On Nov. 5, 2025, the Supreme Court heard oral argument in the consolidated tariff cases. This article addresses a few notable points made during the argument and examines the underpinnings of each. On balance, it appears the Supreme Court will not uphold the reciprocal and fentanyl tariffs imposed by the president under the International Emergency Economic Powers Act (IEEPA), though there are other more complicated means to a similar end. The Court’s decision is expected early in the new year.
Justice Barrett inquired of the Solicitor General Sauer (SG) where there is any other place in the code where the words “regulate importation” confer tariff-imposing authority. The SG noted it exists in the Trading with the Enemy Act (TWEA) as interpreted in Yoshida and IEEPA. In Yoshida, the Court of Customs and Patent Appeals held that President Nixon had the authority to impose a 10% import duty surcharge under TWEA’s authority to “regulate ... importation.” Nevertheless, Yoshida made clear that each presidential proclamation must be evaluated on its own facts and circumstances. In that case, the measure issued under TWEA was temporary, did not supplant the entire tariff scheme of Congress, and did not apply to all imports, but only those imports already subject to tariffs. Yet, despite such limitations, the Yoshida court recognized that there was a broad grant of authority under TWEA, and said: “[t]hough such a broad grant may be considered unwise, or even dangerous, should it come into the hands of an unscrupulous, rampant president, willing to declare an emergency when none exists, the wisdom of a congressional delegation is not for us to decide.”
Justice Gorsuch characterized the IEEPA tariffs as a “one-way ratchet” meaning that, if the Supreme Court permits the president to impose unfettered tariffs by virtue of IEEPA’s use of the words “regulate importation,” the executive branch will effectively possess that power indefinitely. Justice Gorsuch noted that the only way Congress could take back that power would be by way of a supermajority of Congress overriding a presidential veto. Congress would have delegated its Article I taxing authority to the president, who does not possess it under Article II.
Justice Kagan noted that there is no language in IEEPA that authorizes “raising revenue.” Further, Justice Kagan noted that “when the Code uses ‘regulate,’ we don’t typically understand it to refer to duties or taxes or tariffs or anything of the kind.” In response to a question by Justice Sotomayor, the SG agreed that the president does not have the constitutional authority to impose tariffs on “exportations.” She than asked the SG that if the language is in the conjunctive, that is, IEEPA says “regulate importations and exportations,” “why are we permitting them to do it with respect to importations?” Relying on earlier cases, Gibbons v. Ogden, McGoldrick, and Board of Trustees, the SG said “[w]hen you’re regulating imports, tariffing is a core application of that.” Gibbons delegated to the president foreign commerce power, which the SG argued subsumes the power to impose tariffs. McGoldrick v. Gulf Oil noted that “[t]he laying of a duty on imports, although an exercise of the taxing power, is also an exercise of the power to regulate foreign commerce”, though the Court addressed the issue in the context of the “Congressional regulation of the commerce” and struck down a state tax that infringed on such regulation. Board of Trustees of University of Illinois v. United States stands for the proposition that Congress may impose duties in “the exercise of the power to regulate commerce.” The case addressed the university’s contention that it was immune from federal taxation on scientific equipment; the Court held that the university was not relieved of the obligation to pay duties on imported goods. In discussing these cases, Justice Barrett said: “None of those cases talked about it as conferring tariff authority. I understood you to be citing McGoldrick and Gibbons and those cases just to show that it’s possible to say that “regulating commerce” includes the power to tariff.” The SG argued that “[w]hen you’re regulating imports, tariffing is a core application of that” and that it “would be kind of astonishing to say, hey, president, you can regulate imports, but ... you do not have the power to tariff when the, the tariffing is the, in many ways, the quintessential way of regulating importation.” The SG said:
And I want to make a very important distinction here.We don’t contend that what’s being exercised here is the power to tax. It’s the power to regulate commerce. These are regulatory tariffs. They are not revenue-raising tariffs. The fact that they raise revenue is only incidental.
It is difficult to see the difference between regulatory tariffs and revenue-raising tariffs when the administration’s intent is to raise trillions of dollars through the imposition of reciprocal and fentanyl tariffs.
