Supreme Court to Decide on Constitutionality of Trump Tariffs

The future of many of Donald Trump’s tariffs is uncertain, pending a Supreme Court ruling on the administration’s global trade barriers. The legal question of whether the policy is constitutional is separate from whether it is a sound policy decision.

Founders and Economic Democracy

The U.S. founders supported economic democracy, a decision-making process that incorporates the viewpoints of everyone affected. This is reflected in the U.S. Constitution, which grants tariff- and tax-making powers exclusively to Congress. This arrangement was intended to ensure the legitimacy of tariffs and taxes through voter approval, allowing citizens to act through the ballot box. While the president isn’t powerless over trade, Congress has previously passed laws delegating tariff-making authority to the executive branch on an emergency basis, subject to constitutional checks and balances.

The Stakes for Economic Democracy

The Supreme Court is currently considering Trump’s interpretation of the International Emergency Economic Powers Act of 1977. In April 2025, Trump interpreted the law, which allows the president to respond to “any unusual and extraordinary threat,” to permit tariffs of any amount on products from nearly every country. The act lacks checks and balances on the president’s tariff powers and does not even mention tariffs among its remedies. This unrestrained use of tariffs was unprecedented.

This move raises concerns for economic democracy. A concentration of power is a danger, as congressional debate and voting provide a transparent process that balances competing interests, preventing a single individual from controlling complete power. Trump’s tariffs, however, were determined largely by his own political score-settling and ideological preferences, bypassing the role of Congress as a check and balance.

Uncertainty and Accountability

Trump’s use of the International Emergency Economic Powers Act creates uncertainty, as tariffs can be altered and changed in the future. While supporters argue this provides a bargaining advantage, economists note it compromises efforts to revitalize American industries, as both domestic and foreign investment depend on stable import market access. There is evidence of reductions in hiring and capital investment in the manufacturing sector due to this uncertainty.

Furthermore, circumventing Congress can lead to tariffs being used as a stealth way of increasing taxes, with the costs ultimately borne by domestic consumers and importing companies. Trump’s interpretation has allowed him to potentially generate over $2 trillion in government revenue over a 10-year period.

Corruption Concerns

The unilateral and changeable nature of Trump’s tariffs creates an incentive for political favoritism and even bribery. This involves “rent seeking,” the attempt to gain extra value through influence. Trump has already granted tariff exemptions to major U.S. companies, and there is potential for recipients of these exemptions to offer contributions to political causes or other favors. Smaller, less politically influential businesses lack the same leverage.

This system also allows for trade deals that focus on extracting bilateral deals without considering broader U.S. interests. Some foreign governments have offered Trump personal gifts in exchange for favorable terms, which scholars of good international governance have noted is not the best way to conduct global affairs.

Historical Context

The founders designed a tariff order aimed at maintaining democratic legitimacy and preventing the concentration of power. A challenge to this order could have worrisome consequences for both democracy and the economy.