Supreme Court Poised to Rule on Trump’s Emergency Tariffs, With $133 Billion at Stake

Every time a container of math manipulatives or plastic counting bears arrives at Learning Resources’ warehouse outside Chicago, the education company pays a surcharge it never planned for: tariffs imposed under a Trump administration “emergency” program that has added billions to the cost of imported goods.

By the end of this week, the U.S. Supreme Court is expected to say whether those duties were ever lawful — and how far any president can go in using emergency powers to tax imports without Congress.

A decision expected Friday

The justices have scheduled a sitting for Friday, Jan. 9, to issue opinions in argued cases. Among the closely watched matters awaiting a ruling is a consolidated challenge to former President Donald Trump’s 2025 tariff regime, which relied on a 1977 emergency‑powers law called the International Emergency Economic Powers Act (IEEPA).

At stake are more than $133 billion in duties that importers say should be refunded if the program is struck down, and a much larger question about the balance of power in Washington: whether a president can, by declaring an economic “emergency,” effectively rewrite the nation’s tariff schedule that the Constitution assigns to Congress.

How the 2025 tariff program worked

Trump’s program, rolled out in early 2025 during his second term, marked the first time in IEEPA’s nearly 50‑year history that a president used it to levy broad tariffs rather than to freeze assets or impose targeted sanctions.

In February 2025, Trump declared a national emergency tied to fentanyl and other illicit drugs and used IEEPA to impose new tariffs on imports from China, Canada and Mexico, framing them as a tool against trafficking and border crime. Two months later, he declared a separate “economic emergency” based on trade deficits and what he described as a lack of “reciprocity” from U.S. trading partners, then added at least a 10% tariff on most imports from nearly all countries, with additional surcharges on some, including rates as high as 40% on certain products from Brazil and 25% from India.

Those actions triggered a wave of lawsuits from small businesses, states and trade groups, and a string of rulings against the administration in lower federal courts.

Lower courts: IEEPA went too far — or doesn’t allow tariffs at all

A three‑judge panel of the U.S. Court of International Trade ruled in May that Trump overstepped IEEPA by using it to impose open‑ended, across‑the‑board tariffs. The court said long‑standing trade deficits and reliance on foreign manufacturing, while important policy concerns, did not amount to the kind of “unusual and extraordinary threat” the statute requires.

The U.S. Court of Appeals for the Federal Circuit, sitting en banc, largely agreed in August. In a 7–4 decision in V.O.S. Selections, Inc. v. Trump, the appeals court affirmed that the “reciprocal” and “trafficking and immigration” tariffs exceeded any authority Congress granted in IEEPA. While the court narrowed an injunction that had blocked collection of the duties nationwide, it kept the core finding intact and stayed its own ruling to give the Supreme Court time to review the case.

In a separate case, a federal judge in Washington, D.C., sided with Learning Resources and another educational toy company, Hand2Mind, and went further. That court concluded in June that IEEPA does not authorize tariffs at all, under any emergency, because Congress has historically delegated tariff powers in other, more specific statutes that explicitly mention duties and often cap rates and duration.

Together, the cases — now consolidated under the title Learning Resources, Inc. v. Trump — ask the Supreme Court two questions: whether IEEPA can be read to permit the tariffs Trump imposed in 2025, and if so, whether that reading would make the law an unconstitutional transfer of Congress’ taxing and trade powers to the executive branch.

The Supreme Court’s concerns

During oral arguments on Nov. 5, justices from across the ideological spectrum expressed concern about the breadth of the administration’s theory.

Justice Neil Gorsuch, a conservative who has often questioned broad delegations of power to federal agencies, pressed the government on what would stop a future president from citing almost any economic concern as an “emergency” to reset tariffs. According to accounts of the argument, he warned that once the court endorsed such an interpretation, “you can’t get this power back.”

Chief Justice John Roberts questioned whether chronic trade deficits — a central justification for the “worldwide” tariffs — were the kind of sudden, unusual threat Congress had in mind in 1977, or rather a long‑running policy disagreement better left to lawmakers.

