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Supreme Court to weigh legality of Trump's sweeping tariffs in landmark case
The U.S. Supreme Court will hear arguments on Wednesday in a high-stakes challenge to former President Donald Trump's use of emergency powers to impose billions of dollars in global tariffs-a case that could reshape presidential authority over trade and force the government to refund billions collected from businesses.
The lawsuit, brought by small businesses and a coalition of states, argues that Trump's tariffs-enacted under the 1977 International Emergency Economic Powers Act (IEEPA)-are unconstitutional and exceed presidential authority. A ruling against the administration could dismantle tariffs imposed since April, which critics say have disrupted supply chains, inflated costs, and strained international trade relations.
Businesses bear the brunt as legal battle escalates
For companies like Learning Resources, a U.S. toy seller reliant on overseas manufacturing, the tariffs have triggered financial turmoil. CEO Rick Woldenberg told reporters the firm faces $14 million in tariff costs this year-seven times its 2024 bill-forcing it to relocate production for hundreds of products since January. "They've thrown our business into unbelievable disruption," he said.
Other firms, like Georgia-based Cooperative Coffees, have already paid $1.3 million in tariffs since April. Co-founder Bill Harris described the toll as "an energy drain like I've never seen," noting the co-op has taken on debt, raised prices, and accepted thinner margins. "It dominates all conversations and just sucks the life out of you," he admitted. While hopeful for a court victory, Harris said businesses are bracing for the tariffs to remain: "We're trying to prepare for this being the new normal."
Constitutional clash: Who controls tariffs?
The case hinges on whether the IEEPA-invoked by Trump to bypass Congress-grants the president unilateral power to impose tariffs. Opponents argue the law authorizes trade regulation, not taxation, and that only Congress can levy tariffs under the Constitution. Over 200 Democratic lawmakers and Republican Senator Lisa Murkowski filed a brief supporting this view, asserting Trump's actions undermine congressional authority.
Trump has framed the dispute as a matter of national security, warning a loss would "weaken" the U.S. and leave it in "a financial mess for many years." He declined to attend Wednesday's hearing, stating, "I don't want to deflect from the importance of that decision. It's not about me; it's about our country." The administration has previously used IEEPA to target China, Mexico, and Canada over drug trafficking, and later expanded tariffs globally, citing the U.S. trade deficit as an "extraordinary threat."
"Supplies have stabilized, but conservation remains essential."
White House statement, July 2025
Lower courts side with challengers
Three federal courts have already ruled against the administration. The Supreme Court's decision, expected by January but possibly delayed until June, could determine the fate of $90 billion in tariffs collected through September-roughly half of this year's revenue, per Wells Fargo. Trump officials warn refunds could balloon to $1 trillion if the case drags on, though businesses like Cooperative Coffees plan to seek reimbursements regardless.
Global ripple effects and uncertain outcomes
The case has already disrupted trade agreements, including a July pact with the European Union that hinges on 15% U.S. tariffs on European goods. John Clarke, a former EU trade director, said the European Parliament is "not going to act until they see the Supreme Court's outcome." In Switzerland, chocolatier Daniel Bloch called the 39% tariff on his exports "unsustainable," absorbing a third of the cost to avoid price hikes-erasing profits for his U.S. unit.
Legal experts remain divided. Greta Peisch, a former Biden trade lawyer, noted the court could rule narrowly, avoiding broader questions about emergency powers. Adam White of the American Enterprise Institute predicted the justices would strike down the tariffs but sidestep defining what constitutes a national emergency. Meanwhile, trade lawyer Ted Murphy emphasized the case's broader stakes: "This isn't just about the money. It's about whether a president can announce tariffs on Sunday that take effect Wednesday-no notice, no process."
What's next
The White House has signaled it would pivot to alternative legal avenues-such as a 150-day, 15% tariff authority-if the court rules against it. But businesses say even that would offer temporary relief, as such measures require formal notices and deliberation. "The bigger question," Murphy said, "is whether this kind of unilateral, rapid-fire tariff policy will be part of our future."
