Supreme Court Oral Arguments Signal Skepticism Toward Presidential Tariff Authority Under IEEPA

Highlights

• The U.S. Supreme Court appeared skeptical of the Trump Administration's claim to broad tariff authority under the International Emergency Economic Powers Act (IEEPA) during nearly three hours of oral argument on Nov. 5, 2025.
• Justices across the ideological spectrum questioned whether IEEPA, long regarded as the cornerstone of U.S. sanctions policy, also authorizes the imposition of sweeping tariffs, a power that traditionally falls to the U.S. Congress under Article I of the U.S. Constitution.
• The "major questions" and "non-delegation" doctrines, both aimed at preserving the constitutional separation of powers, featured prominently in the Court's questioning. Several justices emphasized the need for a clearer statement of congressional intent before allowing the executive branch to wield such expansive tariff authority.

The U.S. Supreme Court heard oral argument on Nov. 5, 2025, on whether the International Emergency Economic Powers Act (IEEPA) authorizes the Trump Administration's executive orders (EOs) imposing two sets of tariffs: 1) tariffs tied to fentanyl trafficking and illegal immigration, targeting imports from China, Canada and Mexico, and 2) broadly applied "reciprocal" tariffs on imports from most countries, justified by persistent trade deficits and alleged threats to national security and the economy.

These measures were challenged by small businesses and a coalition of states, and the lower courts concluded that IEEPA does not authorize such expansive tariff powers. The U.S. Court of Appeals for the Federal Circuit affirmed but stayed its ruling pending Supreme Court review, which the administration sought on an expedited basis. (See Holland & Knight's previous alert, "Court of Appeals Strikes Down IEEPA Tariffs, Setting Stage for Supreme Court Ruling," Sept. 9, 2025.)

Key Issues

• The Supreme Court justices repeatedly pressed the U.S. government, represented by the solicitor general, to identify explicit statutory language in IEEPA that authorizes the president to impose tariffs. Although the statute empowers the president to "issue ... instructions, licenses or otherwise," to "investigate, regulate or prohibit" imports" of "property in which any foreign country or a national thereof has any interest" during a declared national emergency, it does not mention "tariffs," "duties" or "taxes."
• Several justices underscored that the power to impose tariffs is fundamentally a power to tax, which is reserved to the U.S. Congress under Article I, Section 8 of the U.S. Constitution. Justice Sonia Sotomayor and Chief Justice John Roberts both emphasized that tariffs generate revenue from American citizens and thus implicate Congress' core taxing authority rather than a mere regulatory function.
• Multiple justices observed that, historically, when Congress intends to delegate tariff authority, it does so with explicit language and clear procedural safeguards, such as in Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962. The absence of comparable language in IEEPA was seen as strong evidence that Congress did not intend to confer such expansive tariff power.
• Justice Amy Coney Barrett pressed Solicitor General John Sauer to identify a statute other than IEEPA and its predecessor, the Trading With the Enemy Act (TWEA), in which the phrase "regulate importation" has been interpreted to include tariff authority. The solicitor general could not do so, and several justices questioned whether TWEA's wartime delegation and related case law provided a meaningful precedent. Although the Supreme Court upheld then-President Richard Nixon's use of TWEA to impose narrow tariffs, counsel for the plaintiffs drew a sharp distinction between that limited exercise of tariff authority and the sweeping tariff powers the government claims IEEPA grants.
• Justice Ketanji Brown Jackson and others referenced IEEPA's purpose and legislative history, noting that Congress enacted the statute in 1977 to narrow presidential authority that had been broadly exercised under TWEA. They pointed to procedural checks in the statute, such as congressional reporting and a legislative veto – a mechanism that was subsequently found unconstitutional in the 1983 case INS v. Chadha, 462 U.S. 919 (1983)).
• Several justices raised the "major questions" doctrine, noting that actions of vast economic and political significance require clear congressional authorization. They questioned whether the phrase "regulate importation" is sufficiently explicit to encompass the sweeping tariff authority claimed by the administration.
• Justice Elena Kagan and others also focused on Constitution's allocation of taxing powers to Congress, expressing concern that the administration's theory would allow the president to bypass legislative checks. Justice Neil Gorsuch warned that accepting the government's position could create a "one-way ratchet towards the gradual-but-continual accretion" of executive power and questioned whether Congress could meaningfully reclaim such authority once delegated.

Practical and Remedial Concerns

• Justice Barrett focused on the practical implications of invalidating the tariffs, particularly the complexity of reimbursing billions in duties already paid. Counsel for the plaintiffs acknowledged the challenges but argued that administrative complexity should not override statutory limits, at one point suggesting that relief could be offered prospectively to limit the administrative burden.

Implications for Clients

• Tariff Exposure. The Court's skepticism suggests a meaningful possibility that the IEEPA tariffs will be struck down – either entirely or in part. This could allow importers to submit reimbursement claims and underscores the importance of maintaining robust compliance and recordkeeping practices to support any future duty recovery.
• Future Executive Action. A ruling limiting presidential tariff authority under IEEPA would curtail the use of emergency powers for broad tariff actions and reinforce the need for explicit congressional authorization for major economic interventions. At the same time, it could prompt the administration to pivot to other trade authorities – such as Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962 (including the inclusions process) – to implement broad tariff measures in pursuit of its trade agenda.
• Ongoing Uncertainty. Until the Court issues its decision, the legal status of the IEEPA tariffs remains unsettled. Although administrative mechanisms already exist for importers of record to request and obtain tariff refunds from U.S. Customs and Border Protection (CBP), importers should closely monitor developments and be prepared for potential changes in tariff obligations and recovery procedures.

Action Items

• Review and maintain import records and tariff payment documentation to preserve eligibility for potential reimbursement claims.
• Consult with Holland & Knight lawyers and professionals, who are closely monitoring the Supreme Court proceedings and assessing their implications for compliance and possible reimbursement strategies.
• Evaluate exposure to other trade measures imposed under separate statutory authorities (e.g., Section 301, Section 232), which are not directly affected by this litigation but may impact your overall tariff risk profile.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.