ISTANBUL
The US Supreme Court heard arguments for President Donald Trump's tariffs case Wednesday, as justices voiced doubts about the legality of the penalties imposed by the president against most foreign countries.
Solicitor General D. John Sauer, who defended Trump's policy, was questioned by conservative and liberal justices about how the Trump administration implemented the tariffs, which they claimed violate Congress' taxing authority.
Trump did not have the legal power under the International Emergency Economic Powers Act (IEEPA) to impose fentanyl taxes on goods from Canada, China and Mexico, as well as reciprocal duties on imports from US trading partners, according to previous lower court rulings. The rulings were suspended by the US Court of Appeals for the Federal Circuit, giving the Trump administration time to appeal to the Supreme Court.
"These are regulatory tariffs. They are not revenue-raising tariffs," said Sauer, who defended the tariff policy that is based on the authority to control international trade. “The fact that they raise revenue was only incidental," he said.
One of the three liberal judges on the Court, Sonia Sotomayor, told Sauer: “You say tariffs are not taxes, but that’s exactly what they are. They’re generating money from American citizens, revenue," adding that only Trump has utilized the IEEPA to levy tariffs.
One of the six conservative justices, Neil Gorsuch, questioned Sauer about Trump's unilateral imposition of the tariffs without congressional approval, citing an international emergency.
“What happens when the president simply vetoes legislation to take these powers back?" Gorsuch asked.
Sauer was also under pressure from other conservatives, including Chief Justice John Roberts and justices Amy Coney Barrett, Brett Kavanaugh and Samuel Alito.
The justices questioned Sauer for more than an hour before Neal Katyal, the plaintiffs' attorney, started presenting his case.
"Tariffs are taxes," Katyal began, reiterating the point that several justices had brought up against Sauer. “Our founders gave that taxing power to Congress alone.”
Later, Katyal said: "We don't think IEEPA allows this junking of the world-wide tariff architecture."
Justice Brett Kavanaugh asked why the president may not be able to impose tariffs on foreign nations but can set trade embargoes, which raised questions about presidential powers at the hearing.
"Why would a rational Congress say: 'We will give the president the power to shut down trade? ... but can't do a 1% tariff," he asked.
"That leaves, in the government's words, an 'odd doughnut hole' in the statute," he noted. "That does not seem to have a lot of common sense behind it."
The Supreme Court will not issue a ruling Wednesday, and the timing of the ruling is not certain.
Trump's tariffs, possible outcomes
Starting at 10% for many countries, the tariffs have been raised to 50% for items from Brazil and India.
As of September, which marked the end of the fiscal year, the US generated revenues of $195 billion from tariffs. From February - September, around $176 billion entered the Treasury Department from tariffs.
On Tuesday, Trump described the case as “literally, life or death” for the country, emphasizing what he sees as critical stakes for its economic and national security.
In a post on his Truth Social platform, Trump said a favorable ruling would provide “tremendous, but fair, financial and national security,” while a loss would leave the US “virtually defenseless against other countries who have, for years, taken advantage of us.”
Those opposing the tariffs argue that interpreting the IEEPA’s authority to regulate imports in emergencies as allowing the president to impose unilateral tariffs at a global scale raises constitutional issues; however, the Trump admin argues that reciprocal tariffs were fully compliant with the law.
If the court rejects Trump’s argument, the president will not be able to leverage IEEPA for future tariffs.