Supreme Court Showdown: Can Trump Legally Slap Tariffs on Trade?

Corporate giants drag the White House to court—again—over presidential power plays.

Who controls trade? The legal battle over Trump''s tariff authority hits boiling point.

Two Fortune 500 firms just forced SCOTUS to decide: does the Oval Office hold absolute trade power—or are there still checks on executive overreach? Cue the constitutional fireworks.

Bonus jab: Meanwhile, Wall Street hedges its bets—because nothing screams ''stable investment climate'' like a trade war at the mercy of Twitter fingers.

The toy companies argue their case based on JPMorgan’s analysis

The toy companies had already won a victory before US District Judge Rudolph Contreras in Washington, but the decision was narrow in scope. However, TRUMP filed an appeal, and now the businesses want to skip that fight and go straight to the United States Supreme Court.

Their argument in their petition to the court is based on an analysis by JPMorgan that shows that the round of Trump tariffs at issue WOULD hike taxes on Americans by $660 billion a year. This is the largest tax increase in recent memory by a long shot and caused prices to surge by adding 2% to the Consumer Price Index.

Due to the high tariffs, the nation’s overall average effective tariff rate has gone from 2.5% to around 27% since the start of the year. This is more than a tenfold rise and the highest for the US in over a century.

Before its summer break starts at the end of this month, the companies want the Supreme Court to decide if it will take this case. This would allow for possible arguments in the fall.

Another case of tariff in the waiting

All of the challengers to Trump’s tariffs are arguing that the administration’s claims for the tariffs, including a national emergency caused by illegal immigration and flows of illegal drugs from overseas, were unauthorized because they did not directly address the stated emergency.

A three-judge panel at the US Court of International Trade (CIT) sided with a group of small companies in May when they said Trump didn’t have the power to carry out his “Liberation Day” duties under the International Economic Emergency Powers Act (IEEPA). 

The Trump administration appealed that decision to the US Court of Appeals for the Federal Circuit in Washington, D.C. The court allowed Trump to keep the tariffs in place while it figures out if the president has the legal power to do so. The oral arguments are set to begin on July 31.

Trump’s administration is ready to defend itself

Legal experts have known for a long time that the Supreme Court would finally rule on whether Trump’s reasons for raising tariffs are legal.

This could mean the “major questions doctrine” will be a problem for the Trump administration. This doctrine says that federal agencies can’t act on “vast economic and political significance” issues unless Congress explicitly permits them to do so.

However, Trump’s lawyers are set to use Nixon as an example to show that his global tariffs will finally be upheld in court.

As part of a set of economic measures called the “Nixon shock” about fifty years ago, the 37th president placed 10% duties on goods without consulting anyone else. These duties were challenged in court in a way that is similar to how Trump’s 2025 tariffs have been challenged.

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