Lawyer for Trump faces tough Supreme Court questions over legality of tariffs

By Andrew Chung and John Kruzel

WASHINGTON (Reuters) -The lawyer representing Donald Trump's administration faced tough questions from conservative and liberal U.S. Supreme Court justices on Wednesday over the legality of the Republican president's sweeping tariffs in a case with implications for the global economy that marks a major test of Trump's powers.

The arguments come in appeals pursued by the Trump administration after lower courts ruled that his unprecedented use of a 1977 federal law meant for national emergencies to impose the tariffs exceeded his authority. The challenge involves three lawsuits brought by businesses affected by the tariffs and 12 U.S. states, most of them Democratic-led.

Trump has heaped pressure on the Supreme Court, which has a 6-3 conservative majority, to preserve tariffs that he has leveraged as a key economic and foreign policy tool. The tariffs - taxes on imported goods - could add up to trillions of dollars for the United States over the next decade.

U.S. Solicitor General D. John Sauer, appearing for the administration, kicked off the arguments by defending the legal rationale employed by the president to impose the tariffs at issue.

Sauer immediately faced numerous questions raising skepticism over the administration's arguments about the language and purpose of the statute at issue in the case.

Some of the justices indicated that Trump's application of the statute to impose tariffs of unlimited duration was a major action that could require clear congressional authorization.

Sauer told the court that Trump determined that U.S. trade deficits have brought the nation to the brink of an economic and national security catastrophe. Sauer said imposition of the tariffs has helped Trump negotiate trade deals, and unwinding those agreements "would expose us to ruthless trade retaliation by far more aggressive countries and drive America from strength to failure with ruinous economic and national security consequences."

Trump invoked the 1977 International Emergency Economic Powers Act, or IEEPA, to impose the tariffs on nearly every U.S. trading partner. The law allows a president to regulate commerce in a national emergency.

The U.S. Constitution grants Congress, not the president, the authority to issue taxes and tariffs. The administration has argued that IEEPA allows tariffs by authorizing the president to "regulate" imports to address emergencies.

Conservative Chief Justice John Roberts asked Sauer whether Trump has intruded onto the authority delegated to Congress in the Constitution.

The imposition of taxes on Americans "has always been the core power of Congress," Roberts said, adding that these tariffs seem to be raising revenue, which the Constitution contemplates as a role for Congress.

Conservative Justice Amy Coney Barrett questioned Sauer about his argument that IEEPA's language granting presidents emergency power to "regulate importation" encompasses tariffs.

"Can you point to any other place in the code or any other time in history where that phrase together 'regulate importation' has been used to confer tariff imposing authority?" Barrett asked.

Liberal Justice Elena Kagan pressed Sauer about his claim that Trump's tariffs are supported by the president's inherent powers under the U.S. Constitution. Kagan said the power to impose taxes and regulate foreign commerce are usually thought of as "quintessential" powers belonging to Congress, not the president.

MAJOR QUESTIONS DOCTRINE

Sauer also said the president's actions in imposing the tariffs did not violate the Supreme Court's "major questions" doctrine, which requires executive branch actions of vast economic and political significance to be clearly authorized by Congress. The Supreme Court applied this doctrine to strike down key policies of Trump's Democratic predecessor Joe Biden.

A lower court in ruling against Trump found that the tariffs were impermissible under this doctrine.

Some of the justices, in questioning Sauer on whether Trump's tariffs would survive scrutiny under the "major questions doctrine," noted that Congress did not include the word tariffs in IEEPA.

"The exercise of the power is to impose tariffs, right?" Roberts asked Sauer. "And the statute doesn't use the word 'tariffs.'"

Trump is the first president to use IEEPA to impose tariffs, one of the many ways he has aggressively pushed the boundaries of executive authority since he returned to office in areas as varied as his crackdown on immigration, the firing of federal agency officials and domestic military deployments.

Liberal Justice Ketanji Brown Jackson signaled her skepticism of the Trump administration's central arguments. Jackson said IEEPA was intended to limit presidential authority, not expand it.

"It's pretty clear that Congress was trying to constrain the emergency powers of the president," Jackson said.

Conservative Justice Brett Kavanaugh asked Sauer about a 10% tariff imposed on some imports in the early 1970s by then-President Richard Nixon under a predecessor statute to IEEPA.

Kavanaugh asked, "What's the significance of the Nixon example and precedent here? Because I think figuring that out is really important to deciding this case correctly."

Sauer said the "very powerful takeaway" is that there is a historical basis for Trump's interpretation of his statutory authority.

The IEEPA-based tariffs have generated $89 billion in estimated collections between February 4 and September 23, when the most recent data was released by the U.S. Customs and Border Protection agency.

If the justices strike the tariffs down, "we would be defenseless, leading perhaps even to the ruination of our Nation," Trump wrote in a social media post on Sunday.

If the Supreme Court rules against Trump, these tariffs are expected to remain as the administration switches to other legal authorities, U.S. Treasury Secretary Scott Bessent told Reuters.

Trump has imposed some additional tariffs invoking other laws. Those are not at issue in this case.

The Supreme Court has backed Trump in a series of decisions issued this year on an emergency basis. These have let Trump policies that were impeded by lower courts amid questions about their legality proceed on an interim basis, prompting critics to warn that the justices are refusing to act as a check on the president's power.

GLOBAL TRADE WAR

Trump instigated a global trade war when he returned to the presidency in January, alienating trading partners, increasing volatility in financial markets and fueling global economic uncertainty.

He invoked IEEPA in slapping tariffs on goods imported from individual countries to address what he called a national emergency related to U.S. trade deficits, as well as in February as economic leverage on China, Canada and Mexico to curb the trafficking of the often-abused painkiller fentanyl and illicit drugs into the United States.

Trump has wielded tariffs to extract concessions and renegotiate trade deals, and as a cudgel to punish countries that draw his ire on non-trade political matters. These have ranged from Brazil's prosecution of former president Jair Bolsonaro, India's purchases of Russian oil that help fund Russia's war in Ukraine, and an anti-tariff ad by Canada's Ontario province.

'AN UNUSUAL AND EXTRAORDINARY THREAT'

IEEPA gives the president power to deal with "an unusual and extraordinary threat" amid a national emergency. It historically had been used for imposing sanctions on enemies or freezing their assets, not to impose tariffs. In passing IEEPA, Congress placed additional limits on the president's authority compared to a predecessor law.

The Supreme Court is reviewing two rulings against Trump. The Washington-based U.S. Court of Appeals for the Federal Circuit sided with challengers including five small businesses that import goods and the states of Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon and Vermont. A Washington-based federal judge sided with a family-owned toy company called Learning Resources.

While the Supreme Court typically takes months to issue rulings after hearing arguments, the Trump administration has asked it to act swiftly in this case.

(Reporting by Andrew Chung in Washington; Additional reporting by David Lawder; Editing by Will Dunham)