What might happen if the Supreme Court finds Trump’s tariffs illegal?

President Donald Trump has framed tariffs as the multipurpose tool of his second-term agenda. They helped him raise revenue, shape trade negotiations, and bend other nations to his political will.

But as Trump discovered on Wednesday, the main tool in his punishing and ever-expanding trade war may soon reach its limit.

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The fate of the president’s sweeping taxes on imports from virtually every country now rests in the hands of the Supreme Court’s nine justices, most of whom have sounded skeptical of Trump’s new, sweeping assertion of his trade powers.

It is impossible to predict how a divided bench might ultimately decide the landmark case — a case that could redefine the scope of presidential authority over trade and limit Trump’s ability to impose tariffs at will.

But the Court’s interrogation — over nearly three hours of oral arguments — highlighted the big political stakes for the president and his economic vision.

Since winning the election a year ago, Trump has targeted friends and competitors — including Canada, Mexico, the European Union and China — with an escalating set of tariffs. These import taxes fell primarily on American consumers and businesses.

Trump imposed those tariffs without congressional approval, invoking a decades-old emergency law to levy a 10% tax on nearly all trading partners, as well as higher duties on dozens of countries.

Both tariffs and the tactics to implement them are equally important to Trump, who appreciates the ability to adjust taxes with the simple wave of a pen.

He exercised this emergency authority in an attempt to reduce the national debt, support domestic industry and pressure other countries to enter into favorable agreements, while trying to achieve a number of other goals, many of them unrelated to trade.

Speaking at an event in Florida shortly after the justices concluded their hearings, Trump boasted again about the tax benefits of his tariffs, boasting that they are bringing in “hundreds of billions” in revenue. So far, the United States has collected more than $200 billion in tariffs this year, more than double the amount in 2024, according to federal records.

The president said he would use that money for a range of priorities, including offsetting the roughly $4 trillion package of tax cuts he signed into law this year. But a defeat at the Supreme Court could force the government to return some or all of the money — a prospect that Trump and his top aides have described as an economic calamity.

Still, Trump and his aides sought to minimize the possibility of defeat, even as the fate of his second-term agenda hung in the balance.

“It went very well,” Treasury Secretary Scott Bessent told reporters Wednesday at the White House. Asked if the government had an alternative plan, he replied that he would not discuss the matter.

“It gives him the ultimate negotiating authority,” Bessent said of the president’s tariff powers.

Trump’s strategy relies on the International Emergency Economic Powers Act, a rule Congress passed in 1977 largely to restrict presidential power over trade. No president before Trump had used this law to impose tariffs — a word that does not even appear in the text of the statute.

With this law, Trump was able to impose high tariffs on all US trading partners without a lengthy investigation or a prolonged battle in Congress. He called these tariffs “reciprocal” and said they were a response to a national emergency: persistent trade deficits between the United States and other countries.

Yet Trump has also applied these tariffs to countries with which the United States has a trade surplus, including Australia. He has imposed other tariffs for punitive reasons or to achieve goals beyond the scope of trade.

Trump announced a 50% tax on imports from Brazil this year, in part because of that country’s treatment of a political ally, Jair Bolsonaro, who was facing accusations of inciting a coup.

Trump also pitched his high tariffs on Mexico and Canada in part as a response to the flow of illicit drugs across the border.

Two groups of states and small businesses challenged the legality and expansive scope of Trump’s tariffs earlier this spring in a pair of court filings that reached the Supreme Court together on Wednesday.

Even the Court’s conservative justices questioned whether Congress really intended to give the president such broad tariff powers — powers that the Constitution vests in legislators.

“I think all the justices understand that how they resolve this case will not only have huge implications on the economic policy side, but will also be a harbinger of the Court’s relationship with the government more broadly,” said Stephen I. Vladeck, a professor at Georgetown University Law Center.

In a speech on Wednesday about his economic agenda, Trump spoke candidly about the ways in which the unfettered power to impose tariffs had aided his strategy. He said this allowed him to sign trade agreements — including with countries like Japan — and negotiate resolutions in some international conflicts.

“Without tariffs, this would never have happened,” he said.

Even if the Supreme Court invalidates Trump’s ability to use emergency authority to impose tariffs, he could still impose taxes on imports. The president has already used a national security law to impose tariffs on specific items and sectors — from lumber and steel to end products like heavy trucks and bathroom sinks.

But these powers may be limited and may require lengthy investigations before any tariffs can be set. None of these rules are as flexible as the emergency powers law.

Nick Iacovella, executive vice president of the Coalition for a Prosperous America, a group that supports Trump’s tariffs, described the emergency powers law as “absolutely essential to the Trump administration’s agenda.”

But he added: “Even if they lost the Supreme Court case, they could still maintain pretty much the same policy basis that we have now.”

The Trump administration remains confident in its prospects. Bessent, who appeared on Fox Business Network hours after the hearing, said he is “very optimistic” that the Court will rule in the president’s favor. He added that the authors of the action are “embarrassed” for not understanding economics and trade policy.

If Trump wins at the Supreme Court, however, it could “embolden the government even more,” said Ted Murphy, co-leader of the trade practice at the law firm Sidley Austin.

That would solidify the president’s ability to use a law with “very few, if any, limits” to impose tariffs in response to any situation Trump deems a national emergency.

This possibility has made Democrats uneasy. They are leading an effort on Capitol Hill to try to reverse some of the president’s tariffs. In the Senate, they won the support of some Republicans last week to block taxes on Brazil, although the measure faces major obstacles in the Chamber of Representatives.

“We’re starting to see a reluctance in Congress to engage in these across-the-board tariffs,” said Senator Amy Klobuchar, Democrat of Minnesota, who attended the oral arguments.

Ryan Majerus, a former Biden administration official and now a partner at King & Spalding, said a victory for the president could allow Trump to tax a broader range of imports and other forms of trade — including perhaps the flow of investment into the United States.

“There are a lot of cascading effects that could occur depending on what the Court decides — in both directions,” he said.

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