- Legal challenge: Five businesses and 12 states are suing President Trump, arguing he lacks legal authority to impose tariffs unilaterally
- Constitutional issue: Plaintiffs claim that using emergency powers for tariffs is not authorized by the statute the president relies on and that, even if the statute did authorize the tariff orders, the statute would violate the separation of powers since tariff authority belongs to Congress, not the president
- Court ruling: A federal trade court already blocked Trump’s tariffs in May, but the case is on appeal and will likely reach the U.S. Supreme Court
Tariffs function as taxes, with the costs of import duties on goods entering the United States primarily falling on American companies and consumers. The key legal question now centers on whether tariffs unilaterally imposed by President Donald Trump through broad interpretations of emergency executive authority can survive federal judicial scrutiny. Early indications suggest optimism for those who believe that legislation designed to limit presidential power shouldn’t be interpreted as granting the president unilateral control over trade policy.
Recently, the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., heard oral arguments in V.O.S. Selections, Inc. v. Trump. Five small business owners and 12 states filed separate but now consolidated lawsuits challenging the president’s tariff orders. The case tackled what may be a foundational flaw in Trump’s tariff orders, specifically that he lacks legal authority for those orders.
The Liberty Justice Center represents the plaintiffs, working alongside co-counsel Ilya Somin, who teaches law at George Mason University’s Scalia Law School. The legal challenge targets the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to justify the “Liberation Day” tariffs affecting much of the global market, plus additional tariffs targeting Mexico, Canada, and China.
The plaintiffs contend that IEEPA permits presidents to exercise emergency economic powers only “to deal with an unusual and extraordinary threat” to national security, foreign policy, or the economy originating outside the United States. The lawsuit argues that the administration’s rationale — citing a trade deficit in goods — fails to meet the criteria of either an emergency or an unusual and extraordinary threat.
Congress enacted IEEPA to constrain rather than expand presidential authority. A 2024 Congressional Research Service report explains that after committee investigations revealed the United States had remained under emergency status for over four decades, Congress enacted the National Emergencies Act (NEA) in 1976 and IEEPA in 1977 to limit the emergency powers that it had delegated to the president under the Trading with the Enemy Act (TWEA). These paired statutes imposed new restrictions on presidential emergency powers, requiring presidents to conduct annual emergency assessments, extend an emergency when warranted, and provide regular status reports to Congress.
In practical terms, when an “emergency” persists for years, it ceases to be an emergency and becomes the status quo. This concern forms a central element of the plaintiffs’ argument: trade deficits have persisted for decades and don’t constitute a national emergency or security threat.
Plaintiffs further argue that IEEPA doesn’t authorize presidential tariff imposition — in fact, it contains no tariff authorization whatsoever. IEEPA contains no mention of “tariffs” or “duties,” and no president had invoked it for tariff purposes during the nearly 50 years since its passage — until now.
The IEEPA gives the president authority to take specific actions, like imposing sanctions or freezing assets, if he declares a national emergency in response to a foreign national security, foreign policy, or economic threat. The law specifies many actions the president can take, but tariffs aren’t one of them. During last week’s oral argument, several judges noted IEEPA doesn’t even mention the word “tariffs.”
Even if IEEPA attempted to grant such presidential power, the plaintiffs contend that it would represent an unconstitutional transfer of Congress’s tariff authority. The United States Constitution sets out the architecture of government. Articles I, II, and III of the Constitution each begin with a Vesting Clause, which assigns the legislative, executive, and judicial powers, respectively, to separate branches of the federal government. This separation of powers framework drew from the ideas of John Locke and William Blackstone, among others. The Framers of the Constitution sought to prevent the consolidation of power in any single branch of government for fear an overly powerful branch could become tyrannical.
The plaintiffs and supporting organizations argue that the Trump administration is creating unilateral tariff authority that Congress never granted and cannot constitutionally delegate to the executive branch. According to the plaintiffs and several amicus briefs from across the ideological spectrum, the White House’s position misinterprets the law and violates separation of powers principles.
These arguments succeeded in May before a three-judge panel at the U.S. Court of International Trade. That court determined the president’s tariff orders “exceed any authority granted to the president by IEEPA to regulate importation by means of tariffs” and blocked the Tariff Orders.
Regardless of this case’s outcome, the legal battle will continue. A similar case is pending at the D.C. Circuit Court of Appeals. The John Locke Foundation has joined several others in submitting a friend of the court brief filed by Advancing American Freedom in support of the plaintiffs. One or more of the many lawsuits challenging Trump’s trade orders will undoubtedly reach the U.S. Supreme Court.
