Congress won’t stop him. Voters can’t. And most of the nation’s top business leaders are staying mum. But there’s a chance the US court system will knock down President Trump’s punishing tariff regime, or at least dial it back.
There are now at least seven lawsuits challenging the vast array of new import taxes Trump has levied on some $3 trillion worth of imports. The plaintiffs include a group of blue states, a handful of small businesses, and a Native American tribe. As with many other Trump matters, the basis for action is Trump’s aggressive use of presidential authority. The Supreme Court may be the ultimate decider.
Trump has imposed tariffs much faster than he did during his first term because he’s using a novel justification for doing so. Trump’s 2025 tariffs are based on a 1977 law called the International Emergency Economic Powers Act, or IEEPA, which Congress passed to provide firm guidelines on a president’s emergency powers. During his first term, Trump used different laws to justify new tariffs on imports, which took longer and required more procedural steps.
IEEPA doesn’t mention the word “tariff” or say anything about a president’s power to impose taxes, which normally rests with Congress. It doesn’t forbid those things, either. What the law does say is that a president must formally declare a national emergency to justify the use of IEEPA, which unlocks many powers the president wouldn’t otherwise have.
Trump has declared at least eight national emergencies and used those declarations to justify many of the tariffs he has imposed so far this year. He declared emergencies relating to illegal migration, along with opioid and fentanyl shipments into the United States, to justify tariffs on imports from Mexico, Canada, and China. Another emergency declaration set the stage for the April 2 “Liberation Day” tariffs on dozens of trading partners. In that case, Trump claimed that the emergency is “large and persistent” annual trade deficits.
The lawsuits challenge Trump’s tariffs on three basic levels, according to Scott Anderson of Lawfare and the Brookings Institution. One is that IEEPA doesn’t include the imposition of tariffs as an emergency presidential power. Another challenge is that Trump is claiming national emergencies when there are none. Some of the suits also challenge the validity of the 1977 law itself.
None of those arguments is a slam dunk. But the plaintiffs could gain traction by arguing that Trump’s arbitrary imposition of tariffs, in an on-again-off-again fashion, is weakly connected to the so-called emergencies he has declared.
“The reason this is so vulnerable to legal challenges is that they’ve taken such broad universal action based on the premise of a national emergency,” Anderson said. “It strains credulity for what constitutes a national emergency.”
While some of the plaintiffs may seem obscure, they are reportedly backed by well-funded interest groups that can afford to hire prominent lawyers. And the two state-based suits, led by California and Oregon, are meant to represent the broad public interest by defending individuals harmed by the tariffs.
“It is not just a question of deep-pocketed private interests,” research firm Capital Alpha partners explained in an April 28 analysis. “We think the state cases are worthy of special attention because they bring public resources to the table and can easily sustain a battle all the way to the Supreme Court.”
To many economists and business operators, there’s no emergency requiring any change to the nation’s trading system. Before Trump took office, the US economy was performing well, with a bout of inflation dissipating as growth and employment held up. By many measures, the US economy is the world’s most dynamic.
Trump describes America’s $1.2 trillion trade deficit in goods as a “loss” he wants to rectify. But it’s not a loss. Trade deficits merely represent transactions in which Americans pay foreign producers for stuff they want. Foreigners get dollars, and end up investing many of them back into the US economy via stock and bond purchases. If there’s any economic emergency, it’s Trump’s own policy, which has raised the average tariff on imports from 2.5% to 27% and begun to damage the economy in numerous ways. Recession odds have jumped from 27% when Trump took office to more than 60%.
Courts are unlikely to focus on economic arguments, however, or dictate what, exactly, constitutes a national emergency. Instead they’ll most likely focus on whether the tariffs as Trump has applied them are a reasonable way to address the emergencies that Trump claims exist.
Mr. Emergency: President Donald Trump as he leaves the White House en route to attend a rally in Macomb County, Mich., to mark the 100th day of his second term in office. (AP Photo/Manuel Balce Ceneta) ·ASSOCIATED PRESS
There is a range of possible outcomes that could cheer or distress investors. Courts could block some of the Trump tariffs as early as this summer, pending a final legal outcome. “An injunction ordered by any of these courts would be a setback for Trump,” Capital Alpha partners said. If there is an injunction, the Trump administration would probably try to fast-track the matter to the Supreme Court for a definitive ruling.
The litigation could also move more slowly with courts ruling in favor of Trump. The plaintiffs could appeal until they get to the Supreme Court, but the high court wouldn’t necessarily take the case if lower courts had already ruled against the plaintiffs.
There could also be partial rulings that make a confusing matrix of tariffs even gnarlier. Courts could rule against the tariffs but only in certain jurisdictions, for instance, or only regarding certain plaintiffs. If courts do strike down Trump’s use of IEEPA to justify tariffs, it won’t be the end of Trump’s trade war. That may simply force Trump to tighten his rationale for tariffs in ways more likely to survive legal challenges. “You could see them using IEEPA in more targeted ways,” Anderson said. “If they can build a somewhat more credible claim of a national emergency, then the tariffs would become much more defensible.”
To lawyers, anyway.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman.
