Trump’s Tariff Authority Faces Its Biggest Legal Test Yet — And the Supreme Court May Not Rule Until 2026

The Trump administration’s sweeping tariff regime, which has reshaped global trade flows and rattled financial markets for months, now faces a constitutional reckoning that could take more than a year to resolve. A legal challenge working its way through the federal courts argues that President Donald Trump exceeded his statutory authority under the International Emergency Economic Powers Act (IEEPA) when he imposed broad tariffs on virtually all U.S. trading partners. But the timeline for a definitive Supreme Court ruling stretches well into 2026, leaving businesses, investors, and foreign governments in a prolonged state of uncertainty.

The case, brought by a coalition of importers and trade groups, strikes at the heart of the president’s claim that he can use emergency powers to impose tariffs without specific congressional authorization. The legal question is deceptively simple: Does IEEPA, a 1977 law designed to give presidents tools to respond to national emergencies involving foreign threats, actually grant the authority to levy tariffs? The administration says yes. Critics say the statute was never intended to serve as a blank check for trade policy, and that the Constitution vests the power to regulate commerce and impose duties squarely with Congress.

A Legal Challenge With Enormous Economic Stakes

As Business Insider reported, the legal battle over Trump’s tariff authority could drag on for an extended period, with the Supreme Court unlikely to issue a final ruling before its 2025-2026 term — meaning a decision may not come until the spring or summer of 2026. In the meantime, the tariffs remain in effect, and businesses must continue to absorb or pass along the added costs. The effective tariff rate on Chinese goods has soared past 145%, while a baseline 10% tariff applies to imports from most other countries, with higher reciprocal rates imposed on dozens of nations before a 90-day pause was announced in April 2025.

The financial implications are staggering. According to estimates from the Yale Budget Lab and the Tax Foundation, the current tariff structure amounts to the largest tax increase on American consumers and businesses in decades. Companies across sectors — from retail and agriculture to automotive and technology — have warned of supply chain disruptions, higher input costs, and compressed margins. The S&P 500 experienced significant volatility in the weeks following the initial tariff announcements, and consumer confidence surveys have shown marked declines as prices on imported goods rise.

The Court of International Trade Fires the First Shot

The first major judicial ruling came from the U.S. Court of International Trade (CIT), a specialized federal court based in New York that handles trade disputes. In a decision that drew widespread attention, a three-judge panel found that the administration’s use of IEEPA to impose tariffs likely exceeded the statute’s scope. The court noted that while IEEPA grants broad emergency powers, its text and legislative history suggest Congress did not intend to delegate tariff-setting authority through the law. The judges pointed to the fact that Congress has enacted specific statutes — such as Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962 — to authorize tariffs under defined circumstances, and that reading IEEPA as an additional, unconstrained tariff tool would render those targeted statutes largely superfluous.

The administration appealed the CIT’s ruling to the U.S. Court of Appeals for the Federal Circuit, which has exclusive jurisdiction over appeals from the trade court. Legal observers expect the Federal Circuit to hear arguments in the coming months, but even an expedited schedule would push a ruling into late 2025 or early 2026. From there, the losing side is virtually certain to seek Supreme Court review, adding additional months to the timeline. The Supreme Court’s current term ends in June 2025, and if a petition for certiorari arrives after that, the case would likely be calendared for the October 2025 term, with oral arguments and a decision stretching into 2026.

Constitutional Scholars Weigh In on the Nondelegation Doctrine

The case has attracted intense interest from constitutional law scholars, many of whom see it as a potential vehicle for the Supreme Court to revisit the nondelegation doctrine — the principle that Congress cannot hand off its legislative powers to the executive branch without providing an “intelligible principle” to guide the exercise of that authority. The nondelegation doctrine has been largely dormant since the New Deal era, but several current justices, including Justices Neil Gorsuch and Clarence Thomas, have signaled interest in reinvigorating it.

