As countries from Asia to Europe wrestle with the weight of US tariffs, a case in the US Supreme Court could decide whether presidents like Donald Trump ever had the power to unleash these trade weapons in the first place.

The US Supreme Court is hearing a case that could reshape the way America uses tariffs as a tool in trade. The matter at stake is not whether tariffs are allowed at all but who has the constitutional authority to impose them.

The outcome could impact many businesses in the US and exporters in other countries, including India, who face high duties on their goods.

CASE ABOUT POWER AND CONSTITUTION

Russell A. Stamets, Partner at Circle of Counsels, explained that the case is about the balance of power between the executive branch and the legislature.

“This is case about the separation of powers between the executive branch and the legislative branch,” he said. “President Trump has shown a desire to push the traditional boundaries that separate the branches of government and to arrogate those powers to himself as the president. This case is simply another testing the legality of that approach.”

The core of the issue lies in the International Emergency Economic Powers Act (IEEPA), which was used by Trump to impose many tariffs. Courts have ruled that this power should belong to Congress, not the president.

The Federal Circuit Court already ruled 7-4 that Trump lacked authority under IEEPA, and the case now heads to the Supreme Court for the final word.

WILL TRUMP TARIFFS BECOME ILLEGAL?

If the Supreme Court upholds the lower court ruling, most of the Trump-era tariffs under IEEPA will be cancelled.

However, Stamets made it clear that this won’t apply to other kinds of tariffs. “This won’t affect tariffs imposed under different laws, such as so-called Section 232 tariffs, which are imposed based on national security concerns, or 301 tariffs, which are imposed to retaliate against foreign unfair trade practices.”

“This ruling could provide immediate relief to importers, though the government could seek back duties if the Supreme Court later reverses the lower court,” Stamets said. He added that firms who have already paid duties would likely seek a refund if the lower court decision holds.

Russell Stamets pointed out the real business challenge. “Many U.S. businesses, small and large, rely on a global supply chain that has been severely disrupted by the Trump tariffs. Many of those businesses have been unable to find alternatives to their traditional supply chains from abroad.”

He also explained how the cost of tariffs ends up affecting consumers.

“Those businesses will welcome any repeal of the tariffs. We’ve reached the point where businesses of all sizes will be forced to pass along the cost of tariffs to consumers. The potential cost of that is estimated to cost the average American taxpayer Rs 1,200 to Rs 2,800 per household in 2025.”

WHAT ABOUT INDIA AND OTHER EXPORTERS?

Stamets said the ruling’s impact would stretch beyond the US.

“Tariffs imposed under the IEEPA would fall away unless authorised by additional Congressional action. There is no reason to think President Trump will not seek other ways to accomplish his goals, including strong-arming the compliant legislature.”

This leaves exporters from India, especially in textiles, jewellery, and engineering products, hoping for relief, though some uncertainty will remain if other methods of imposing tariffs are used.

Stamets warned that the case could influence future presidential powers over trade policy. “The case raises fundamental constitutional questions about executive authority and congressional delegation,” he said.

He added that the government has argued blocking IEEPA tariffs would harm US foreign policy and national security, but Stamets called that “not very credible.” He also noted, “The Supreme Court has demonstrated what can be described charitably as an unprecedented deference to President Trump’s wishes.”

All eyes are now on the Supreme Court as it prepares to make a decision that could change the way trade policy is shaped in the US. In the meantime, businesses, both in the US and around the world, remain cautious about future uncertainty and the potential ripple effects of the ruling.

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