Supreme Court to decide if Trump can use IEEPA to impose tariffs

On November 5, 2025, the U.S. Supreme Court heard oral arguments for and against the tariffs established under the International Emergency Economic Powers Act (IEEPA). The justices must now decide whether IEEPA empowers President Donald J. Trump to impose tariffs — or not.

• A group of businesses and a group of states are challenging the IEEPA tariffs. The Trump administration is defending them. The case is with the U.S. Supreme Court.
• When making their decision, the justices may consider amicus briefs that were filed on behalf of legal scholars, members of Congress, think tanks, trade experts, the watch industry, and a vineyard owner. Of the 45 briefs, 38 oppose the tariffs, six support them, and one is neutral.
• If the Supreme Court overturns the IEEPA tariffs, the U.S. government may be required to refund the duties collected under IEEPA.

The International Emergency Economic Powers Act of 1977 empowers the president of the United States to regulate economic transactions following a declaration of national emergency.

IEEPA “may only be exercised to deal with an unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States.”

IEEPA has typically been used to set sanctions on adversaries. President George W. Bush invoked IEEPA after September 11, 2001, to financially hobble the terrorists. President Barack Obama used IEEPA in 2015 to authorize economic sanctions on foreign-based hackers.

Trump is the first president to invoke IEEPA to establish tariffs and he has relied on it extensively since returning to the Oval Office. IEEPA is behind the “fentanyl tariffs” on Canada, China, and Mexico as well as the reciprocal” tariffs on virtually all other countries. The IEEPA tariff rates range from 10% to 50%, and they can stack on top of other tariffs.

Two groups of businesses and a group of 12 states argue that IEEPA does not authorize the president to impose tariffs.

The U.S. Supreme Court consolidated the two cases, Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, and heard nearly three hours of oral arguments for and against the IEEPA tariffs on November 5, 2025. When deliberating the case, the justices may also consider the amicus (aka, friends of the courts) briefs that have been submitted.

The Trump administration argues IEEPA does grant the president the authority to impose tariffs. President Trump claims the nation’s trade deficit is a national emergency that merits the use of IEEPA. The U.S. has had a trade deficit since 1975.

The lower courts all rejected the president’s interpretation of IEEPA, but some judges dissented. “We do not see IEEPA as anything but an eyes-open congressional choice to confer on the president ‘broad authority’ to choose tools to restrict importation when the IEEPA … standards are met,” Justice Richard Taranto of the U.S. Court of Appeals for the Federal Circuit wrote in the dissenting opinion.

During the oral arguments, several members of the Supreme Court’s conservative majority asked the administration’s lawyer “sharp and skeptical questions,” according to the New York Times.

The attorney for the plaintiffs also faced some tough questions. Justice Brett Kavanaugh asked why Congress would give the president power to shut down trade but not take a less severe step, like imposing a 1% tariff.

Historically, U.S. tariffs are established under Section 232 of the Trade Expansion Act of 1962, Sections 201 or 301 of the Trade Act of 1974, or another law. President Trump has relied on these laws as well as IEEPA. He initiated more than a dozen Section 232 investigations and imposed Section 232 tariffs on numerous products, including aluminum, copper, steel, and certain trucks. He’s also requested Section 201 and Section 301 investigations. His use of Sections 201, 232, and 301 is not in dispute.

The future of the IEEPA tariffs is at stake, along with the trillions of dollars of revenue they’re expected to generate over the next decade. If the Supreme Court determines IEEPA does not authorize the president to establish tariffs as he has done, the federal government could be required to refund duties collected under IEEPA.

Alternatively, the justices could limit their decision to prospective relief. Neal Katyal, the attorney representing the businesses, presented this as an option when Justice Amy Coney Barrett asked how the reimbursements would work if they won.  

The administration won’t be without recourse if the Supreme Court overturns the IEEPA tariffs.

“Interpreting IEEPA as not covering tariffs or other monetary exactions does not hobble the president,” wrote Andrew Kent (the Joseph M. McLaughlin Chair at Fordham University School of Law) and Paul Stephan (the John C. Jeffries, Jr., Distinguished Professor and the Louis F. Ryan ’73 Research Professor at the University of Virginia School of Law) in their amici brief opposing the tariffs. They continued, “Existing trade law gives him significant authority to adjust tariffs to confront a national emergency,”

Treasury Secretary Scott Bessent has also said the administration has other options.

It’s unclear when the Supreme Court will issue a decision. It could be weeks or months.

Whatever the court decides, there will still be tariffs, and cross-border compliance will still be challenging. Avalara helps alleviate compliance burdens by automating tariff code classification and calculating customs duties in real time. Learn about cross-border solutions from Avalara.

What is IEEPA? 

IEEPA refers to the International Emergency Economic Powers Act of 1977, which authorizes the president to regulate economic activity after declaring a national emergency following an unusual and extraordinary threat.

How has President Trump used IEEPA to impose tariffs?

President Trump claims the country’s long-standing trade deficit constitutes a national emergency. He’s the first U.S. president to invoke IEEPA to impose tariffs.

Why are businesses and states challenging the IEEPA tariffs?

Challengers argue that IEEPA was never intended to be used for trade policy and that using it to set tariffs exceeds presidential authority. They contend it shifts too much power from Congress to the executive branch.

What could happen if the Supreme Court rules against Trump’s use of IEEPA for tariffs?

If the Supreme Court decides that IEEPA does not authorize tariff imposition, it could invalidate past and future tariffs issued under this law. This decision may require the U.S. government to refund the IEEPA duties collected, more than $88 billion thus far. It may also prompt the administration to rely on other trade laws like Sections 232 and 301.