If the Court takes up the tariff case and applies a stricter version of the nondelegation doctrine, the implications would extend far beyond trade policy. A ruling that Congress must provide clearer guidelines when delegating economic emergency powers could affect the president’s authority under a range of statutes, from sanctions law to export controls. “This case sits at the intersection of trade law, constitutional structure, and executive power,” said Ilya Somin, a law professor at George Mason University, in comments reported by multiple legal outlets. “However the Court rules, the decision will shape the boundaries of presidential authority for years to come.”

The Administration’s Defense: National Security and Economic Emergency

The Trump administration has mounted a vigorous defense of its tariff actions, arguing that the persistent U.S. trade deficit, particularly with China, constitutes a national emergency that threatens American economic security and industrial capacity. Administration officials have pointed to the decline of domestic manufacturing, dependence on foreign supply chains for critical goods, and what they describe as unfair trade practices by major trading partners as justifications for invoking IEEPA.

In court filings, the Justice Department has argued that IEEPA’s text is broad enough to encompass tariffs, noting that the statute authorizes the president to “regulate” and “prohibit” a wide range of economic transactions during a declared national emergency. The government contends that tariffs are a form of economic regulation that falls within this grant of authority. Administration lawyers have also invoked the political question doctrine, arguing that trade policy and national security determinations are inherently executive functions that courts should be reluctant to second-guess.

Business Groups and Importers Press for Relief

On the other side, the plaintiffs — which include small and mid-sized importers, industry trade associations, and several large retailers — argue that the tariffs are causing immediate and irreparable economic harm. Court filings detail cases of businesses forced to lay off workers, cancel orders, or absorb cost increases that threaten their viability. The National Retail Federation and the U.S. Chamber of Commerce have filed amicus briefs supporting the challengers, warning that unchecked executive tariff authority undermines the constitutional balance of power and creates an unpredictable business environment.

The practical impact on consumers has also become a central theme. Economists at the Peterson Institute for International Economics have estimated that the tariffs effectively function as a regressive tax, hitting lower-income households hardest because they spend a larger share of their income on imported consumer goods. Retail prices on clothing, electronics, and household goods have already risen measurably, according to data from the Bureau of Labor Statistics, and further increases are expected if the tariffs remain in place through 2026.

What Happens in the Interim: Markets, Policy, and Political Fallout

The prolonged legal uncertainty creates a peculiar policy environment. The tariffs remain fully operational while the courts deliberate, meaning that businesses cannot plan around a potential reversal. Some companies have accelerated efforts to shift sourcing away from China and other heavily tariffed countries, investing in manufacturing capacity in Vietnam, India, and Mexico. But those transitions take years and billions of dollars, and companies face the risk that a court ruling could render the tariffs moot before the investments pay off.

Politically, the tariff fight has become a defining issue of Trump’s second term. Supporters argue that the tariffs are necessary to rebalance global trade and revive American industry. Critics, including some Republican lawmakers, worry that the economic costs are mounting and that the legal uncertainty is deterring investment. Senate Finance Committee members from both parties have introduced legislation that would require congressional approval for tariffs imposed under IEEPA, though the bills face uncertain prospects in a divided Congress.

The Supreme Court’s Docket and the Road Ahead

Legal analysts say the Supreme Court is likely to take the case given the magnitude of the constitutional questions involved and the direct impact on the national economy. The Court has shown increasing willingness in recent terms to constrain executive power, as evidenced by rulings limiting agency authority under the major questions doctrine. A tariff case would give the justices an opportunity to define the outer boundaries of presidential emergency powers in the economic sphere — a question that has not been squarely addressed since the Steel Seizure Case of 1952.

For now, the business community, trading partners, and financial markets are left to operate under a cloud of legal ambiguity. The tariffs continue to reshape trade patterns, raise consumer prices, and generate diplomatic friction. And the clock is ticking slowly: barring an extraordinary acceleration of the judicial process, the final word from the Supreme Court is unlikely to arrive before the middle of 2026 at the earliest. In the meantime, the most consequential trade policy experiment in modern American history will proceed without a definitive answer to the fundamental question of whether it is lawful.

* This article was originally published here