On November 5, 2025, the U.S. Supreme Court heard oral arguments in Learning Resources, Inc. v. Trump (No. 24-1287), a case examining whether the International Emergency Economic Powers Act (IEEPA) authorizes the President to impose tariffs as a response to declared national emergencies.

Background

The case challenges the scope of presidential authority under IEEPA, a 1977 statute enacted to grant the executive branch tools to address extraordinary threats originating outside the United States. Historically, IEEPA has been used for targeted sanctions, asset freezes, and restrictions on specific entities or individuals. The question before the Court is whether the Act’s language — particularly the authority to “regulate importation” — extends to imposing tariffs.

Arguments Before the Court

For the Administration:
General D. John Sauer, representing President Trump, argued that the phrase “regulate importation” within IEEPA provides the President with authority to impose tariffs during national emergencies. Sauer cited historical examples, including President Nixon’s 1971 actions under the Trading with the Enemy Act (TWEA), as precedent for executive authority over imports. He stated that such powers are essential tools for addressing emergencies such as trade deficits and fentanyl trafficking, emphasizing that the administration’s measures are aimed at national security threats rather than revenue generation. Sauer also pointed to recent trade negotiations, including agreements with China, as evidence of the effectiveness of these measures.

For the Challengers:
Neal K. Katyal, representing private petitioners, contended that IEEPA was enacted to restrict presidential powers following prior overreach under TWEA. He argued that tariffs constitute domestic taxes that directly affect U.S. importers and consumers — powers that belong exclusively to Congress under Article I of the Constitution. Katyal asserted that extending tariff authority to the executive branch would erode the constitutional separation of powers.

For the States:
Oregon Solicitor General Benjamin Gutman joined in opposition, stating that IEEPA was designed for targeted sanctions, not broad trade measures or efforts to manage economic conditions. Gutman warned that interpreting IEEPA to include tariff authority would disrupt the balance between Congress and the executive branch established by the Constitution.

Broader Implications

The case raises significant legal and policy questions for the trade community:

• Whether tariffs, by their revenue-generating nature, should be considered a form of taxation.
• Whether the use of IEEPA to impose tariffs aligns with the statute’s intent to address genuine emergencies rather than serve as a broad economic instrument.
• Whether the scope of “regulate importation” could be interpreted to encompass tariffs or other mechanisms such as import licensing.

As of now, 19 CFR does not contain a definition of the term “tariff,” leaving the statutory interpretation to the Court’s analysis.

Next Steps

A decision in Learning Resources, Inc. v. Trump is expected later in the Supreme Court’s 2025–2026 term. The full oral argument audio is available on the Supreme Court’s website:
https://www.supremecourt.gov/oral_arguments/audio/2025/24-1287

J.O. Alvarez, Inc. will continue monitoring developments and provide updates as the Court’s decision and any resulting trade policy implications unfold.