There was considerable discussion about licenses and licensing fees. Shippers’ counsel Katyal conceded that licensing fees were analogous to tariffs. IEEPA and TWEA permit the regulation of importation by “instructions, licenses, or otherwise.” Justice Barrett asked shippers’ counsel: “Could the president regulate commerce under IEEPA by using licensing fees?” Katyal clarified that there is a difference between licenses and licensing fees: “IEEPA and TWEA authorize licenses, not license fees. And no president has ever charged, to my knowledge, fees under those two statutes for the licenses. So fee is impermissible. License is okay.” Licenses deal with permission. Licensing fees recoup the cost of government services and may raise revenue, licenses do not. Katyal noted that the government asserts a power that “raises $4 trillion.” The argument follows that raising revenue is the power to tax, which lies exclusively with Congress under Article I.
While arguing that imposing tariffs is very similar to “licensing,” the SG noted that the government’s principal argument was that the president could impose tariffs through the words “regulate importation.” Yet when read in context, the method of regulation is by “instructions, licenses, or otherwise.” It is not by licensing fees.
Justice Barrett also challenged the SG with respect to the employment of reciprocal tariffs, which were predicated upon threats to the defense and industrial base. She then asked “I mean, Spain, France?I mean, I could see it with some countries, but explain to me why as many countries needed to be subject to the reciprocal tariff policy as are?” The SG argued that the president’s executive order 14257 spells out the nature of the emergency—the lack of reciprocity in trade and the hollowing out of the nation’s industrial base.
Chief Justice Roberts addressed the major questions doctrine and the Government’s dismissal of it in the context of foreign affairs. The major-questions doctrine applies when the underlying claim of authority by the Executive Branch concerns an issue of “vast economic and political significance”, and Congress has not clearly empowered the agency with authority over the issue. In such circumstances, agencies must point out Congressional authorization for their actions in major-questions cases. Chief Justice Roberts noted that the doctrine “might be directly applicable” and that the administration is claiming a source in IEEPA,
that had never before been used to justify tariffs. No one has argued that it does until this—this particular case.Congress uses tariffs in other provisions but—but not here. And yet—and correct me if I’m not right about it—the justification is being used for a power to impose tariffs on any product from any country for, in any amount for any length of time. ... it does seem like that’s major authority ... So why doesn’t it apply again?
The SG noted that the president has broad authority in the foreign affairs realm, including foreign-arising emergencies, and that the Court has never applied the major-questions doctrine in the context of foreign policy. The president has broad Article II power, and a “sweeping delegation” of authority from Congress to regulate foreign commerce. The SG noted that there are a series of triggering conditions that have been identified by the Court, including that the power at issue was “unheralded,” which is not the case here because President Nixon imposed tariffs under TWEA and Congress recodified the language to “regulate importation” two years later. Nevertheless, in response to questions from Justice Gorsuch, the SG admitted that the president does not have inherent authority over tariffs in peacetime, but that Congress can delegate that authority to him, as he contends it did in IEEPA in using the phrase “regulate importation.”
Justice Alito asked the shipper’s counsel about Section 338 of the Tariff Act of 1930: “Why doesn’t the plain language of that provision, which does speak specifically about duties, provide a basis for all or virtually all of the tariffs that are at issue here?” Mr. Katyal noted that the government has never made that argument and for good reason because it only applies to most favored nation (MFN) violations, where a tariff is available only if the president finds that a country discriminates against the United States. And further noted that Sections 252 and 301 (of the Trade Expansion Act of 1962) are understood by many to have superseded Section 338. Katyal deflected Justice Alito’s question by noting that he was here to address the one statute raised by the government, IEEPA. If the administration later raises Section 338, “at that point, we’d have that case. ... I’m responding to the government’s argument, which is the invocation of IEEPA and IEEPA alone.” Section 338 is part of the Smoot-Hawley Tariff Act, now codified in 19 U.S.C. Section 1338(d), which empowers the president to impose retaliatory tariffs of up to 50% on goods from countries that discriminate against the United States. Among other trade agreement authority, Section 252 of the Trade Expansion Act of 1962 grants the president authority to respond to foreign import restrictions that unjustifiably oppress U.S. agricultural products and impose “duties or other import restrictions” on foreign products to remove foreign import restrictions and gain fair access to the discriminating markets. Section 301 of the Trade Expansion Act of 1962 created a mechanism to petition for tariff adjustments with the Tariff Commission.
