What You Need to Know
- Key takeaway #1Clients should ensure continued compliance while planning for the possibility of revised or rescinded tariffs. Importers should take affirmative steps to preserve rights to potential refunds in the event the Supreme Court upholds the rulings of the lower courts.
Yesterday, the Supreme Court of the United States heard oral argument in the consolidated case challenging the use of the International Emergency Economic Powers Act (“IEEPA”) to justify sweeping import tariffs. At issue is whether IEEPA authorizes the President, upon declaring a national emergency, to impose tariffs and, if so, whether that delegation is constitutionally permissible.
Statutory and Constitutional Stakes
The dispute centers on two key questions:
- Whether IEEPA provides sufficient statutory basis for the imposition of tariffs under a declared emergency.
- If so, whether such authority is consistent with constitutional limits on the delegation of legislative power (the non-delegation doctrine).
The Government’s Position
The Government argued that under IEEPA, the President may regulate imports in response to an “unusual and extraordinary threat” to national security, foreign policy, or the economy. It contended that the tariffs in question serve a regulatory—rather than purely revenue-raising—purpose. In this framing, the levies function as tools of import control within an emergency or foreign-commerce context, rather than as conventional taxes. The Government further emphasized that Congress, in enacting IEEPA, intended to provide the President with the broad authority to address foreign-commerce threats, and that tariff measures fall within that regulatory framework.
The Challengers’ Position
The plaintiffs in the underlying cases countered that IEEPA does not explicitly authorize “tariffs” or “duties,” and that historically the power to impose tariffs and raise revenue has been reserved for Congress—a power expressly vested in Congress by Article I of the U.S. Constitution. They argued that, at the very least, the tariffs trigger the major-questions doctrine, an interpretative canon that requires clear congressional authorization in the text of the statute in order for the courts to construe the statute as delegating authority with vast economic and political significance to the executive branch. And even if the Court were to satisfy itself that Congress, in IEEPA, did delegate such authority to the President, the plaintiffs said it would violate the non-delegation doctrine because it does not impose any meaningful guidance or guardrails on the President’s exercise of that authority over the Article I tariff authority.
Themes in the Justices’ Questioning
The Justices’ questions reflected three main lines of concern:
- Statutory interpretation: whether IEEPA’s text can reasonably be read to confer tariff authority in the absence of express language referencing tariffs, and whether the major questions doctrine should factor into the Court’s interpretation (or whether, as the government contends, the major questions doctrine is not implicated when Congress delegates authority to the President that implicates the President’s own inherent Article II authority).
- Constitutional structure: whether granting the President authority to impose tariffs involves an impermissible delegation of legislative power, unbridled by an intelligible principle that would serve as a limitation on the President’s exercise of that authority.
- Emergency and foreign-affairs context: whether deference to the Executive is warranted given the national-security or foreign affairs implications, and whether that context alters the usual interpretive or structural constraints.
Implications for Clients
For importers, exporters, supply-chain participants, and other stakeholders affected by these tariffs, the outcome remains uncertain. First, the Court may decide as a matter of statutory interpretation that IEEPA does not authorize any tariffs, in which case the IEEPA tariff regime would come undone. Second, at the other extreme, the Court may decide that IEEPA authorizes tariffs and these particular tariffs are all lawful, in which the current status quo would remain in place. Third, the Court could reach some sort of middle ground, by which case it might hold that IEEPA authorizes tariffs but that one or more of the existing IEEPA tariffs cannot be justified on the existing record. Additional questions also remain, such as “Can the President use other trade authorities to impose similar-looking tariffs” and “If some or all of the existing IEEPA tariffs are ruled unlawful, can importers who paid those tariffs seek a refund and, if so, how?” It is less clear whether the Court’s decision will take up these questions, or if they’ll be addressed in any opinions of individual justices.
We would like to thank Senior Law Clerk Ani Mard for her contribution to the alert.
For further information, please contact:
Valerie Ellis, Crowell & Moring
vellis@crowell.com
