Supreme Court IEEPA Ruling on Trump Won’t End All Tariffs, Experts Assert
Trade experts assert that high tariffs on American trading partners are likely to continue, despite potential rulings from the Supreme Court regarding President Trump’s use of the International Emergency Economic Powers Act (IEEPA). During a recent hearing, justices expressed skepticism about Trump’s invocation of this federal statute to impose broad tariffs on numerous countries.
Implications of the Supreme Court IEEPA Ruling
Experts believe that even if the Supreme Court rules against Trump, the administration will still have alternative legal frameworks to maintain elevated tariffs. Ted Murphy, co-leader of the global arbitration, trade, and advocacy practice at Sidley Austin, noted that Trump may utilize other legal tools to sustain high import duties.
- Section 232 of the Trade Expansion Act of 1962: This provision allows the president to impose tariffs for national security reasons.
- Section 301 of the Trade Act of 1974: This section requires the Department of Commerce to investigate unfair trade practices by foreign partners.
Murphy emphasized that, should the Supreme Court negate the IEEPA tariffs, the U.S. would still operate in a high-tariff environment under these other provisions. However, the processes for implementing tariffs through Sections 232 and 301 are more complex than those under IEEPA and may take longer to execute.
Economic Impact and Potential Refunds
Experts warn that a negative ruling against Trump could have significant financial implications. The U.S. government may need to reimburse billions to businesses affected by the IEEPA tariffs, which have accumulated to nearly $89 billion paid by importers through August, according to U.S. Customs and Border Protection data. Rick Woldenberg, CEO of Learning Resources, a plaintiff in the Supreme Court case, has expressed a desire for refunds due to the financial burden imposed by the tariffs.
The current average tariff rate in the U.S. stands at 18%, the highest seen since 1934, as reported by the Yale Budget Lab. Grace Zwemmer, an economist at Oxford Economics, cautioned that a court ruling against Trump could create further uncertainty in trade policy, impacting hiring and business investments.
Looking Forward
The White House has yet to comment on Trump’s potential reliance on alternative legal avenues for tariffs, should the Supreme Court rule adversely on IEEPA. Meanwhile, U.S. Secretary of the Treasury Scott Bessent expressed confidence in Trump’s emergency powers, suggesting that he anticipates a favorable ruling for the president. Experts expect a decision early next year, which will shape the future of U.S. trade policies and tariffs.
