Overview
A small wine importer and a toy company are forcing the Supreme Court to answer a question that could redefine presidential power: Can the president slap tariffs on the entire world without Congress? Trump used emergency powers law to impose tariffs collecting $130 billion, courts said he overstepped, and now the justices will decide if emergency powers mean what they've always meant—or something radically new.
While that drama unfolds, the Court of International Trade just quietly updated its own procedural rules. The January 5, 2026 amendments to Rule 74 and related forms arrive as the court processes thousands of tariff challenges and braces for what could be the biggest trade authority ruling since the Great Depression remade how America does tariffs. If the Supreme Court strikes down the tariffs, businesses could reclaim over $100 billion and future presidents would need congressional approval for sweeping trade wars.
Key Indicators
People Involved
Organizations Involved
Specialized federal court with exclusive jurisdiction over international trade disputes.
Illinois-based maker of hands-on educational toys for children ages 2 and up.
Libertarian legal advocacy group challenging government overreach.
Timeline
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USCIT Rule Amendments Take Effect
ProceduralAmendments to Court of International Trade procedural rules became effective, modernizing court procedures as Supreme Court prepares tariff authority ruling.
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Trump Warns of 'Terrible Blow' from Adverse Ruling
PoliticalPresident Trump warned that a Supreme Court ruling against the tariffs would be a 'terrible blow' to presidential authority in times of emergency, as Commerce Secretary Bessent indicated decision could come in January 2026.
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Businesses File Protective Refund Lawsuits
LegalCompanies including Costco, Revlon, and Bumble Bee Foods filed lawsuits to preserve rights to potential tariff refunds, anticipating possibility of Supreme Court striking down IEEPA authority and requiring Treasury to reimburse billions in collected duties.
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Supreme Court Oral Arguments
LegalJustices heard 80 minutes of arguments in Learning Resources v. Trump. Court observers reported majority appeared skeptical of government's rationale. Solicitor General Sauer defended presidential emergency powers.
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Administration Develops Contingency Plans
PoliticalTrump administration began developing plans to reimpose tariffs under alternative trade laws if Supreme Court invalidates IEEPA authority, potentially using Section 232 national security provisions or seeking emergency congressional legislation.
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Supreme Court Grants Expedited Review
LegalSupreme Court agreed to hear case on fast-tracked schedule, recognizing economic urgency with billions collected daily. Oral arguments scheduled for November.
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Appeals Court Affirms 7-4
LegalFederal Circuit ruled Trump exceeded IEEPA authority in 7-4 decision. Four judges argued IEEPA authorizes no tariffs whatsoever; four dissented supporting presidential power.
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Federal Circuit Stays Ruling
LegalCourt of Appeals for the Federal Circuit issued administrative stay, keeping tariffs in place during appeal process. Government collects over $200 million daily.
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Court Strikes Down Tariffs Unanimously
LegalThree-judge Court of International Trade panel ruled Trump exceeded statutory authority, permanently enjoining IEEPA tariffs. Written by Trump-appointed Judge Timothy Reif.
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Small Businesses Sue Over Tariffs
LegalLiberty Justice Center filed lawsuit on behalf of VOS Selections wine importer, Learning Resources toy company, and three other small businesses challenging IEEPA tariff authority.
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Liberation Day Reciprocal Tariffs
Executive ActionTrump announced reciprocal tariffs on virtually all U.S. trading partners under IEEPA, dramatically expanding scope of emergency tariff authority.
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Tariffs Take Effect, Retaliation Begins
EconomicCanada imposed 25% counter-tariffs on $30 billion in U.S. goods; China levied 15% on coal and LNG. Full-scale trade war erupts.
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Trump Invokes IEEPA for Tariffs
Executive ActionPresident Trump imposed 25% tariffs on Canada and Mexico, 20% on China using emergency powers, citing fentanyl trafficking and unfair trade practices. First use of IEEPA for comprehensive tariffs.
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USCIT Approves Rule Amendments
ProceduralCourt of International Trade approved amendments to Rule 74 on attorney discipline, Form 10, Form 13, and related instructions, effective January 5, 2026.
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Congress Enacts IEEPA
LegislativePresident Carter signed the International Emergency Economic Powers Act to restrict presidential emergency authority previously granted under the Trading with the Enemy Act.
