The U.S. Supreme Court is set to hear one of the most consequential trade cases in decades — a legal challenge that could determine whether President Donald Trump overstepped his authority in slapping tariffs on nearly every major U.S. trading partner, including Canada.
At issue is Trump’s use of the International Emergency Economic Powers Act (IEEPA) of 1977, a law designed to let presidents respond to national emergencies, not to impose broad trade duties. Critics say Trump’s use of IEEPA for his so-called “Liberation Day” tariffs and fentanyl-related duties amounts to an unconstitutional power grab that bypasses Congress, which the Constitution explicitly gives control over tariffs and taxation.
“This case is about whether the president can impose tariffs on any country, at any rate, for any reason,” said Jeffrey Schwab of the Liberty Justice Center, which represents small businesses challenging the tariffs. “That essentially makes IEEPA a blank cheque — and that can’t be what Congress intended.”
Trump, in a series of fiery social media posts, called the case “one of the most important in the History of the Country,” warning that restricting his tariff powers would “ruin our nation” and leave the U.S. “defenceless.” His administration insists the law’s wording — granting power to “regulate importation” — implicitly authorizes tariffs in emergencies.
The Court will weigh whether that interpretation violates the major questions doctrine, which demands explicit congressional approval for significant economic actions, and the non-delegation doctrine, which bars Congress from surrendering its legislative powers.
The case could have major implications for Canada, which was hit with 25 per cent tariffs in March after Trump declared a fentanyl-related emergency at the northern border — despite U.S. data showing minimal fentanyl flow from Canada compared to Mexico. When Ottawa pushed back, Trump escalated the duties to 35 per cent in August, briefly thawing relations only after Prime Minister Mark Carney visited Washington last month. But talks collapsed again after an Ontario TV ad quoted Ronald Reagan criticizing tariffs, prompting Trump to threaten even higher duties.
A ruling against Trump could strike down his use of IEEPA to impose tariffs, potentially lifting some pressure off Canadian exporters. However, analysts note that Trump still wields other tools — including Section 232 of the Trade Expansion Act of 1962, under which he’s already targeted Canada’s steel, aluminum, auto, and lumber industries.
Trade lawyer Tim Brightbill of Wiley Rein LLP said Trump’s team is “ready to pivot” to other measures if the Court restricts IEEPA powers. “Tariffs are a cornerstone of this administration’s economic strategy,” he said.
The Supreme Court is expected to deliver its ruling before June, a decision that could redefine the limits of presidential power over global trade — and reshape Canada–U.S. economic relations once again.