U.S. Supreme Court rules on 2025 Tariffs (Part III)

1) What tariff actions are being challenged

Although U.S. tariff law contains multiple tools (for example, Section 232 national security tariffs and Section 301 trade enforcement tariffs), the Supreme Court litigation here is focused on tariffs imposed via IEEPA (50 U.S.C. § 1701 et seq.), using the National Emergencies Act framework (50 U.S.C. §§ 1601–1651) to declare/continue emergencies.

The challenged IEEPA actions fall into two main sets:

A. The “Trafficking Tariffs”

In February 2025, the President issued executive orders imposing:

• 25% ad valorem duties on all articles that are products of Canada, 
• 25% ad valorem duties on all articles that are products of Mexico, and 
• 10% ad valorem duties on all articles that are products of China (later amended upward).

These were justified as emergency measures tied to opioid trafficking and alleged failures by those countries to meaningfully address the threat.

B. The “Reciprocal Tariffs”

On April 2, 2025, the President issued Executive Order 14257, described by the courts as imposing:

• a baseline 10% tariff on imports from nearly every country with which the United States has significant trade, and 
• additional country-specific rates (ranging up to 50%) scheduled to apply shortly thereafter.
• The Federal Circuit characterized these tariffs as being of unlimited duration, imposed on nearly all goods, from nearly every country in the world.

2) The legal foundation the President relied on—and why it is contested

A. What IEEPA actually says (the textual dispute)

IEEPA provides that, after a national emergency is declared, the President may “investigate … regulate … prevent or prohibit” the “importation or exportation” of “property in which any foreign country or a national thereof has any interest.” The key statutory hook is 50 U.S.C. § 1702(a)(1)(B).

But the lower courts emphasized a striking feature of the statute: IEEPA does not use the words “tariffs” or “duties,” nor similar terms like “customs,” “taxes,” or “imposts,” and it contains no catchall residual clause.

B. The “emergency” constraint

IEEPA also says presidential powers under the statute may only be used “to deal with” an “unusual and extraordinary threat” that has its source outside the U.S., and “may not be exercised for any other purpose.” That language comes from 50 U.S.C. § 1701(a)–(b).

This “to deal with” requirement becomes central for the trafficking tariffs: are tariffs a direct means of dealing with trafficking, or are they merely economic leverage?

3) Case 1: The Court of International Trade — *V.O.S. Selections, Inc. v. United States* (May 28, 2025)

The Court of International Trade (CIT) framed the dispute as a structural constitutional question. The Constitution assigns Congress the powers to “lay and collect Taxes, Duties, Imposts and Excises,” and to regulate commerce with foreign nations (U.S. Const. art. I, § 8). The CIT asked whether IEEPA delegates those powers to the President in the form of authority to impose unlimited tariffs on goods from nearly every country in the world—and held that it does not, setting aside the challenged tariffs.

A. Nondelegation backdrop: “intelligible principle”

The CIT situated the dispute against modern nondelegation doctrine: Congress may delegate authority if it lays down an “intelligible principle,” drawing on J.W. Hampton, Jr. & Co. v. United States⁵, Mistretta v. United States⁶, and Gundy v. United States⁷.

B. Why the CIT’s forum matters

The CIT emphasized that the Harmonized Tariff Schedule of the United States (HTSUS) is maintained through statute and that executive orders in this context effectively amend tariff subheadings (including in Chapter 99). The CIT also relied on its 28 U.S.C. § 1581(i) jurisdiction and explained why standard CBP “protest” procedures are not always a required path when Customs is merely collecting payments under a binding external directive—citing United States v. U.S. Shoe Corp⁸.

4) Case 2: The D.D.C. decision — *Learning Resources, Inc. v. Trump* (May 2025)

In Learning Resources, the plaintiffs were small businesses importing goods from multiple Asian countries. They challenged the IEEPA tariff orders on multiple theories: (1) IEEPA does not authorize tariffs; (2) even if it does, it does not authorize these tariffs; (3) implementing agency actions violated the Administrative Procedure Act; and (4) if IEEPA permits these tariffs, it violates the nondelegation doctrine.

