Court brief: Supreme Court IEEPA tariff case preview
Summary
A potential Supreme Court ruling as early as Friday could strike down a core pillar of Trump’s tariff policy.
The Core Legal Question:
At issue in two related cases before the court is whether the President can use a 1977 “emergency” law, the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs. The cases are similar but slightly different. We claim no legal expertise, but some basic context is helpful here especially in the result of a split verdict: In one case (Learning Resources, Inc. v. Trump), the question is whether IEEPA even authorizes tariffs and if that delegation of power is constitutional in the first place. The other case (Trump v. V.O.S. Selections) essentially accepts the IEEPA but contends that “regulating” imports is not the same thing as “taxing” them. Their contention is that only Congress has the power to tax.
The decision could come around 10am Friday (1/9). We expect there is a greater likelihood the court rules against this set of tariffs, and we unpack a few key points to be aware of ahead of the potential decision below.
Our primary takeaway is even if the court rules in favor of the importers who brought the challenges, uncertainty about the timing and mechanics of refund distributions, not to mention the eventual implementation of new tariffs through different channels, suggests to us that a ruling striking down the tariffs is not apt to bring lasting relief to the importers who brought the suit in the first place.
Author
Wells Fargo Research Team
Wells Fargo