Liberal justices, including Ketanji Brown Jackson and Sonia Sotomayor, focused on the structure and history of IEEPA. They noted that the law was passed after Vietnam and Watergate alongside the National Emergencies Act, in part to cabin open‑ended emergency powers under the old Trading with the Enemy Act. They asked the government to identify a limiting principle that would prevent IEEPA from becoming a general tool for presidents to circumvent Congress on economic policy.

On the other side, Justices Samuel Alito and Clarence Thomas appeared more receptive to the administration’s argument that the president needs wide latitude in foreign economic affairs and that “regulating” imports under IEEPA naturally includes the power to impose tariffs as one form of regulation.

What each side argues

Lawyers for the administration argue that nothing in IEEPA’s text forbids tariffs and that the statute’s broad grant of authority to “regulate or prohibit” imports and exports is designed to give the president flexible tools to respond to fast‑moving threats with foreign origins.

They also point to carve‑outs Congress wrote into IEEPA — such as protections for the import and export of informational materials — as evidence that lawmakers knew how to limit presidential power when they wanted to and chose not to exclude tariffs.

On the campaign trail and on social media, Trump has portrayed the tariffs as central to both America’s balance sheet and its security. “Because of Tariffs, our Country is financially, AND FROM A NATIONAL SECURITY STANDPOINT, FAR STRONGER,” he wrote in a recent post, and said that a loss at the Supreme Court would be “a terrible blow to the United States.”

Importers and a coalition of 12 Democratic‑led states, including Oregon, California and New York, tell a different story. They argue that the tariffs have raised costs for businesses and consumers while effectively allowing the White House to assume Congress’ constitutional role in setting “Taxes, Duties, Imposts and Excises” and regulating foreign commerce.

“The president is treating IEEPA as a blank check,” Oregon and other states said in court filings, warning that if the program is upheld, any president could declare a climate, labor or currency “emergency” and reorder trade without a vote in Congress.

Advocacy groups across the spectrum have weighed in. The Brennan Center for Justice has argued in friend‑of‑the‑court briefs that IEEPA and the National Emergencies Act were meant to rein in, not expand, emergency authorities and should be interpreted narrowly. The libertarian Cato Institute contends that reading IEEPA as a tariff statute is “legally untenable” because tariffs are a core legislative function that the Constitution assigns to Congress in Article I.

The money at stake — and what happens next

The financial stakes are substantial. U.S. Customs and Border Protection data show that more than $133.5 billion in duties tied to the contested IEEPA tariffs had been collected as of mid‑December, according to figures cited in court and public reports. Total U.S. customs revenue reached a record $195 billion in the 2025 fiscal year, though that includes other types of duties as well.

If the Supreme Court invalidates Trump’s use of IEEPA, one of the thorniest follow‑up issues will be whether, and to what extent, importers are entitled to refunds. The justices could leave those questions to lower courts and agencies, limit relief to future shipments, or allow broad refunds that would force the Treasury to return tens of billions of dollars.

Beyond the immediate cash flows, the decision will shape how presidents of both parties wield emergency‑powers laws in an era when gridlock often stymies Congress on major economic issues.

A ruling for the administration would effectively bless the use of emergency declarations to make sweeping changes to trade policy, and could embolden future presidents to invoke IEEPA to pursue agendas on climate, labor or supply chains without new legislation.

A narrow ruling against Trump on statutory grounds — holding that IEEPA, properly read, does not authorize tariffs — would rein in that possibility while leaving most of the emergency‑powers framework intact. A broader decision that finds such a reading of IEEPA violates the Constitution’s separation of powers could reverberate far beyond trade, calling into question other open‑ended delegations in foreign and domestic economic law.

For companies like Learning Resources and V.O.S. Selections, and for millions of businesses and consumers whose supply chains now run through emergency‑era tariff codes, those legal abstractions translate into concrete costs.

Whatever the justices decide, the ruling will answer a question that reaches well past the current occupant of the White House: when a president declares an “emergency,” how much of Congress’ economic authority can he or she claim as their own.