Supreme Tariff Showdown Revisited

When the Supreme Court heard oral arguments in Learning Resources v. Trump and Trump v. V.O.S. Selections on November 5, 2025, the justices were asked to decide a deceptively narrow question: Does the International Emergency Economic Powers Act (IEEPA) authorize the president to impose sweeping tariffs on national security grounds? But the oral arguments made clear that the consequences of the Court’s decision extend far beyond the IEEPA, reshaping the limits of executive power as well as US trade policy.

As we await this consequential decision, the Court is considering three questions that look simple but have broad consequences:

• Does the IEEPA authorize the use of tariffs?
• Has there been a violation of the US government’s separation of powers?
• If tariffs are deemed illegal, what happens to the more than $100 billion paid in tariffs by US importers?

Nothing in the oral arguments fundamentally altered this list. Across ideological lines, justices repeatedly pressed the government to identify where, exactly, IEEPA authorizes tariffs, a power the Constitution assigns to Congress. Several justices invoked the “major questions doctrine” and nondelegation concerns, signaling skepticism that Congress had quietly granted such sweeping fiscal authority through a statute used for sanctions, not revenue-raising.

At the same time, multiple justices explicitly raised the practical question: Even if the Court strikes down IEEPA tariffs, what stops the president from reimposing them under other statutes? The government’s answer was candid: nothing.

Since oral arguments, the Trump administration has been explicit that an adverse ruling would not mean tariff retreat. Officials have pointed to the three alternative pathways:

• Section 122 of the Trade Act of 1974, allowing temporary tariffs of up to 15% for balance-of-payments reasons—an authority never previously used
• Section 232, reopening or expanding national security investigations on specific industries
• Section 301, launching new unfair trade investigations

This fallback strategy underscores a central reality: The president retains expansive tariff powers even if the Supreme Court decisions would slow potential application.

But what could change if the Supreme Court does rule that some or all of the IEEPA tariffs are not allowed?

Renewed uncertainty. After a period of relative tariff stability, with US tariff rates jumping from approximately 2.5% in 2022-2024 to 16.9% since the fall of 2025, eliminating all or part of the IEEPA tariffs would reinject uncertainty for investments in US supply chains. In advance of the midterm elections, this would inject a new element into the US economy at a time when forecasts predict rising growth due to the One Big Beautiful Bill tax cuts.  

Refunds. The most critical issue for US companies is tariff refunds. On December 10, 2025, the Department of Justice revealed that the US Customs and Border Protection (CBP) had collected $129 billion from roughly 301,000 importers across more than 34 million entries. While affected parties would, in principle, be able to obtain refunds even on duties that have already been paid and liquidated, the DOJ notably did not suggest that CBP would make that process straightforward. Once these refunds were issued, importers and downstream buyers would then have to grapple with how to distribute them.

Challenges to other existing “national security” tariffs. A loss for the administration on IEEPA could bring new challenges to some existing Section 232 tariffs. During oral arguments, justices focused on statutory limits and evidentiary rigor—scrutiny that could spill over into 232 cases where the national security rationale is thin (the lumber case, which places tariffs on kitchen and bathroom cabinets) or the investigative record is widely viewed as weak (the automotives case, which was based on thin evidence from 2018). If the IEEPA falls due to overreach, litigants may next test whether the administration has also stretched 232 cases beyond its statutory and constitutional limits.

The Supreme Court’s ruling will matter, but tariffs will not disappear. A decision against IEEPA tariffs would curb one legal tool while accelerating others, trigger refund dynamics that carry political upsides and downsides for the administration, inject uncertainty into the US economy, and shift litigation risks to other trade laws. The real question is not whether tariffs survive the Court, but how the world will react when they return.

The views expressed herein are those solely of the author(s). GMF as an institution does not take positions.