President Donald Trump began imposing tariffs against trade partners on 1 February 2025. He claimed in one of his first Executive Orders that illegal aliens and the flow of drugs like fentanyl constituted a national emergency.¹ Using a statute known as the International Emergency Economic Powers Act (IEEPA), he started imposing tariffs against Canada, Mexico, and China set at 25% for the two US-Mexico-Canada Agreement (USMCA) trade partners and 10% for China.

He reached for the same legal tool multiple times, most notably on 2 April against US trade partners in a worldwide sweep so unprecedented that it included uninhabited, remote, and barren islands near Antarctica,² when he declared that bilateral trade deficits were also a national economic emergency. He imposed tariffs of up to 50% against every country, including those with existing free trade agreements and even those running trade surpluses in goods trade with the United States.³

His authority to do so, however, had been legally challenged for much of the year. Two different lower courts ruled against the administration’s use of IEEPA. The cases were consolidated and sent upon appeal to the Supreme Court.

On 5 November, the nine justices on the highest US court listened to several hours of testimony in formal oral arguments.⁴ These judges had agreed to review the IEEPA tariff challenges on an expedited basis. The Court is expected to rule on the case at any time between now and the end of this Court’s term in June 2026.

This case will produce one of the most closely watched rulings by the Court in its history. The decision will affect not only the role of the US President in the system of government but have implications for the US and global economy, foreign governments, and companies around the globe.

Although it remains an open question how the Court might rule in this case, experts noted a range of skepticism about the administration’s legal arguments during the hearing. Even the more conservative judges on the bench raised difficult questions suggesting that a full or partial overturn of IEEPA tariffs may be in the offing.⁵

There are multiple issues at stake. Most affect domestic politics, including the role of Congress which was explicitly tasked in the US Constitution with regulating trade, taxes, and tariffs; the scope of power for the President in the Executive Branch of government; and the process by which Congress delegates authority to the Executive.

The rest of the world, however, will perhaps be more keenly interested in the actual fate of tariffs imposed under IEEPA and the potential ability of Trump and future US Presidents to use the statute to impose tariffs in the future.

No matter what happens with the Supreme Court, the US President has a range of other tools available to impose higher tariffs.⁶ This includes the continued and expanded use of Section 232 for national security.⁷ As trade watchers will recall, this piece of legislation has been used multiple times under Trump since 2018 and extended under President Joe Biden. Trump’s latest impositions add tariffs of up to 50% for products made with steel, aluminum, and copper; for tariffs of up to 25% for autos, heavy trucks, buses, and automotive parts; and up to 25% for softwood lumber, kitchen cabinets, and upholstered furniture.

The original covered product lists for Section 232 have been expanded multiple times, using a term called “derivative products.” This means that the original aluminum tariffs, for example, now apply to the metal content in peanut butter packaging. The inclusion process allows the US government to continuously add products to the covered lists.

There are a wide range of additional Section 232 cases under investigation with similarly wide application including for semiconductors and electronics, pharmaceuticals, drone aircraft, and machinery. As with existing cases, coverage could be expanded over time to capture additional trade imports.

Another trade statute that has been used already is Section 301 for alleged unfair trade practices. This tool also allows the imposition of tariffs against a specific country.

Additional, more novel, and untested arrangements for tariff collection on imports include Section 122 and 338. Section 122 requires an announcement of a balance-of-payments problem. It allows the immediate global imposition of 15% tariffs for 180 days. Section 338 allows tariffs of up to 50% indefinitely, but as it has never been used in this manner, its use would probably come under immediate legal scrutiny.

The point is that, even if the Supreme Court ultimately rules against the administration, there are other tools that Trump can use to impose tariffs on imports if he chooses to do so.

However, the complete or partial overturn of IEEPA would create a number of challenges for US trade partners. First, there is likely to be the practical but extremely complicated and messy process of managing refunds. If the US government gets a ruling that IEEPA cannot be used for the purposes originally stated by Trump to collect tariffs from imports, then these tariffs will likely need to be returned.

