The Supreme Court on Wednesday began its highly anticipated consideration of President Trump’s sweeping blanket tariffs, with the lawyer for the government making an audacious case.
Trump’s duties “are not revenue-raising tariffs,” US Solicitor General D. John Sauer argued before the court, calling the tens of billions of dollars currently being brought in each month “only incidental.”
He went further, saying Trump has based his moves this year “not on the power to tax.” What Trump is imposing, he said, “are clearly regulatory tariffs, not taxes.”
The argument was met with immediate skepticism, leading both legal experts and the markets to conclude Wednesday that these blanket tariffs — a centerpiece of President Trump’s trade program — may be in peril.
The arguments on display Wednesday also come in the face of years of commentary from the president himself, who regularly declares that the revenues from his tariffs are anything but incidental.
Just last week, Trump posted on social media that recent trade deals were successful in part because “money is pouring into our country because of tariffs.”
The bottom line is that tariffs are literally defined as import taxes that are imposed by a government on incoming goods. They are collected from companies at US points of entry, like ports.
These tariffs are now bringing in tens of billions of dollars a month, which the president regularly touts as key to the US government’s bottom line.
Trump even set the stage for Wednesday’s argument with a Truth Social post, calling the case “literally, LIFE OR DEATH for our Country,” writing that tariffs are key for both “Financial and National Security.”
Even on Wednesday afternoon, shortly after the arguments concluded, Trump appeared in Miami and talked about how “tariffs are now projected to reduce our deficit by $4 trillion over the next 10 years.”
Pointed questions on tariffs and taxes
On the is-a-tariff-a-tax question, Chief Justice John Roberts offered the most pointed back-and-forth. He posited that regardless of why a president makes his moves, “the vehicle is an imposition of taxes on Americans, and that has always been the core power of Congress.”
He expressed further skepticism that any president’s foreign policy prerogatives could “trump that basic power of Congress.”
It was just one moment during a lively back-and-forth that stretched for over two and a half hours. The hearing also saw lawyers seeking to scrap Trump’s tariffs face difficult questioning of their own — but far from the grilling that Sauer received.
At another point, Justice Sonia Sotomayor said to Sauer, “I just don’t understand this argument, … you want to say tariffs are not taxes, but that’s exactly what they are.”
Sauer chose to instead define the duties imposed as “foreign-facing regulation of foreign commerce.”
The lawyers on the other side also leaned into the tax question
Neal Katyal, a former principal deputy US Solicitor General, made the lead case that Trump’s tariffs are illegal, beginning his commentary by saying, “Tariffs are taxes, … the president bypassed Congress and imposed one of the largest tax increases in our lifetimes.”
For his part, Trump has also often avoided calling tariffs taxes — and claimed that Americans don’t pay the duties in the face of studies that show the opposite to be true — but he regularly touts their money-raising potential.
Indeed, Trump and Treasury Secretary Scott Bessent, who was in attendance at the arguments on Wednesday, heralded tariff revenues at nearly every opportunity.
Earlier this fall, when figures came in showing monthly tariff revenue near $30 billion, Bessent posted that the growth in revenue was helping the Trump administration in “fixing the financial shambles it inherited.”
Trump has also often said that being forced to give back tariff revenues could be ruinous for US balance books and said these revenues could help balance the budget and even lower other taxes.
On the campaign trail last year, Trump even floated ending the income tax because of tariff revenues.
Speaking to reporters at the White House after the hearing, Bessent offered an upbeat assessment, saying the government’s lawyer “made a very powerful case,” while waving away multiple questions about the backup plan if the court rules against the tariffs.
Pressed on the apparent disconnect between his regular touting of tariff revenue and the case laid out Wednesday, Bessent described his desire for tariffs to be a “shrinking ice cube” that lessens in value over time, saying that “the ultimate goal is balance.”
Skeptical questions on varied topics
On Wednesday, the three Republican-appointed justices posed skeptical questions to Trump’s team on various fronts.
The three justices appointed by Democratic presidents — Sotomayor, Ketanji Brown Jackson, and Elena Kagan — were deeply critical of Trump’s tariffs but would need two conservative-leaning justices to join them to prevail.
“I want you to explain to me how you draw the line,” Justice Neil Gorsuch pressed Sauer on whether a president’s foreign affairs should be excluded from strict congressional oversight.
“What would prohibit Congress from just abdicating all responsibility to regulate foreign commerce — and, for that matter, declare war — to the president?” Gorsuch added.
Justice Amy Coney Barrett — another potentially pivotal vote — turned at one point to the issue of whether Trump’s declarations of economic emergency rose to the definition.
“Is it your contention that every country needed to be tariffed because of threats to the defense and industrial base? I mean, Spain? France?” she asked about Trump’s reciprocal “Liberation Day” tariffs that were imposed using this emergency authority.
The case — formally known as Learning Resources, Inc. v. Trump — centers on a 1977 law called the International Emergency Economic Powers Act (IEEPA), which gives the president the ability to declare an economic emergency and take action but doesn’t specifically outline tariffs as a remedy.
Trump and his team have seized on the law to declare a variety of economic emergencies — over issues ranging from fentanyl to trade imbalances and more — and imposed blanket tariffs in response.
Meanwhile, other Trump tariff authorities — such as the so-called Section 232 tariffs that have allowed a range of new sector-specific duties on goods like automobiles and steel — are not up for debate this week.
