This week, the U.S. Supreme Court heard legal challenges to President Donald Trump’s use of emergency powers to raise tariffs on trading partners.
At issue is the International Emergency Economic Powers Act (IEEPA) of 1977, which gives the president special authority over economic transactions during a national emergency.
The act historically has been used for foreign sanctions. Trump is the first president to invoke the IEEPA to impose tariffs. First he declared a national emergency over the fentanyl crisis in the United States to impose tariffs on China, Canada and Mexico. He then declared that the U.S. trade deficit is a national emergency to justify imposing high tariffs on trading partners around the world.
At the November 5 court hearing, each side had 40 minutes to make their arguments followed by questions from the nine justices — although the time went longer. The court has until the end of its term in July 2026 to issue a ruling but many are hoping the court will reach a decision sooner, considering the global impact.
Earlier this year, the Congressional Budget Office projected President Trump’s tariff revenues will bring in $4 trillion to the U.S. Treasury over 10 years. Approximately $195 billion in revenue has been collected through October. Potentially at issue is whether these tariffs would need to be returned and how that process would be implemented.
Other Forms of Tariffs
If IEEPA is not a viable tool to collect tariffs, other potential avenues are available — although none are as clear cut and direct as IEEPA.
Tariffs can be product specific under Section 232 of the Trade Expansion Act of 1962 to protect national security — via the U.S. Department of Commerce.
Tariffs can be country specific under Section 301 of the Trade Act of 1974 to protect U.S. commerce from harmful foreign trade practices — via the U.S. Trade Representative’s Office.
Temporary tariffs of 15% for 150 days can be imposed via Section 122 of the 1974 Trade Act — via the U.S. Trade Representative’s Office.
Tariffs can be reciprocal to match other countries via Section 338 of the Trade Act of 1930 — allowing duties of up to 50% and allowing the President to act unilaterally within 30 days.
CalChamber Position
The California Chamber of Commerce will continue to focus on lowering and eliminating tariff and nontariff barriers to support the expansion of American exports. While strategic use of tariffs or the threat of tariffs may be a meaningful negotiation tool, the CalChamber supports efforts to reduce taxation and regulatory burden as a means to create jobs and economic growth. Further, a focus on trade agreements instead ultimately will lower both tariff and nontariff barriers and help create long-term, sustainable economic growth.
The CalChamber opposes protectionist measures which create uncertainty, disrupt global supply chains, raise consumer prices, limit choices of products for consumers, hinder the competitiveness of California businesses, and invite retaliation.
The CalChamber believes strengthening economic ties and enhancing regulatory cooperation through agreements with our top trading partners that encompass both goods and services, including financial services, is essential to eliminating unnecessary regulatory divergences that may act as a drag on economic growth and job creation.
The CalChamber seeks commercially meaningful outcomes in negotiations with regions around the world and supports bilateral, regional and multilateral trade agreements, which are critical to consumers, workers, businesses, farmers and ranchers, and would allow the United States to compete with other countries that are negotiating agreements with each other
