The fate of more than just Trump’s tariffs will be decided in 2026

US Supreme Court judges are being asked to consider whether the President had the authority to impose broad tariffs on countries citing ‘national security,’ or whether that right falls to Congress.

AFP

The US Constitution vests Congress with the exclusive power "to lay and collect taxes, duties, imposts, and excises".

The fate of more than just Trump’s tariffs will be decided in 2026

Toufic Chanbour

last update on 16 Dec 2025

The fate of US President Donald Trump’s trade tariffs and the international disputes they ignite is now in the hands of the United States Supreme Court, ahead of what will be a landmark ruling in 2026. This is the most consequential challenge yet to the expansion of presidential power under the guise of national security, set against Congress’s assertion of its constitutional authority over the public purse.

Following a turbulent year of Trump-led trade confrontations that have overturned decades of established practice, 2025 concludes with suspended agreements, repeated revisions, and a tense wait for data to measure the economic and political fallout. As the conflict moves from the chambers of international diplomacy and the forums of economic summits to the very core of the American constitutional system, the final word in this confrontation is yet to be written.

In his second term, Trump has tested the limits of executive branch power. In 2026, the Supreme Court—which has a conservative majority—will rule on Trump’s national security argument. It could redefine the balance of power between the US president and the US Congress, while setting the course for tariffs for generations to come. In short, 2026 will be a year of reckoning in the ongoing domestic struggle between the executive and the legislature over trade and fiscal policy.

Trump’s powers

On 5 November, the Supreme Court heard oral arguments contesting a ruling by the Federal Circuit Court of Appeals in Washington, issued on 29 August, which ruled that most of Trump’s tariffs were unlawful. These tariffs—imposed on 2 April 2025, a date his team called Liberation Day—targeted America’s trading partners and other nations, justified by their purported role in the flow of narcotics into the US.

Elizabeth Frantz/Reuters — The Supreme Court will be asked to rule on a legal interpretation that could give the White House (pictured) broader fiscal leeway than had previously been the case.

Representing the President was Solicitor-General John Sauer. Private sector interests were represented by attorney Neal Katyal, while state governments were represented by Solicitor-General Benjamin Gutman. Sauer’s defence of Trump centred on the claim that narcotics trafficking from China, Mexico, and Canada posed a national emergency, justifying punitive tariffs against those countries.

He also said the trade imbalance favouring exporters to the US had eroded domestic industry and evolved into “an unusual and extraordinary threat”. On this basis, he said the President was entitled to invoke the powers granted under the International Emergency Economic Powers Act of 1977 (IEEPA), Section 1701 of which authorises Trump to act “to deal with any unusual and extraordinary threat, originating in whole or substantial part outside the United States, which threatens the national security, foreign policy, or economy of the United States”.

Brendan Smialowski/AFP — US President Donald Trump delivers remarks on reciprocal tariffs as US Secretary of Commerce Howard Lutnick holds a chart during an event in the Rose Garden entitled "Make America Wealthy Again" at the White House in Washington, DC,

During times of emergency, Section 1702 grants the President the authority to “regulate imports or exports” with any foreign nation whose nationals are involved in such trade. Sauer argued that Congress’s delegation of authority to the President to “regulate imports” inherently included the power to impose tariffs, describing them as “a traditional and common instrument of regulating trade”.

Reach and overreach

Several of the United States’ founding constitutional authorities, including James Madison and Chief Justice John Marshall, considered tariffs to be a means of regulating commerce. In the seminal 1824 case Gibbons v Ogden, Marshall affirmed “the right of authority to regulate commerce through the imposition of tariffs”. Fast forward 140 years, and in August 1971, President Richard Nixon imposed a temporary 10% tariff, invoking a statute nearly identical to the IEEPA.

The Supreme Court decision on Trump's national security argument could redefine the balance of power between the President and Congress

That law was the Trading with the Enemy Act, which he employed to shield American goods from the effects of unfair exchange rates. In a nationally televised address, Nixon declared: "When the unfair practice ends, the import tax will end as well." The Court of Appeals later upheld this action in a case brought against Yoshida International.

Summarising, Sauer argued that the Supreme Court should not overreach in such matters, as the judiciary lacked the institutional capacity to determine whether foreign threats were "unusual or extraordinary," or whether they warranted an emergency response. He concluded that any decision overturning the tariffs would constitute "an impermissible judicial intrusion into the President's responsibility for managing foreign relations and trade".

Constitutional limits

In rebuttal, Katyal and Gutman cited Article I of the US Constitution, which vests Congress with the exclusive power "to lay and collect taxes, duties, imposts, and excises," and stipulates that "all bills for raising revenue shall originate in the House of Representatives". They said IEEPA contains no explicit mention of tariffs, unlike other statutes such as the Trade Act of 1974 which specifically address them.

Angela Weiss/AFP — Stock markets reacted to an uptick in US inflation, suggesting that President Donald Trump's tariffs were impacting the American economy.

While IEEPA grants the President broad discretion to confront "unusual and extraordinary threats" that are declared national emergencies—including the authority to investigate, regulate, and prohibit imports—it never uses the terms 'tariff' or 'tax'. Until Trump, no President had ever invoked IEEPA to impose tariffs for reasons of foreign policy or national security. Historically, its use has been confined to financial sanctions such as asset freezes or trade bans.

The government could cite no precedent in which the word 'regulate' or the phrase 'regulate imports' had been interpreted to permit the President to impose taxes. Critics warn that expanding the term 'regulation' to include tariffs would destabilise the long-standing interpretation of numerous laws and could, theoretically, allow a President to impose taxes on anything—from cars to zoos.

Awaiting judgement

Legal observers argue that interpreting IEEPA so broadly would erode essential constitutional checks and balances. Foremost among these is the 'major questions' doctrine, which requires Congress to speak clearly when granting the executive branch powers with vast economic implications. It would also conflict with the principle of 'non-delegation,' which bars Congress from transferring its core legislative functions—such as taxation—to the President.

Aaron Schwartz/Reuters — US President Donald Trump imposed tariffs for reasons of national security, citing drugs and trade surpluses. Now judges will decide if he had the authority to do so.

Taxation remains one of Congress's most fundamental constitutional prerogatives, and its control of public finances is a key mechanism for limiting executive power. As such, the Supreme Court must proceed cautiously when interpreting a statute like IEEPA—one clearly intended for wartime and similar crises—especially when Congress has already demonstrated that it knows how to confer tariff powers explicitly, as it did in the Trade Act of 1974.

At the heart of the case lies a constitutional dilemma: are the President's extraordinary tariff powers an extension of executive foreign policy, or do they fall squarely under Congress's fiscal authority? If the Court concludes that they pertain primarily to foreign policy, it may uphold Trump's interpretation. If it deems them inseparable from Congress's constitutional control over taxation and spending, it will likely strike it down.

Trump has said the Court's ruling will be "among the most consequential in American history." A legal loss, he warns, would plunge the nation into "weakness, turmoil, and financial chaos for many years," relegating the United States "to the rank of the Third World". On the contrary, a legal victory, he said, would transform the US into "the richest and most secure nation on earth." No pressure, then.

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