“The Supreme Court has agreed to hear President Trump's appeal of a lower-court ruling against his tariffs. Its decision could matter well beyond just the levies that Trump imposed in April.
If the court sides with Trump, it could hand the president sweeping fiscal authority long the purview of Congress. It could enable the president, by simply invoking an emergency with some foreign element, to justify almost any revenue measure in response: not just tariffs, but other taxes, too.
Trump officials claim in court, and in public, that the tariffs in question are targeted and temporary. "Far from being permanent, these tariffs end when the emergency ends," Trump's trade adviser, Peter Navarro, recently wrote.
But that's not what Trump himself, or the rest of the administration, envisions. Trump has said tariffs could replace income taxes, becoming Treasury's primary source of revenue, as they were before 1913.
Last week, his budget office projected that tariffs would raise $3.9 trillion, or 1% of GDP, over the coming decade. That sure sounds permanent.
Tariffs are taxes, and as a share of GDP, Trump's tariffs in fiscal 2026 would represent one of the largest tax increases since the 1950s and the largest since 1982, according to the Tax Foundation, a think tank that opposes Trump's tariffs. And unlike the other tax increases, the recent tariffs were enacted entirely at the president's discretion with no vote in Congress.
The Constitution grants Congress authority over both taxes and tariffs. This was central to the framers' systems of checks and balances. James Madison argued that the president couldn't become king because the "purse is in the hands of the representatives of the people."
Starting in the 1930s, Congress began delegating some tariff authority to the president, to negotiate trade agreements that Congress would then ratify or to address specific problems, such as other countries' unfair practices. Revenue wasn't the goal. Trump in his first term, and Joe Biden afterward, generally applied tariffs using those statutes.
In his second term, Trump had a grander vision: turn the U.S. back into a high-tariff country. To do so, he relied on the International Emergency Economic Powers Act of 1977, first to impose steep tariffs on Canada, Mexico and China, and then on almost every major trading partner.
That law was generally used to punish national-security threats such as Iran and Venezuela through sanctions. Three courts have already ruled that it doesn't permit Trump to impose across-the-board, unlimited tariffs. Sectoral tariffs, such as on steel, were imposed under a different law, and aren't at issue in the current case.
The Supreme Court might not rule clearly for one side or another. But for Trump to win, the court would have to agree with him on several key points.
First, the law requires an "unusual and extraordinary threat . . . to the national security, foreign policy, or economy of the United States" originating outside its borders. The court would have to defer to Trump's claim that the trade deficit meets that definition, though the U.S. has run a persistent deficit for 50 years, and few economists consider it a threat. (Trump cited a different emergency -- fentanyl and illegal migration -- for tariffs on China, Mexico and Canada.)
Second, the court would have to conclude that the tariffs don't conflict with the "major questions doctrine," which requires clear statutory authorization for something of exceptional political or economic significance. That's even though the tariffs, in economic impact, dwarf Biden's plan to forgive student debt. The court ruled that Biden's plan did violate the doctrine.
Third, the law says the president can "regulate . . . importation . . . or transactions involving any property in which any foreign country or a national thereof has any interest," without specifically authorizing tariffs. The court would thus have to agree with Trump that "regulate" includes tariffs.
If "regulate" can include tariffs, it could, according to several legal scholars, include any tax. "Any tax with foreign-policy implications would be within his authority," said John Brooks, professor of tax law at Fordham University. "Why wouldn't that apply to any tax he can conceive of, not just the tariffs?"
He added that as recently as last year, the Supreme Court affirmed that the Constitution treats tariffs and income taxes similarly, that is, as "indirect taxes." It would be hard for a court to argue "there is something legally or politically different about tariffs from capital taxes, or financial-transaction taxes," Brooks said.
"There's a whole bunch of statutes where Congress gives executive agencies and the president the power to regulate," noted Jeffrey Schwab, senior counsel at the Liberty Justice Center, which represents a group of plaintiffs suing Trump. "If 'regulate' can mean tax or tariff, does that mean all of a sudden it doesn't even take a vote of Congress to implement a tax? That seems really bad."
Imagine, for example, that a president declares the offshoring of jobs a national emergency and imposes a surtax on profits of companies he accused of offshoring. That president could claim that the same deference accorded to Trump on tariffs would apply here.
Trump has repeatedly cited foreign policy or national security in expanding presidential prerogative -- including on taxes. He has claimed that Internal Revenue Service employees don't have the right to collective bargaining, citing national security. "America's military, economic, and productive capacity directly depend on revenue the IRS collects," the administration argued in court filings.
Trump has often claimed that foreign exporters, not Americans, pay tariffs. In fact, importers (such as retailers) remit the duty to the government. They can, in theory, persuade exporters to absorb some or all of the tariff, or pass it along to their customers. While who ultimately pays can't be known precisely, several economists estimate that American businesses paid 50% to 60% of Trump's tariffs to date, with the balance split roughly between exporters and consumers.
So if the Supreme Court gives Trump what he wants, tariffs could end up as one of the biggest business-tax increases in decades, wiping out the tax benefits for expensing capital investment in this year's Republican tax and spending law.
There would also be no end to uncertainty. "Unlike most other tariff authorities, these tariffs are not enshrined in statute, there's no process to change them, and they can change very rapidly, in a day, without much notice, as we've seen," said Greta Peisch, a trade attorney at Wiley Rein and former general counsel for the U.S. trade representative.
And then there are all the other taxes, besides tariffs, Trump could feel free to use.” [1]
1. U.S. News -- Capital Account: Tariff Case Puts Into Play Major New Powers for Trump. Ip, Greg. Wall Street Journal, Eastern edition; New York, N.Y.. 11 Sep 2025: A5.
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