Learn more about tariffs and how NRF remains committed to leading the retail industry in critical public policy conversations.
On Nov. 5, the Supreme Court heard one of the most significant trade cases in decades, and the retail industry was listening closely. At issue is a simple but consequential question: Can a president use emergency powers under the International Emergency Economic Powers Act to impose sweeping tariffs on imports, even when Congress has never expressly authorized such action?
Retailers bear the real-world costs of tariffs on global supply chains; the Court’s ruling could reshape how trade policy is executed, who sets the rules and how predictable the landscape will be in the years ahead.
For over two hours, justices across ideological lines expressed deep reservations about President Donald Trump’s use of IEEPA to levy global tariffs. The administration argued that ‘regulating imports’ under the statute includes the power to impose duties. But many justices seemed unconvinced that Congress, in a 1977 law written during the Cold War, meant to hand over the power to tax millions of American businesses and consumers.
Retailers watching the arguments noted the significance. “I was astonished to hear the government try to argue that tariffs are not taxes,” says Ben Knepler, owner of True Places. “The literal definition of a tariff is an import tax.”
Major policies, Chief Justice John Roberts suggested, require major authorization, not statutory inference. If a president wants to fundamentally reshape America’s trade relationships, Congress must say so clearly.
Small businesses, which make up 98% of retailers and support more than 13 million American jobs, are particularly vulnerable to tariffs. Learn more.
Tariffs are effectively taxes, Justice Neil Gorsuch reminded the courtroom, and the Constitution gives taxation power to Congress. The problem is not whether Congress can delegate some authority; it’s whether the judiciary should interpret vague statutory language to permit the executive branch to effectively swallow Congress’ role entirely.
The Court’s three liberal justices showed similar skepticism. Justice Sonia Sotomayor drew parallels to recent decisions in which the Court rejected the Biden administration’s own attempts to use emergency authority to enact large-scale economic programs. If emergency declarations can justify anything at any time, is there any limit?
Taken together, the bench sent a clear signal: The Court is deeply wary of a world in which tariff policy can be enacted unilaterally, with vast economic consequences, under emergency authority never explicitly written for that purpose.
Tariffs implemented without congressional approval have levied real, measurable costs on margins, consumer prices and production schedules. Richard Brown, who runs Proof Culture in Ohio, puts it bluntly: “The question isn’t whether tariffs are good policy — it’s whether any president can impose them unilaterally. [The] arguments suggest the answer is no, and businesses have already paid for that lesson.”
Retailers can plan for almost any policy, but they can’t plan for the ground shifting without warning.
A ruling against the Trump tariffs would not rewrite decades of trade law overnight. But it would send trade decisions back into their traditional arena: Congress. That shift could restore stability to businesses that need predictability instead of emergency-driven swings in import costs.
A ruling upholding the tariffs, however, would do the opposite. It would cement the idea that any administration — regardless of party — could impose sweeping duties almost instantaneously in response to a self-declared emergency. Trade policy could become more volatile, less consultative, and harder to predict.
Danny Reynolds, who runs the century-old Stephenson’s of Elkhart in Indiana, says he hoped the Court recognized that “the use of the IEEPA was not only economically harmful to millions of businesses, but also an overstep in authority that, constitutionally, clearly belongs to Congress.”
In the courtroom, the arguments felt constitutional. Outside it, they were operational, even existential, as business owners parse out what this means for their supply chain plans, seasonal buying calendars, margin pressures and customer affordability.
A clearer framework for how, when and by whom tariffs can be imposed won’t solve those challenges, but it would at least eliminate one of the most disruptive variables of the past six months — not knowing when the trade rules might change with the stroke of a pen.
The case is about constitutional limits; it is also about the daily realities of doing business in America.
