The year 2025 has been branded the "year of the tariff" by the Trump administration, but a pivotal decision from the U.S. Supreme Court could determine whether 2026 becomes the year those tariffs are struck down. The high court has expedited litigation and is set to hear oral arguments this autumn, with a verdict anticipated early in the new year.
The Legal Challenge to Presidential Power
At the heart of the case is President Donald Trump's use of the International Emergency Economic Powers Act (IEEPA). In 2025, Trump declared national emergencies related to fentanyl trafficking and the U.S. trade deficit, using this authority as the legal foundation for imposing sweeping tariffs. The central question before the justices is whether this application of presidential power is constitutional, or if it encroaches on Congress's sole authority to levy taxes, which tariffs are considered to be.
U.S. Trade Representative Jamieson Greer solidified the administration's stance, writing in an op-ed that "The year 2025 will be remembered as the year of the tariff, regardless of one’s economic ideology." He framed the policy as a tool for accelerating re-industrialization and serving the national interest. However, this move has sparked significant legal pushback, placing the future of these trade measures in the hands of the Supreme Court.
Expert Skepticism and Economic Impact
While the White House has expressed confidence in a favourable ruling, many trade policy analysts are predicting the opposite outcome. Clark Packard, a research fellow at the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies, points to a judicial skepticism based on the separation of powers. "If it’s a tax, then that power resides with Congress to set those rates," Packard noted, summarizing a key argument against the administration's position.
The sentiment is echoed by Andrew Hale, a senior policy fellow at the Heritage Foundation in Washington, D.C., who called the tariffs "fundamentally illegal." Hale stated the ruling is a "foregone conclusion" and that the court will vote down the IEEPA justification. He highlighted growing economic strain, noting that even Republican supporters are feeling the pinch, with one donor and fundraiser reportedly forced to lay off workers due to tariff-related costs.
Implications for Canada and Global Trade
The Supreme Court's decision will have profound consequences far beyond U.S. borders, with Canada poised to be directly affected. A ruling against the tariffs could dismantle a key pillar of Trump's trade war strategy, potentially easing tensions and altering the cost structure for billions of dollars in cross-border commerce. Conversely, a ruling in the president's favour would solidify and potentially expand his authority to use national emergency declarations for economic policy, setting a significant precedent.
The expedited timeline means businesses, consumers, and trading partners will not have to wait long for clarity. As 2025 closes as the definitive "year of the tariff," the opening months of 2026 will answer whether that era continues or meets its constitutional end in the highest court of the United States.
