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Investing.com - President Donald Trump’s sweeping tariff policies will likely be in the spotlight once again this week, the Supreme Court hears oral arguments around the legality of the levies on Wednesday.
The case has been brought before the Supreme Court after lower courts ruled that the president had surpassed his authority by employing emergency federal measures to enact the elevated tariffs on a host of countries.
Whether the court’s 6-3 conservative majority finds in favor of Trump’s use of the 1977 International Emergency Economic Powers Act, or IEEPA, remains uncertain, although the Supreme Court has repeatedly sided with Trump in other key decisions so far this year.
Trump has become the first U.S. president to employ IEEPA as legal backing for imposing broad-based tariffs, arguing that a $1.2 trillion U.S. goods trade deficit in 2024 and American deaths from the painkiller fentanyl constituted national emergencies.
Should the tariffs be struck down, Trump would be left without a key tool he has utilized in negotiations with foreign nations throughout his second term in office.
Still, U.S. Treasury Secretary Scott Bessent has said he expects the high court to find in favor of the IEEPA-based duties. Bessent added that, in the event it does not, the White House could take advantage of other tariff authorities, including one which allows for 15% tariffs for 150 days to address trade imbalances.
"We expect to see markets react to the arguments, but would caution that skepticism by the judges of the U.S. government’s arguments alone is not a clear signal that they will strike down the tariffs," analysts at Raymond James including Ed Mills and Ellen Ehrnrooth said in a statement.
The analysts highlighted a focus on questions from Supreme Court Justices John Roberts and Neil Gorsuch, saying "the odds of the tariffs" being struck down may grow if they "voice skepticism."