes the court to reach a decision.)<\/p>\n \u201cThat would create a lot of problems for the federal government,\u201d said Juscelino Colares, a trade expert at Case Western Reserve University. \u00a0\u201cThis is the biggest trade case ever, by orders of magnitude.\u201d<\/p>\n It could be a logistical problem, potentially subject to more litigation, and would also impact the federal budget.<\/p>\n In addition to paying back tariffs already collected, the government would not bring in about $2.2 trillion over the next decade that Republicans were counting on to pay for much of the cost of Trump\u2019s big tax and policy bill, according<\/a> to the nonpartisan Committee for a Responsible Federal Budget.<\/p>\n \u201cIt\u2019s a massive amount of money,\u201d said Marc Goldwein, the group\u2019s senior policy director.<\/p>\n Trump could use other, non-emergency laws to impose new tariffs, but that would take time and may also face challenges.<\/p>\n