Scenarios
Supreme Court Strikes Down Tariffs, $100B+ Refunds Flow
Discussed by: Constitutional scholars at Brennan Center, trade lawyers at Foley Hoag and Mayer Brown
The Court rules IEEPA never authorized comprehensive tariffs, only targeted economic sanctions. Treasury must refund over $100 billion to importers who filed administrative protests. Future presidents need congressional approval for broad trade wars, returning tariff authority closer to its pre-1930s legislative home. Trump administration scrambles to reimpose tariffs under Section 232 national security authority or seeks emergency congressional legislation. Short-term chaos in trade policy as refund claims overwhelm Customs and Border Protection.
Court Upholds Tariffs, Presidential Trade Power Expands
Discussed by: Unitary executive advocates, administration lawyers, skeptics of Youngstown framework constraints
Justices rule that IEEPA's broad language authorizing regulation of commerce in emergencies includes tariffs, or decline to second-guess presidential emergency determinations. The ruling dramatically expands executive power over trade policy, effectively allowing any president to declare economic emergencies and impose sweeping tariffs without Congress. Future administrations use IEEPA to bypass legislative gridlock on trade. Congress responds with efforts to amend IEEPA to explicitly exclude tariffs, though partisan divisions prevent passage.
Narrow Ruling Preserves Some Emergency Tariff Authority
Discussed by: Supreme Court analysts at SCOTUSblog, CSIS trade policy experts
The Court issues a limited ruling striking down the worldwide reciprocal tariffs as beyond IEEPA but allowing the more targeted Canada-Mexico-China tariffs tied to specific fentanyl trafficking concerns. Establishes new standards requiring presidents to demonstrate genuine emergencies and proportional responses. Creates framework balancing executive flexibility in true crises against congressional tariff authority. Both sides claim partial victory; uncertainty remains about future tariff actions until courts develop case law under the new framework.
Case Dismissed on Standing or Political Question
Discussed by: Analysts concerned about judicial avoidance, observers of Supreme Court procedural tactics
The Court sidesteps the merits by ruling importers lack proper standing or that tariff policy presents a non-justiciable political question for elected branches. Tariffs remain in place but constitutional question stays unresolved. Lower courts struggle with conflicting guidance in future challenges. Congress remains the only constitutional check on presidential tariff power, but partisan gridlock prevents legislative action. The uncertainty chills international trade and investment as businesses cannot predict policy stability.
Historical Context
Smoot-Hawley Tariff Act of 1930
1930-1934What Happened
Congress passed sweeping tariffs on over 20,000 goods to protect Depression-era industries despite petition signed by 1,028 economists warning of disaster. Trading partners retaliated with their own tariffs. Global trade collapsed, deepening and extending the Great Depression worldwide.
Outcome
Short term: U.S. imports fell 40%, exports collapsed, unemployment worsened, 1930s global economy spiraled downward.
Long term: Catastrophic results convinced Congress to delegate tariff authority to presidents via 1934 Reciprocal Trade Agreements Act, fundamentally restructuring U.S. trade policymaking for 90 years.
Why It's Relevant
The delegation of tariff power from Congress to presidents stems directly from Smoot-Hawley's failure. Current case questions whether that delegation has gone too far in the opposite direction.
Youngstown Sheet & Tube Co. v. Sawyer (1952)
1952What Happened
President Truman seized steel mills during Korean War to prevent a strike he claimed threatened national defense. Supreme Court ruled 6-3 that the president lacked constitutional authority to seize private property without congressional authorization, even during wartime emergency.
Outcome
Short term: Steel mills returned to private ownership; strike proceeded; settlement reached without the catastrophic disruptions Truman predicted.
Long term: Justice Jackson's concurring opinion established tripartite framework for presidential power that courts still use today: power is maximum with congressional support, minimum when defying Congress.
Why It's Relevant
Tariff case turns on similar question—whether emergency powers statute gave president authority he claims. Jackson framework likely shapes judicial analysis of IEEPA's scope.
Nixon's 1971 Import Surcharge
1971What Happened
President Nixon imposed 10% surcharge on all imports during monetary crisis, initially believed to use Trading with the Enemy Act. Surcharge lasted four months until international monetary agreement reached. Recent analysis suggests Nixon may not have actually invoked TWEA despite courts later assuming he had.
Outcome
Short term: Trading partners negotiated Smithsonian Agreement ending Bretton Woods gold standard; surcharge lifted after 120 days.
Long term: Created ambiguous precedent for emergency tariff authority that Trump administration now cites, though legal basis remains murky after 50+ years.
Why It's Relevant
Only potential historical precedent for using emergency powers for comprehensive tariffs, yet even that precedent's legal foundation is questionable. Highlights unprecedented nature of current IEEPA tariffs.