The $2 Trillion Mistake: How Trump's Own Supreme Court Picks Could Destroy His Tariff Empire

Federal Courts Rule Against Trump's Tariff Authority: A Constitutional Challenge to Presidential Trade Powers

A landmark legal battle has emerged challenging the constitutional limits of presidential tariff authority, with federal courts delivering decisive rulings against President Donald Trump's sweeping use of emergency powers to impose tariffs. The U.S. Court of International Trade unanimously ruled on May 28, 2025 that Trump exceeded his constitutional authority by using the International Emergency Economic Powers Act (IEEPA) to impose broad tariffs on imports from dozens of countries.

The Constitutional Foundation: Congress Controls Tariffs

The legal challenge rests on a fundamental constitutional principle: Article I, Section 8 of the Constitution explicitly grants Congress the power "to lay and collect taxes, duties, imposts, and excises". This provision makes clear that tariff authority belongs exclusively to the legislative branch, not the executive.

The court emphasized this constitutional bedrock in its ruling, stating that "the Constitution assigns Congress the exclusive powers to lay and collect Taxes, Duties, Imposts and Excises" and to "regulate Commerce with foreign Nations". As the judges noted, "any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional" because it would "constitute an improper abdication of legislative power to another branch of government".

The V.O.S. Selections Case: A Watershed Ruling

The consolidated case V.O.S. Selections, Inc. v. United States represents the most significant legal challenge to presidential tariff authority in decades. Filed by five small businesses and twelve Democratic-led states, the lawsuit challenged Trump's use of IEEPA to impose:

• A 10% baseline tariff on imports from most trading partners

• 25% tariffs on Canada and Mexico, plus 20% on China under the pretext of combating fentanyl trafficking

• "Reciprocal" tariffs reaching as high as 145% on Chinese goods

The three-judge panel at the Court of International Trade issued a permanent injunction blocking these tariffs, finding that Trump had no legal authority under IEEPA to impose such sweeping trade measures.

Two Critical Legal Doctrines Challenge Trump's Authority

The Major Questions Doctrine

The court's ruling heavily relied on the Major Questions Doctrine, which requires Congress to "speak clearly" when authorizing the executive to make "decisions of vast economic and political significance". The Supreme Court has increasingly applied this doctrine to limit executive overreach.

IEEPA "doesn't even say tariffs, doesn't even mention them," Federal Circuit Judge Jimmie Reyna observed during oral arguments. The court found that Trump's IEEPA tariffs would impose "$1.4 to 2.2 trillion in new taxes over the next decade," far exceeding the magnitude of any previous "major questions" case.

The Nondelegation Doctrine

The court also invoked the Nondelegation Doctrine, which prevents Congress from giving away unlimited legislative authority to the executive branch. As James Madison warned in Federalist 47, "The accumulation of all powers, legislative, executive, and judiciary, in the same hands ... may justly be pronounced the very definition of tyranny".

The court ruled that granting unlimited tariff authority to the president would violate this fundamental principle, as it would allow one person to unilaterally impose trillions in taxes without congressional oversight.

IEEPA: Emergency Powers Without Tariff Authority

The International Emergency Economic Powers Act of 1977 was designed to give presidents limited powers during genuine national emergencies. However, no previous president has ever used IEEPA to impose tariffs. The law was specifically enacted to constrain presidential power after concerns about abuse of the broader Trading with the Enemy Act.

The court found Trump's claimed emergencies insufficient to justify such sweeping tariffs:

• Trade deficits: The court noted that trade deficits have persisted for decades and are not "unusual and extraordinary" threats

• Fentanyl trafficking: The court ruled that broad tariffs have no rational connection to stopping drug smuggling

Alternative Legal Authorities and Their Limits

Congress has provided presidents with specific, limited tariff authority through other statutes, but these come with strict constraints:

Section 122 of the Trade Act of 1974

This provision allows presidents to address balance-of-payments problems but limits tariffs to 15% for a maximum of 150 days. The court noted that Trump's trade deficit concerns should have been addressed under Section 122, not IEEPA. Notably, Section 122 has never been used by any president.

Section 232 National Security Authority

The Trade Expansion Act of 1962 allows tariffs for genuine national security reasons, but only after investigations and only for specific industries. Trump has used Section 232 to impose tariffs on steel, aluminum, and automobiles, and these tariffs were not challenged in the current litigation.

Federal Circuit Appeals and Supreme Court Implications

The Trump administration immediately appealed the Court of International Trade ruling to the U.S. Court of Appeals for the Federal Circuit, which issued a temporary stay allowing tariffs to continue while the appeal proceeds.

In a rare move, all eleven Federal Circuit judges heard oral arguments en banc on July 31, 2025, indicating the case's exceptional importance. During the hearing, judges expressed broad skepticism about Trump's claimed authority, with one judge calling the administration's position "breathtaking".

The case is widely expected to reach the Supreme Court, where Trump could face the very conservative legal doctrines his own appointees have championed. The Supreme Court's conservative majority has consistently applied the Major Questions Doctrine to limit executive power, including striking down Biden administration policies on student loans and environmental regulations.

Economic and Political Stakes

The legal challenge comes as tariffs have generated approximately $108 billion in revenue through July 2025, representing 5% of federal revenue compared to the historical 2%. However, economists warn that tariff costs are largely passed on to American consumers and businesses.

Trump himself has warned of a "1929-style Great Depression" if courts rule against his tariffs, claiming on Truth Social that "it would be impossible to ever recover" from such a ruling.

Historical Context: Nixon vs. Trump

The legal landscape has evolved significantly since President Nixon successfully imposed a 10% import surcharge in 1971 using similar emergency powers. The Court of International Trade distinguished Trump's case from Nixon's, noting several key differences:

• Legal framework: Nixon used the broader Trading with the Enemy Act, while Trump relied on the more constrained IEEPA

• Specific emergency: Nixon addressed a clear international monetary crisis, while Trump cited diffuse trade concerns

• Temporal limits: Nixon's measures were explicitly temporary, while Trump's had no clear endpoint

• Congressional intent: IEEPA was enacted specifically to limit the emergency powers Nixon had used

Implications for Presidential Power

The court rulings represent a significant reassertion of congressional authority over trade policy. Legal experts note that if Trump's interpretation of IEEPA were accepted, it would give presidents virtually unlimited power to impose taxes under the guise of national emergency.

The case also highlights how conservative legal doctrines developed to constrain liberal administrations are now being applied to limit Trump's actions. As one legal scholar observed, "If this issue gets to the Supreme Court... we believe the court's precedent requires them to rule in our favor".

Conclusion

The federal court rulings against Trump's tariff authority mark a watershed moment in the constitutional balance between executive and legislative power. By applying well-established legal doctrines—the Major Questions Doctrine and Nondelegation Doctrine—the courts have reaffirmed that the president is not a king who can impose taxes at will.

While the immediate impact remains limited due to the stay pending appeal, the legal precedent could fundamentally reshape how future presidents approach trade policy. The case underscores that even in an era of expanded executive power, constitutional limits still apply—and the courts are willing to enforce them.

As this historic case moves toward the Supreme Court, it will ultimately test whether the conservative legal principles of constitutional restraint will prevail over partisan politics, potentially limiting not just Trump's tariff powers but establishing lasting boundaries on presidential authority over the nation's purse strings.