SCOTUS Showdown Looms Over Trump’s Trade Deals

- Legal challenges question Trump's misuse of emergency powers to impose tariffs. - Supreme Court decision could reshape global trade and U.S. economic policy. On July 26, 2025, Bloomberg reported that Wall Street analysts increasingly anticipate the Supreme Court will overturn former President Donald Trump’s tariffs, citing his misuse of the International Emergency Economic Powers Act (IEEPA). As legal challenges against Trump’s trade policies intensify, courts are examining if the IEEPA grants a president the authority to impose unilateral tariffs. This week, the Federal Circuit will hear oral arguments in the pivotal case, *V.O.S. Selections v. Trump*, where plaintiffs argue the former president improperly leveraged the IEEPA, a law designed to address "unusual and extraordinary threats," to enact tariffs without congressional approval. Lower courts have already signaled their agreement with this view. For instance, in May 2025, the U.S. Court of International Trade struck down specific tariffs, ruling that Trump exceeded his authority because the IEEPA does not explicitly empower presidents to implement tariffs. Subsequently, a federal court in Washington, D.C., issued a similar ruling in *Learning Resources, Inc. v. Trump*, stating that unilateral tariff action exceeded the law's scope. Both cases are now under appeal. The *V.O.S. Selections* lawsuit highlights broader accusations against Trump’s tariff-heavy trade agenda. Plaintiffs contend that the IEEPA does not mention tariffs, duties, or taxes, and they also note that in its nearly 50-year history, no prior president has used the act for such purposes. In response, Trump’s legal team argues the law’s provision for regulating 'importation' grants the authority to impose these measures. Meanwhile, according to a July 26, 2025, report from investment bank Piper Sandler, a Supreme Court ruling against Trump could nullify trade deals announced over the past six months, a decision that would affect international agreements and tariff structures. The Supreme Court could issue a decision by June 2026, potentially disrupting tariffs set to take effect as early as August 1, 2025. These lawsuits aim to dismantle Trump’s entire trade strategy, and pending cases across various circuits highlight the mounting uncertainty surrounding these policies.