Donald Trump escalates tariff battle to US Supreme Court

Last Wednesday (3 September EDT), US President Donald Trump asked the US Supreme Court to overturn a lower court decision that found his signature tariff policy to be illegal.

In its Supreme Court petition, the US administration argued that a reversal of the tariff policy could worsen federal deficits and jeopardise its foreign policy agenda.

“[I]f the United States were forced to pay back the trillions of dollars committed to us, America could go from strength to failure the moment such an incorrect decision took effect,” Trump said, as quoted in the petition.

“The economic consequences would be ruinous.”

Over the course of 2025, US President Donald Trump has used emergency economic powers under the International Emergency Economic Powers Act of 1977 (IEEPA) to impose numerous tariffs on US trading partners without congressional approval.

If the appeals court decision were to be upheld, the US tariffs could be rendered void by 14 October (EDT), and the US could be forced to refund billions to affected importers. As of 24 August 2025, US Customs and Border Protection had collected over $72 billion in IEEPA tariffs.

It would also cut the flow of tariff revenue, which the administration was partially relying upon to fund its hefty tax cuts and spending bill, which the Congressional Budget Office (CBO) estimated would add approximately $3.3 trillion to the US budget deficit by 2034.

Citing CBO figures, the US administration argued that the tariffs could reduce US federal deficits by as much as $4 trillion in the coming years.

The administration also argued that the tariffs’ removal would be detrimental to the US economy and foreign policy.

“[The ruling] has jeopardized ongoing foreign negotiations and threatens framework deals,” its Supreme Court petition read.

“Left undisturbed, the [trade court decision] would, in the President’s view, unilaterally disarm the United States and allow other nations to hold America’s economy hostage to their retaliatory trade policies.”

In May, the US Court of International Trade (CIT) found that Trump’s use of the emergency powers to impose tariffs had been unauthorised under US law. On 29 August (EDT), the US Court of Appeals for the Federal Circuit upheld the trade court ruling, affirming that the tariffs were illegal.

In its Supreme Court petition, the US administration said the decision to void the tariffs would upend the country’s trade agenda and cause “uncertainty.”

“That decision casts a pall of uncertainty upon ongoing foreign negotiations that the President has been pursuing through tariffs over the past five months, jeopardizing both already negotiated framework deals and ongoing negotiations,” the petition read.

However, economists have largely agreed that Trump’s volatile trade policy was itself a great source of economic uncertainty.

In February, Australia’s Reserve Bank noted that global trade policy uncertainty was at a 50-year high due to Trump’s tariff agenda. Commonwealth Bank economists found that US tariffs would spark economic slowdowns, both domestically within the US and for its closest trading partners.

In its petition, the US administration argued that Trump’s use of emergency powers to impose tariffs at his own whim was nothing to be concerned about.

“There is nothing new or suspect about IEEPA’s broad delegation of tariff authority to address national emergencies,” the petition read.

This argument diverged from the CIT’s ruling, which warned that the Trump administration’s interpretation of IEEPA provisions gave the executive branch an "unconstitutional delegation of power.”

The court warned that the Trump administration’s interpretation of the emergency powers made them “trivially easy” to invoke.

“If ‘deal with’ can mean ‘impose a burden until someone else deals with,’ then everything is permitted,” the court said.

“It means a President may use IEEPA to take whatever actions he chooses simply by declaring them ‘pressure’ or ‘leverage’ tactics that will elicit a third party’s response to an unconnected ‘threat.’”

Last week, US Treasury Secretary Scott Bessent told Reuters he expected the Republican-leaning Supreme Court to rule in support of the tariffs.

"I'm confident the Supreme Court will uphold it - will uphold the president's authority to use IEEPA. And there are lots of other authorities that can be used - not as efficient, not as powerful," he said.