By Brett Rowland | The Center Square
(The Center Square) – The U.S. Supreme Court could issue a landmark ruling Friday on President Donald Trump’s authority to use tariffs, potentially reshaping presidential power.
Alan Morrison, a law professor at The George Washington University, said signs indicate a ruling on tariffs is expected on Friday.
“It seems highly unlikely that the court would come back for anything but a very, very important case three days before they’re going to come back anyway,” he told The Center Square.
Morrison said if Trump wins on tariffs, the scope of presidential power would grow significantly for the administration and all future presidents.
“If the court upholds these taxes, then essentially they’re telling the President he can do anything he wants to do, and the court is going to step aside,” Morrison said.
Trump has made tariffs, which are taxes on products imported from outside the U.S., central to both his domestic and foreign agendas during his second term. Last April, Trump imposed import taxes of at least 10% on every U.S. trading partner. Since then, the president has suspended, changed, increased, decreased and re-imposed tariffs under the 1977 International Emergency Economic Powers Act.
That law doesn’t mention the word “tariff” and had never been used to impose them before Trump did so last year. A group of states and small businesses challenged Trump’s tariffs under the 1977 law, winning in two lower courts before the Trump administration appealed to the Supreme Court.
The high court agreed to hear the case on an expedited basis, given the economic stakes at issue. The Trump administration could be forced to refund more than $133.5 billion in tariffs to importers if the Supreme Court sides with the states and small businesses in the case.
Trump has called the case one of the most important of all time and said that an unfavorable ruling could result in economic ruin for the U.S.
Phillip Magness, senior fellow at the Independent Institute, said Trump’s claims of ruin are exaggerated.
“Trump has made a number of wildly exaggerated economic claims,” Magness told The Center Square. “These numbers are nonsensical and appear to have zero basis in reality.”
More realistically, the U.S. would have to refund about $200 billion in tariff revenue it has collected so far, Magness said.
“While this is a loss of revenue to the government, it’s also a tax refund that will go to U.S. companies,” he said.
Those businesses could pass savings along to consumers, Magness added.
Magness said a ruling against the administration could lower consumer prices and end tariff uncertainty.
Companies have already started lining up for potential refunds. Hundreds of companies, including some big ones such as Costco, have filed for refunds with the U.S. Court of International Trade.
The scope of the Supreme Court’s ruling could determine what happens next, Magness said.
“The Supreme Court has wide leeway on how it will rule in this case,” he said. “One possibility is that they limit relief (i.e. a refund) only to the companies that are parties to the lawsuit in the case. That would precipitate additional litigation though at the U.S. Court of International Trade, which has already signalled that it will require the government to refund illegal IEEPA tariffs in other lawsuits going forward.”
Magness said other U.S. laws that allow the president to impose tariffs are “substantially more restrictive” than the authority Trump cites under the IEEPA to issue tariffs of any rate for any length of time.