Of course, there are myriad ways that the administration can facilitate or hinder the process. They could simply draw out whatever steps are to be taken for such an extended time period that many firms prove unable or unwilling to wait long enough to see any refund. These refunds may or may not include interest on payments. They could be granted to a subset of firms based on whether they were named as part of any existing IEEPA tariff lawsuits (which is already causing a stampede of firms looking to join new legal challenges).

Such refunds, if paid, will be paid to the importer of record, which is not necessarily the firm that expects a refund. This will lead to a further messy period of potential legal challenges while firms sort out who in a transaction is entitled to what.

Second, there will also be extremely complicated questions about what happens to any trade deals struck with foreign partners. These arrangements were conducted under the threat of IEEPA “reciprocal tariffs.” If the Supreme Court rules that such tariffs are not legal in whole or in part, it raises immediate questions for US trade partners whether the deals they signed were legal at all.

To be clear, even the feistiest foreign counterpart will struggle to overturn any existing agreement with the US in its entirety. Not every element in these trade arrangements is about “reciprocal tariffs” or, indeed, tariffs at all. These non-tariff aspects of the trade deals may be maintained regardless of what happens in Washington’s domestic processes.

But there is an argument to be made that the original conditions for the agreement have shifted sufficiently to require a reopening of negotiations. At a minimum, any specific references to IEEPA, “reciprocal tariffs”, or fentanyl tariffs would need to be revised.

One current “stick” used to provide enforcement in, for example, the Malaysia-US agreement is a snapback to the 2 April tariff rates should Malaysia be deemed by the US to abrogate any part of the deal.⁸ However, if Trump’s ability to use IEEPA were removed or adjusted by the Supreme Court, it is unclear what tariff rate might be assumed to apply in the event of a perceived breach of terms in the deal. The Cambodia-US agreement includes fewer specific references to IEEPA, although the tariff rate is “capped” at 19% which matches the tariff rate imposed by Trump using IEEPA.⁹

Most of the existing trade deals with the US either exclude other tariff statutes like Section 232 or 301 entirely or limit the application of Section 232 to specific sectors. If the US administration shifts toward use of other tariff tools, the utility of these bilateral trade arrangements will diminish rapidly.

There has been an argument that IEEPA has provided the President with a simple, flexible way to use tariffs for a wide array of challenges, including migration, drugs, trade deficits in goods, foreign oil purchases, displeasure with domestic legal proceedings in foreign counterparts, and retaliation against other countries should their media run advertisements critical of US tariffs. Other legal tools may limit the range of tariff applications and may come with more rules for the executive branch regarding investigations, comment periods, and timelines for application.

However, it is worth noting that this administration may, or may not, adhere to these rules. For example, in the wake of the US-China dialogue in Busan, South Korea, on 30 October, the US and China agreed to suspend fees on ship docking for a year. This action had been taken by the Americans under a Section 301 investigation of unfair trade practices. On 6 November, the US issued a notice of the comment period to adjust ship fees in the wake of the bilateral agreement.¹⁰ This comment period was open for a mere 24 hours before the suspension came into force on 10 November.

Technically, the US did allow for comments, as required, and did provide a timeline for implementation. Although in this instance the US was removing protection, there is no reason to assume that the imposition of protection would take much longer than 24 hours obliging the executive branch to investigate, allow the public more time to provider comment, accommodate time needed to adjust planned policy changes based on these comments, or include longer timelines for implementation.

The use of “investigations” under Section 232 has received similarly willy-nilly treatment in practice. Somehow, for example, upholstered sofas and kitchen cabinets were added to the list of goods subject to softwood lumber tariffs, covered by Section 232 ostensibly for national security concerns. The Proclamation from the White House makes no mention of why these items were included and the Secretary of Commerce report on the topic also does not explain the national security implications of importing bathroom vanities and similar “derivative” products.¹¹

Hence, even the removal in whole or in part of Trump’s ability to use IEEPA may not slow his administration’s use of tariffs as a critical tool for achieving a wide array of objectives. However the Supreme Court eventually rules, trade uncertainty is set to continue.