The D.D.C. court summarized the case with a line that has become central to commentary: this is not about tariffs “qua tariffs,” but about whether IEEPA enables a President to unilaterally impose, revoke, pause, reinstate, and adjust tariffs to reorder the global economy—and the court concluded it does not.

A. The constitutional starting point: Congress controls tariffs

The D.D.C. opinion emphasized first principles:

• Congress holds the taxing power under Article I.
• The President has no independent discretion to impose or alter tariffs.
• Any presidential tariff power must be delegated by Congress.

In doing so, it invoked Youngstown Sheet & Tube Co. v. Sawyer⁹ and the trade-law precedent United States v. Yoshida International, Inc¹⁰. for the proposition that no undelegated power to set tariffs “inheres” in the Presidency.

B. “Regulate” vs “tax”: Gibbons v. Ogden

A core move by the D.D.C. court was to treat a tariff as fundamentally a tax and to reject the idea that a general power to “regulate importation” quietly includes the power to tax. The court quoted Chief Justice Marshall in Gibbons v. Ogden¹¹: “the power to regulate commerce is … entirely distinct from the right to levy taxes and imposts.”

C. Congress’s pattern: tariff delegations usually come with limits

The D.D.C. court highlighted that when Congress has granted tariff tools elsewhere in Title 19, it typically includes procedural, substantive, and time limits. As a vivid example, it pointed to Section 122 of the Trade Act of 1974 (19 U.S.C. § 2132)¹², which authorizes an import surcharge but caps it at 15% and generally limits duration to 150 days absent congressional approval.

5) Case 3: The Federal Circuit — *V.O.S. Selections, Inc. v. Trump* (Aug. 29, 2025)

The Federal Circuit’s per curiam decision is the major appellate ruling that propelled the dispute to the Supreme Court. It described the case as the government’s appeal from a CIT decision setting aside five executive orders that imposed tariffs of unlimited duration on nearly all goods from nearly every country, and it affirmed on the ground that IEEPA’s grant of power to “regulate” imports does not authorize the tariffs imposed by the executive orders.

A. The Federal Circuit’s narrow holding with broad implications

The court emphasized it was not deciding whether IEEPA authorizes any tariffs at all; it decided only that the Trafficking Tariffs and Reciprocal Tariffs imposed by the five challenged executive orders are not authorized by IEEPA.

B. The “missing words” point (again)

Like the D.D.C. court, the Federal Circuit stressed that IEEPA does not mention “tariffs,” “duties,” “customs,” “taxes,” or “imposts,” and does not contain a residual clause granting unstated powers.

C. Tariffs as taxes and the “major questions” doctrine

The Federal Circuit explicitly stated that tariffs are a tax and anchored this in constitutional structure (including the Founding-era notion that “the purse” rests with the people’s representatives). It then invoked the major questions doctrine as articulated in West Virginia v. EPA¹³ and FDA v. Brown & Williamson¹⁴, requiring “clear congressional authorization” where the asserted power carries vast economic and political significance.

D. History: *Yoshida* and why it is not a clean match

The government relied heavily on United States v. Yoshida International, Inc. (the Nixon-era surcharge case under the Trading with the Enemy Act). The Federal Circuit distinguished Yoshida on the ground that the Nixon measure was limited in time, scope, and amount, and did not supplant the entire congressional tariff scheme—unlike the unbounded tariffs at issue in 2025.

E. Remedies: universal injunctions, *Trump v. CASA*, and the *eBay* factors

Even while affirming that the tariffs exceeded IEEPA authority, the Federal Circuit vacated the CIT’s universal injunction and remanded for reconsideration of injunctive relief scope in light of Trump v. CASA, Inc.¹⁵ and the traditional four-factor test for equitable relief (the eBay Inc. v. MercExchange, L.L.C.¹⁶ framework).

F. Separate views and dissent: the judicial fault lines

The Federal Circuit included:

• “Additional views” stating IEEPA authorizes no tariffs at all, and 

• a dissent arguing the plaintiffs failed to justify summary judgment and that “regulate importation” can include tariffing, emphasizing emergency-power breadth and harmonization across overlapping statutes.

The dissent also referenced Dames & Moore v. Regan¹⁷ to argue that IEEPA reflects congressional acceptance of broad executive action during emergencies and treated tariffs as permissible leverage—i.e., a “bargaining chip.”

