The U.S. Supreme Court is likely due to make a final decision on President Donald Trump‘s sweeping tariffs after a U.S. appeals court ruled on Friday that they were illegal.
Treasury Secretary Scott Bessent told Reuters on Monday he was confident the Court would uphold the administration’s tariffs but added that the White House has a backup plan if it renders the tariffs legally void.
Why It Matters
Friday’s decision from the appeals court complicates Trump’s ambition to fully upend decades of U.S. trade policy. He has other legal tools at his disposal, such as provisions in the 1974 Trade Act, but those authorities are narrower and limit how quickly and severely a president can act. Trump’s tariff policy has rattled global markets, strained ties with U.S. allies and trading partners, and fueled concerns of higher consumer prices and slower economic growth.
At the same time, the levies have been central to Trump’s trade strategy. He has used them to pressure the European Union (EU), Japan and others into what he touts as favorable trade deals, while saying that tariffs have funneled tens of billions of dollars into the U.S. Treasury to offset the sweeping tax cuts he signed into law on July 4.
What To Know
The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., ruled against Trump’s tariffs 7-4. The decision applies to the “reciprocal” tariffs issued in April as well as those implemented in February against China, Canada and Mexico in an attempt to stop imports of fentanyl.
The tariffs issued on steel, aluminum and automobiles are unaffected by the ruling.
Bessent told Reuters that he was working on a legal brief for the U.S. solicitor general who is overseeing the government’s appeal to the Court. The brief is said to take into account America’s history of trade imbalances and the need to stop fentanyl from coming into the U.S.
The decision largely upholds the May ruling by the U.S. Court of International Trade in New York that found Trump’s use of the International Emergency Economic Powers Act (IEEPA) to justify tariffs “exceed any authority granted to the President.”
Both sets of tariffs were passed under Trump’s use of the 1977’s IEEPA. That law gives the president the power to act against “unusual and extraordinary” threats.
In its ruling, the U.S. appeals court wrote: “It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs. The statute neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President’s power to impose tariffs.”
Bessent said Monday that if the Court blocks the tariffs under the IEEPA, the administration could also call on Section 338 of the Smoot-Hawley Tariff Act of 1930. This permits the president to impose tariffs of up to 50 percent for five months against countries that are believed to discriminate against the U.S.
Since fentanyl is connected to the deaths of around 70,000 people in the U.S. per year, this also could work as a reason for the Trump administration to call the tariffs necessary to address an emergency.
“If this is not a national emergency, what is?” Bessent said. “When can you use IEEPA if not for fentanyl?”
Revenue from Trump’s tariffs have amounted to $142 billion as of July, which was more than double at the same time last year.
What People Are Saying
Treasury Secretary Scott Bessent told Reuters: “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.”
President Donald Trump wrote on Truth Social on Monday morning: “More than 15 Trillion Dollars will be invested in the USA, a RECORD. Much of this investment is because of Tariffs. If a Radical Left Court is allowed to terminate these Tariffs, almost all of this investment, and much more, will be immediately canceled! In many ways, we would become a Third World Nation, with no hope of GREATNESS again. TIME IS OF THE ESSENCE!!!”
Robert Shapiro, a political science professor at Columbia University, told Newsweek: “Bessent is engaged in partisan wishful thinking, counting on the Supreme Court to uphold executive power…The exception of emergency power here is a stretch—what emergency? The lower courts have seen this. Luckily for Trump, the tariff has appeared to have marginally affected prices and jobs so far, but this is all poised to get worse.”
He added: “Losing the case will be a setback for what Trump has tried to do and will be portrayed as such, but the irony may be that ending large tariffs will prevent inflation which would have hurt Trump’s and the Republicans‘ perceived performance going into the midterm elections.”
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “Given past rulings over the last year, some may see the Court’s decision as a foregone conclusion in favor of the President’s policy, but that may not be as clear as some assume.”
He added: “After all, this is more of a question of whether executing the tariffs under this prior act is legal, not if the President can just make tariffs in general. The Court’s decision will set the future precedent for how heavily the executive branch can be involved in tariffs.”
What Happens Next?
Bessent’s brief to the U.S. solicitor general will be submitted Tuesday or Wednesday, according to Reuters.
“We’ve had these trade deficits for years, but they keep getting bigger and bigger,” Bessent said. “We are approaching a tipping point…so preventing a calamity is an emergency.”
The appeals court’s ruling does not take effect until October 14.
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