Trump's Tariffs Under Supreme Court Scrutiny: Major Questions Doctrine

Amid heightened scrutiny, President Trump's recent global tariffs face a future shaped by intense legal challenges, potentially reaching the Supreme Court to determine their fate. This judicial examination could define the trajectory of the administration's trade policies. The pivotal issue centers on whether these global tariffs bear "vast economic and political significance." A supportive legal decision might solidify the president’s so-called “Liberation Day” tariffs, while an unfavorable one could weaken the administration's position as challengers strive to dismantle them. The Supreme Court's use of the major questions doctrine is central to this discussion. This doctrine limits federal actions on major economic and political issues without explicit Congressional endorsement. It found reinforcement through judges appointed during Trump's term and has previously been invoked against President Biden's policies. Recently, a New York-based US Court of International Trade struck down several tariffs without relying on the major questions doctrine, yet the US Court of Appeals for the Federal Circuit in Washington, D.C., opted to keep them in place temporarily amid ongoing legal discussions. Small businesses that initially contested the tariffs have urged the court to lift this temporary stay. They argue the broad interpretation of the International Emergency Economic Powers Act of 1977 (IEEPA)—the statute Trump used to justify his tariffs—would be unconstitutional if it allowed unrestricted tariff authority. This legal case presses courts to decide if a president can unilaterally levy import duties during what he classifies as a national emergency. The administration maintains that the major questions doctrine is not relevant to national security matters, where presidential power takes precedence, and that the doctrine generally applies to federal agencies rather than the president directly. Trump invoked the IEEPA multiple times, including imposing tariffs on February 1 on imports from China, Mexico, and Canada, citing threats related to illegal immigration and drug issues. On April 2, referred to as “Liberation Day,” he implemented additional tariffs on several other countries, once more using the IEEPA in legal defense. Professor Aaron Tang from the University of California Davis highlighted the relevance of the tariffs in relation to the major questions doctrine. He remarked, "IEEPA has never [been] used before to impose tariffs. So if the doctrine means anything, and if it applies neutrally, no matter who the president is, it will apply here." The Supreme Court previously applied the major questions doctrine in 2022 to limit Biden's EPA from enforcing certain greenhouse gas regulations without Congressional approval. In the following year, the court also restricted the Department of Education from executing significant student loan forgiveness under the HEROES Act, emphasizing the doctrine's wide-reaching effects on presidential authority. Due to the considerable economic effects of the tariffs, Tang anticipates close judicial scrutiny regarding their authorization. He mentioned, "The tariffs are way more economically significant than any of the Biden administration policies." The ongoing legal disputes present a major challenge to Trump's tariff approach, showcasing the ongoing tension between executive power and legislative oversight. Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed. Click here for political news related to business and money policies that will shape tomorrow's stock prices Read the latest financial and business news from Yahoo Finance