A New York wine and spirits importer is heading to court on Tuesday to test President Trump’s authority to levy billions in global tariffs, which could provide an early read on whether a wide-ranging legal battle over the president’s trade war has a chance of halting the administration’s plans.
The forum for Tuesday’s hearing is the US Court of International Trade, a New York-based federal court that handles trade-related lawsuits. It will evaluate whether the importer’s claims justify temporarily or permanently blocking Trump’s tariffs.
The plaintiffs allege that the president lacked legal authority to unilaterally levy the duties. Their action is among at least seven lawsuits against the Trump administration challenging its authority to impose broad universal levies as well as more targeted measures that place taxes on items from specific countries or specific products.
Other plaintiffs challenging the tariffs include a group of blue states and a Native American tribe.
The authority being cited by the president and challenged by plaintiffs is the International Emergency Economic Powers Act of 1977 (IEEPA), which says that during a national emergency, the president, in order to respond to an “unusual and extraordinary threat” from abroad, can regulate economic transactions, including imports.
Congress passed the IEEPA to restrict presidents from overstepping a 1917 World War I-era law known as the Trading With the Enemy Act (TWEA). The act, which regulates US transactions with enemy powers, allowed the president to exercise broad economic power during wartime and during national emergencies.
However, after decades of expanded executive power claimed under the act, Congress adopted IEEPA and another law, the National Emergencies Act (NEA), to reel in executive authority. The Congressional Research Service said in a 2023 report that the law led to more than 40 years of presidentially declared national emergencies.
The president cited IEEPA in an executive order issued Feb. 1 when he declared that an influx of illegal immigration and drugs into the country posed a national emergency. China, Mexico, and Canada caused the emergency, according to the order, by failing to “arrest, seize, detain, or otherwise intercept chemical precursor suppliers, money launderers, other TCOs, criminals at large, and drugs.”
He also cited the law on April 2, so-called “Liberation Day,” when he announced “reciprocal” tariffs on many countries around the world.
The administration has since negotiated tariff suspensions with Canada and Mexico and paused the reciprocal duties for many countries. On Monday, President Trump announced that the US and China separately agreed to a 90-day pause on tariffs on each other’s goods.
The importers and their supporters argue that Congress never intended to extend monarch-like authority for US presidents to levy trade tariffs.
“The statute … does not authorize the president to unilaterally issue across-the-board worldwide tariffs,” the plaintiffs said in their lawsuit filed against the administration on April 14.
The plaintiffs go on to argue that even if the president were authorized under the IEEPA to impose tariffs, the national energy stated in the president’s executive order is a “figment” of his imagination.
“Trade deficits, which have persisted for decades without causing economic harm, are not an emergency,” the plaintiffs said in their complaint. “Nor do these trade deficits constitute an ‘unusual and extraordinary threat.’”
To evaluate the plaintiffs’ claims, a three-judge panel for the US trade court is expected to examine Trump’s use of the IEEPA under the “major questions doctrine” — a rule articulated by the US Supreme Court that applies high scrutiny to executive branch actions that raise national issues of “vast economic and political significance.”
Under the rule, judges presume that when a law does not explicitly grant executive authority, Congress may not have granted it.
The panel of judges presiding over the hearing include Judge Gary Katzmann, who was appointed by former President Barack Obama; Trump appointee Timothy Reif; and Judge Jane Restani, who was appointed by former President Ronald Reagan.
The major questions doctrine
The Trump administration will argue that the major questions doctrine — which was used to strike down an executive action from former President Joe Biden to issue $400 billion in student debt relief — does not apply to his decision to impose sweeping import tariffs.
“It’s now going to be all that stands between the Trump administration’s ability to impose very high tariffs,” said constitutional law professor Seth Chandler of the University of Houston Law Center.
In court documents, the Trump administration argued that while the high court declined a federal agency’s authority to act on an issue of vast economic and political significance, it should not apply the same reasoning to the executive’s imposition of tariffs.
Instead, the administration argues, the court should defer to the executive’s discretion on matters of national security and foreign affairs.
However, Chandler and Jonathan Entin, a constitutional law professor at Case Western Reserve University, said the trade court may choose to distinguish the student loan case from the tariff issue.
“If I’m the challengers, I’m going to invoke this case that says you don’t give the executive branch a blank check, but we’re dealing with a different sort of issue here. That is, the student loan forgiveness was a purely domestic issue.”
Entin said there’s another, less compelling argument that proposes that the tariff laws improperly delegate congressional authority to the president.
Prominent Republicans joined the importers in a brief that urges the judges to find Trump’s emergency-based tariffs illegal. They include state attorneys general, White House counsel, and senators, as well as law professors and former federal judges.
“Congress knows how to grant the president tariff authority when it wants to,” the supporters said in their court filing backing the plaintiffs.
The case could eventually reach the Supreme Court.
Entin said the Supreme Court hasn’t dealt with IEEPA very much but did so in Dames & Moore v. Regan, a 1981 case that upheld the president’s authority under the act to suspend legal claims against Iran to help resolve the Iran hostage crisis.
In another case dealing with an act that preceded the IEEPA, Yoshida International v. United States, the US Customs Court sided with a Japanese zipper maker, ruling that neither the Tariff Act nor the Trade Expansion Act gave former President Richard Nixon authority to set a 10% tariff on foreign goods.
“But the court said, ‘We don’t want to get into this,'” Chandler explained. “We think the president can declare an emergency, and we ought to be very deferential to that.”
“The question is, has [Trump] gone so far over the line here that the court should say just because you claim that there’s an emergency, it doesn’t mean that there is within the meaning of the statute? I don’t have a good feel for what this court is likely to do,” Entin said.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.
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