6) The U.S. Supreme Court litigation: what is being argued (and what could change)

A. Procedural posture

The Supreme Court granted certiorari before judgment and consolidated the matters for expedited review, allotting argument time among the Solicitor General and counsel for private and state challengers. Argument took place on November 5, 2025, and as of January 2026 the Court has not yet issued an opinion.

B. The questions the Court is effectively deciding

In plain terms, the Supreme Court is considering:

• Statutory authority: Does IEEPA (50 U.S.C. § 1701 et seq.), especially § 1702(a)(1)(B)’s power to “regulate … importation,” authorize the President to impose tariffs—particularly tariffs of the breadth, duration, and magnitude used in 2025?

• Nondelegation / separation of powers: If IEEPA is interpreted to authorize sweeping tariffs, does that interpretation create an unconstitutional delegation of legislative authority because tariffs function as taxes—traditionally the core power of Congress under Article I?

• Related structural doctrines: Should the major questions doctrine apply to this emergency-power setting, and if so, does the government have “clear congressional authorization” for global tariffs under IEEPA?

• Remedies: If challengers win, what relief is appropriate in a world where universal injunctions are constrained by Trump v. CASA, Inc., and what does that mean for refunds?

C. The government’s core arguments (as distilled in reporting and lower-court reasoning)

The government’s position has three recurring themes:

• Text: “Regulate importation” is broad and can include tariffs; IEEPA also authorizes more extreme steps (like prohibitions), so tariffs are a less restrictive tool.

• Emergency/foreign affairs deference: IEEPA sits in the foreign policy and national security space, where courts often show deference.

• Doctrine limits: The government argues that major questions logic should not be imported wholesale into foreign affairs and national security, and that IEEPA’s structure (annual renewal, congressional termination mechanisms) supplies meaningful constraints.

These themes are reflected in summaries of oral argument and commentary around the cases.

D. The challengers’ core arguments

The challengers’ recurring themes are:

• No “tariffs” in the statute: Congress knows how to delegate tariff authority explicitly; silence matters.

• Tariffs are taxes: the Constitution assigns taxation/duty power to Congress, so any delegation must be explicit and bounded.

• Major questions: empowering one person to impose tariffs on any product, from any country, in any amount, for any length of time is the kind of economically significant authority that requires clear textual authorization.

• Congress provided narrower tools elsewhere: particularly the “import surcharge” mechanism in Trade Act § 122 with a 15% cap and 150-day limit.

Those themes track closely the D.D.C. and Federal Circuit reasoning.

7) Why these matters – even beyond trade lawyers

A. It is a separation-of-powers test with real economic consequences

If the Court approves the 2025 IEEPA tariffs, future presidents may view IEEPA as a flexible “tariff dial” during declared emergencies. If the Court rejects them, it will reaffirm that global tariff policy must run through statutes where Congress has spoken more clearly and imposed constraints.

B. It may drive a second wave of disputes: refunds and remedy scope

Even if the Supreme Court strikes down the tariffs, the practical question becomes: who gets refunds and how? In trade practice, refunds often turn on whether entries are liquidated and whether an importer preserved rights through the protest system of 19 U.S.C. § 1514 and related regulations (for example, accelerated disposition concepts under 19 C.F.R. § 174.22). Commentary following oral argument suggests refunds will not be automatic.

C. The decision will influence which tariff authorities’ administrations use next

A ruling against IEEPA tariffs does not eliminate tariffs as a policy tool; it pushes policy toward other authorities (such as Section 232), which have different procedural predicates and litigation profiles. The Federal Circuit dissent itself points to the complexity of overlapping statutory schemes and the presumption that statutes should coexist harmoniously absent clear displacement.

8) What to watch

As the Supreme Court’s decision approaches, the key signals to monitor are:

• How the Court reads “regulate … importation” in 50 U.S.C. § 1702(a)(1)(B) – broad functional authority vs narrow textual constraint.

• Whether the Court invokes major questions analysis (and what it considers “clear authorization”).

• Whether the Court reaches nondelegation or resolves the case on statutory grounds alone.

• How the Court frames remedies in a post–Trump v. CASA landscape: party-specific relief vs broader prospective relief—and how that translates into customs refund pathways.