Are Trump tariffs legal? Sceptical US Supreme Court hears case with implications for Singapore
The issue at the heart of the case is a 1977 law called the International Emergency Economic Powers Act
[NEW YORK] Spain, France, Switzerland, Canada, Brazil and China came up for a mention in the three-hour debate in the United States Supreme Court about US President Donald Trump’s favourite instrument for all seasons – tariffs.
Singapore was not named, but some parallels were striking as the nation’s highest court deliberated on Nov 5 whether Trump has the authority to impose sweeping tariffs on every US trading partner under a law that was designed for use during a national emergency.
This President has torn up the entire tariff architecture, argued Neal Katyal, a lawyer representing a group of small businesses challenging the Trump administration. He made the case that Trump’s tariffs did not address a real emergency.
“For example, he’s tariffing Switzerland, one of our allies, with which we have a trade surplus of 39 per cent,” Katyal said.
The argument would hold good for Singapore, America’s free trade partner since 2004 and with whom the US does not have a trade deficit, which Trump says is a sign of unfair trade practices by other countries that are hurting US manufacturing and national security and constitute a national emergency.
According to the Office of the US Trade Representative, the US goods trade surplus with Singapore was US$1.9 billion (S$2.48 billion) in 2024, while services trade surplus with Singapore was US$25.1 billion.
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“We have had all sorts of emergencies for 238 years,” Katyal said. “No president has ever said, ‘Oh, the way to deal with that is I need to have a tariff authority.’”
The hearing took place on the first anniversary of Trump’s victory in the 2024 election. Within months of being sworn in, he imposed the tariffs, which are estimated to be bringing in more than half a billion dollars in customs revenue daily.
Going by the points raised by the judges during the hearing, the US media has speculated that the ruling may not go Trump’s way, even though the 6-3 conservative majority in the Supreme Court has backed Trump in many contentious cases.
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If the court strikes down the tariffs as illegal in a decision that is expected in December, it would reduce the effective tariff rate on goods entering the US to 6.5 per cent from 15.9 per cent currently. For Singapore, that could mean the cancelling of the 10 per cent levied on the goods it exports to the US.
The ruling would also raise a clamour for refunds of around US$100 billion that have been collected by way of tariffs.
The issue at the heart of the case is a 1977 law called the International Emergency Economic Powers Act (Ieepa). The question is whether this law, which allows the president to regulate imports when there is an emergency, applies to the power to impose global tariffs of unspecified duration and breadth.
Trump, the first US president to use Ieepa to impose tariffs, says the statute presents no constraints on imposing tariffs.
His lawyer, Solicitor-General John Sauer, told the court that the president can “regulate” imports and exports in an emergency when there is an “unusual and extraordinary threat” to the nation.
“These are regulatory tariffs,” Sauer said. “They are not revenue-raising tariffs. The fact that they raise revenue is only incidental.”
He mentioned the deal the US is pursuing with China to crack down on fentanyl shipments – tied to deaths of thousands of Americans – as an emergency that tariffs helped to address.
Asked why no other president had used Ieepa to impose tariffs in trade disputes and other economic emergencies, he said tariffs were not the “natural tool” to address those problems.
For instance, he said, tariffs would not have made sense to deal with the Iranian hostage crisis under former president Jimmy Carter.
Opponents say Ieepa does not specifically mention tariffs. And that the tariffs are a form of tax and the US Constitution vests the Congress – not the president – with the power to raise revenue and to regulate trade with other nations.
They also say the president can sanction individuals and nations, but not levy tariffs – that amount to taxes – on them.
Additionally, Congress cannot just hand over its broad constitutional responsibility to the president.
The case tests what is called “major questions doctrine”, which says the president cannot impose a broad policy with significant consequences on society and the economy unless Congress passes a law that specifically allows for it.
The Supreme Court had invoked that doctrine when blocking former president Joe Biden’s attempt to forgive billions of dollars in student loan debt.
Sauer said the tariffs had helped Trump reach consequential trade deals to help the US economy. The “major questions doctrine” does not apply when a statute concerns the president’s constitutional authority over foreign affairs and national security, he argued.
Some of the strongest doubts were raised by chief justice John Roberts himself, appointed by former Republican president George W Bush.
He remarked, in the course of the hearings, that “tariffs are a tax and that has always been the core power of Congress” although he went on to describe them as “foreign-facing tax” and foreign affairs were within a president’s core powers.
He alluded to Trump’s frequent assertions that tariffs are responsible for significant reduction in the US deficit. “I would say that’s raising revenue domestically,” he said.
He also questioned whether the emergency-power law allowed for tariffs on “any product, from any country, in any amount, for any length of time”.
Justice Sonia Sotomayor, a liberal judge appointed by former Democratic president Barack Obama, questioned if some of Trump’s recent tariffs were for the reasons of national emergency.
“The President threatened to impose a 10 per cent tax on Canada for an ad it ran on tariffs,” she said, illustrating her point. “He imposed a 40 per cent tax on Brazil because its Supreme Court permitted the prosecution of one of its former presidents for criminal activity.”
Sauer’s arguments found favour with other conservative judges. Both Justice Amy Coney Barrett and Justice Brett Kavanaugh questioned why Ieepa would permit broad trade embargoes on other countries but not the less drastic option of tariffs.
The law is intended to address an emergency, but if tariffs are not included, “you’re taking away the president’s suite of tools”, Justice Kavanaugh said.
Justice Barrett said that it would make sense for Congress to authorise the president to use “weaker medicine” – like tariffs – than to completely shut down trade as leverage to try to get a foreign nation to do something.
But she questioned the encompassing nature of the tariffs. “Spain? France? I mean, I could see it with some countries but explain to me why as many countries needed to be subject to the reciprocal tariff policy.”
Closely following the back-and-forth between the judges and the lawyers was Elana Ruffman, 32, the scion of Learning Resources, who flew in from Illinois to attend the hearing.
Her family-owned firm, hit by the steep tariffs that apply to the educational toys it manufactures in China, was one of the companies that sued Trump to seek redress.
“We are grateful that the court heard arguments today on this landmark case,” Ruffman said, calling the tariffs a multi-trillion dollar tax burdening thousands of small businesses that were the backbone of the US economy.
“That’s all you can ask for, that the judicial system does its thing,” she said in an interview.
Ruffman said the lawsuit was not political. It was meant to protect the firm’s 500 employees and to keep making toys used by children who have intellectual or developmental disabilities.
“It’s just not realistic for us to make these products in the US, they would cost an obscene amount of money and become unaffordable,” she said, saying she was hopeful that the court would find the Ieepa tariffs illegal.
“We feel positive,” said Ruffman. THE STRAITS TIMES
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