The Court also addressed a variety of questions about the nondelegation doctrine, which provides that Congress may not transfer to another branch “powers which are strictly and exclusively legislative,” though it does allow Congress to “confer substantial discretion on executive agencies to implement and enforce the laws.” There must be an “intelligible principle” that guides the use of the discretion Congress is delegating. The SG argued that the nondelegation doctrine does not apply with as much force to foreign affairs as Justice Kavanaugh said in one of his opinions because the Court has been comfortable with very broad delegations in that context. Justice Kagan noted in the Consumer’s Research case decided last year that if there was no ceiling on the much smaller tax in that case, it would raise a delegation problem. And so, she asked the SG if the tax has no ceiling, the tax “can be anything,” such a tax “would raise a pretty deep delegation problem?” Among other things, the SG said in response:
First of all, I can't say enough, it is a regulate-regulatory tariff, not a tax, and that, I think, ties to my response to that, which is that this is a totally different context. This is IEEPA, a statute that Congress carefully crafted to grant the president admittedly broad powers to address foreign-arising emergencies. It's outward-facing to foreign affairs, where there's the broadest level of deference to the political branches that this Court has recognized in many cases.
Justice Gorsuch noted that the SG conceded that there is some nondelegation principle and therefore major questions as well, to which the SG said; “If so, very limited, you know, very, very, deferential.” Shipper’s counsel countered that any delegation of tariff authority must be done with intelligible principles, which do not exist with respect to IEEPA:
And what you just heard my friend say is every single limit in IEEPA is one that is not judicially enforceable, there's no limit whatsoever, and, indeed, the main limit that was in there—he calls this some compromise position—the only compromise in 1977 was the legislative veto. And, as this case comes to the Court, that's no longer in the statute at all.
Section 232 of the Trade Expansion Act of 1962 also garnered considerable attention primarily by way of a discussion of the Court’s decision in Federal Energy Administration v. Algonquin SNG, which held that the president has the power under Section 232(b) to impose licensing fees where specific imports threatened to impair national security. In that case, the issue was the flood of imported crude oil and its derivatives in 1975. The Court held that the standards provided by Section 232(b) to the president “in its implementation are clearly sufficient to meet any delegation doctrine attack.” Section 232 does not use the word “tariff.” In a discussion with Justice Kavanaugh, Shippers’ counsel Katyal noted that Algonquin expressly addressed a trade statute, which included specific reference to duties in a separate provision, but noted that the Court went painstakingly through all the limits:
the first words of the decision are all about how constrained the statute is. It’s a reticulated scheme. The cabinet secretaries have to make certain findings. There are specific statutory factors congress says the president must look at before acting. There are public hearings. There are limited remedies 'to the extent necessary.' ... All of that is in the statute. All of that is in the Algonquin decision. None of it is in IEEPA. That’s the problem. ... the Algonquin case said this is a very limited decision limited to just its facts.
Justice Kavanaugh engaged in an exchange with shippers’ counsel Gutman noting that his interpretation of IEEPA would allow shutting down trade but would not permit imposing a 1% tariff. He said that leaves “in the government’s words in its brief, an odd donut hole in the statute.” Gutman replied, “it’s a fundamentally different power. It’s, it’s not a donut hole; it’s, it’s a different kind of pastry.” Justice Kavanaugh noted, however, that “Congress has repeatedly said a tariff on foreign imports is an exercise of the commerce power, not of the taxation power.” Gutman responded that “the federal government hasn’t identified a single other federal statute that uses the term regulate to authorize tariffs or taxes. That is just a different kind of power.” Justice Jackson chimed in that “it’s a different kind of power that’s being authorized by this statute [IEEPA] is the power to control or freeze trade.” Gutman responded that the concern is “about the abuse of the power to impose unlimited taxes with no, with, with sort of no controlling principle.”
On balance, the Court overall appeared skeptical about the broad scope of the government’s claim that “regulate importation” in IEEPA delegates unlimited tariff authority upon the president. There are mechanisms within the trade acts, for example, Sections 232 and 338 discussed above, that permit the imposition of tariffs within constraints defined by Congress. IEEPA’s constraints are illusory or as Justice Gorsuch said it best amount to a “one-way ratchet” that would transfer Article I’s taxing power to the president that Congress, as a practical matter, cannot get back. The Court’s decision will have profound implications for the future course of this administration’s economic policies and more importantly for the constitution itself.
“One-Way Ratchet and a Different Kind of Pastry: Trump Tariffs at the Supreme Court,” by Keith Letourneau was published in Texas Lawyer on November 12, 2025.
Reprinted with permission from the November 12, 2025, edition of the Texas Lawyer © 2025 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited.
