Supreme Court Poised to Strike Down Trump’s Tariff Agenda
@Roy, this matter is related to regulation, legal policy, and the Supreme Court’s powers, so I’m assigning it to you.
@Lilly, this case involves legal interpretations of emergency presidential powers under IEEPA and their implications, so oversee this from a regulatory standpoint.
Key Event: Wall Street analysts expect the Supreme Court to rule Trump’s use of IEEPA to impose unilateral tariffs as illegal. The central case, V.O.S. Selections v. Trump, alongside other lawsuits, argues that Trump exceeded his authority, leading to challenges that could nullify his recent trade deals and tariffs if the Supreme Court upholds lower court rulings. The legal battle has broad implications for U.S. trade policy and executive powers.
To the Editor-in-Chief:
On July 26, 2025, it was reported that Wall Street analysts anticipate the Supreme Court will find former President Trump's unilateral imposition of tariffs under the International Emergency Economic Powers Act (IEEPA) to be illegal. This expectation stems from a series of lawsuits, most notably V.O.S. Selections v. Trump, which argue that the former president overstepped his authority by using the IEEPA to implement wide-ranging tariffs.
Lower Courts Rule Against Trump's Tariff Authority
Multiple federal courts have already ruled against the Trump administration's use of the IEEPA for tariffs. In late May 2025, the U.S. Court of International Trade (CIT) determined that the tariffs were unlawful, stating that the IEEPA does not grant the president the authority to impose them. A three-judge panel of the CIT unanimously ruled that the executive orders imposing the tariffs "exceed any authority granted to the president by IEEPA to regulate importation by means of tariffs". This decision was a significant setback to the former president's economic agenda.
Similarly, in the case of Learning Resources, Inc. v. Trump, a federal court in the District of Columbia also preliminarily enjoined the IEEPA tariffs for the plaintiffs, two small businesses. Judge Rudolph Contreras of the D.D.C. declared the tariffs "unlawful," though he did not vacate the executive orders entirely.
The Legal Arguments
The central legal question is whether the IEEPA, a 1977 law granting the president emergency powers to deal with "unusual and extraordinary threats" from outside the U.S., can be used to set tariffs. Attorneys for the plaintiffs in V.O.S. Selections have argued that the IEEPA "nowhere mentions tariffs, duties, imports, or taxes, and no other President in the statute’s nearly 50-year history has claimed that it authorizes tariffs". They contend that the Constitution vests the power to impose tariffs solely in Congress.
The Trump administration's defense rested on a single line in the IEEPA that allows the regulation of "importation," which they claim grants the president broad authority to set tariffs. However, this argument has not been successful in the lower courts.
Path to the Supreme Court
Both the V.O.S. Selections and Learning Resources cases are on appeal. The U.S. Court of Appeals for the Federal Circuit granted a stay on the CIT's injunction in V.O.S. Selections, allowing the tariffs to remain in effect pending the appeal, with oral arguments scheduled for July 31, 2025. The appeal in the Learning Resources case is before the U.S. Court of Appeals for the D.C. Circuit.
In an unusual move, the plaintiffs in Learning Resources petitioned the Supreme Court to hear their case before the appellate court has ruled, a request known as "certiorari before judgment". However, the Supreme Court denied their motion to expedite consideration of this petition.
Wall Street's Take and Potential Consequences
According to a July 25 research note from Piper Sandler, Wall Street analysts believe it is "highly unlikely" the Supreme Court will rule in Trump's favor. The investment bank warns that a ruling against the former president could invalidate all trade deals and tariffs implemented under the IEEPA, potentially triggering retroactive refunds for affected entities. This would include the 10% minimum tariff, tariffs on goods from China, Canada, and Mexico related to fentanyl, and other reciprocal tariffs. The outcome of this legal battle will have significant implications for the balance of power between the executive and legislative branches in setting U.S. trade policy.
@Roy, focus your article on clearly explaining the key event: Wall Street analysts expect the Supreme Court to rule against former President Trump's unilateral tariff actions under the IEEPA. Start with a concise summary of the legal challenge (V.O.S. Selections v. Trump) and lower court decisions, emphasizing why the IEEPA may not authorize tariffs. Avoid unnecessary case-law tangents; instead, briefly outline the stakes—retroactive refunds, trade policy impacts, and the constitutional balance of power. Use the Piper Sandler research note to frame the financial implications and why this matters to readers. Be sharp, direct, and avoid jargon—we need clarity.
Supreme Court Poised to Strike Down Trump’s $10B Tariff Agenda
- Landmark ruling could redefine executive power and reshape U.S. trade policy.
- Legal battle centers on the president’s use of emergency powers to impose tariffs.
On July 26, 2025, Reuters reported growing consensus among Wall Street analysts that the Supreme Court will overturn former President Donald Trump’s unilateral tariffs imposed under the International Emergency Economic Powers Act (IEEPA). Central to this dispute is V.O.S. Selections v. Trump, a case arguing that Trump’s actions exceeded the authority granted under the 1977 legislation, potentially setting a pivotal precedent on executive powers in trade policy.
A July 25 research note from Piper Sandler underscores the stakes of this ruling. Should the Supreme Court uphold lower court decisions invalidating Trump’s tariffs under the IEEPA, it could unravel all trade measures enacted via the statute—including duties targeting imports from major trading partners like China, Canada, and Mexico. Piper Sandler analysts warn of retroactive refunds to affected businesses, elevating the financial and economic risks tied to these legal proceedings.
Court decisions leading up to the Supreme Court showdown have been consistent in their rejection of Trump’s tariff actions. On May 27, 2025, the U.S. Court of International Trade (CIT) unanimously ruled that the IEEPA does not permit tariffs, asserting Trump “exceeded the authority granted to the president.” Similarly, the District Court for the District of Columbia preliminarily enjoined the tariffs in Learning Resources, Inc. v. Trump, with Judge Rudolph Contreras deeming the measures “unlawful” while stopping short of vacating the executive orders in their entirety.
Legal scholars broadly align with the plaintiffs in arguing the IEEPA’s scope. Designed to address emergency threats originating outside the U.S., the statute makes no mention of tariffs, duties, or imports. Attorneys in V.O.S. Selections v. Trump stress that the nearly 50-year history of the act offers no precedent for such presidential actions, emphasizing that authority to impose tariffs constitutionally resides with Congress.
Trump's legal team counters by interpreting the IEEPA’s language on regulating "importation" as broadly authorizing tariff measures, but lower courts have repeatedly dismissed this claim. While his administration’s argument faces mounting setbacks, legal appeals continue to keep Trump-era tariffs intact pending final resolution.
The U.S. Court of Appeals for the Federal Circuit recently stayed the CIT’s injunction in V.O.S. Selections, scheduling oral arguments for July 31, 2025. Likewise, Learning Resources awaits judgment from the D.C. Circuit Court of Appeals, with its expedited request for Supreme Court review denied earlier this year.
The expected ruling carries profound implications not just for Trump-era policies but for broader U.S. trade governance. A Supreme Court decision limiting IEEPA’s reach could curtail executive powers in trade regulation, reinforcing the constitutional mandate for Congress to oversee tariff policies.
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