What may be the biggest battle yet in Donald Trump's trade war is about to begin. The Trump administration heads to the US Supreme Court on Wednesday, facing off against small businesses and a group of states who contend most of the tariffs it has put in place are illegal and should be struck down.
If the court agrees with them, Trump's trade strategy would be upended, including the sweeping global tariffs he first announced in April. The government would also likely have to refund some of the billions of dollars it has collected through the tariffs, which are taxes on imports.
The final decision from the justices will come after what could be months of poring over the arguments and discussing the merits of the case. Eventually they will hold a vote.
Trump has described the fight in epic terms, warning a loss would tie his hands in trade negotiations and imperil national security. He has even suggested he might take the unprecedented step of hearing the arguments at court in person.
If we don't win that case, we will be a weakened, troubled, financial mess for many, many years to come, he said.
The stakes feel just as high for many businesses in the US and abroad, which have been paying the price while getting whipped about by fast-changing policies.
Trump's tariffs will cost Learning Resources, a US seller of toys made mostly overseas and one of the businesses suing the government, $14m (£10.66m) this year. That is seven times what it spent on tariffs in 2024, according to CEO Rick Woldenberg.
In deciding this case, the Supreme Court will have to take on a broader question: How far does presidential power go?
Legal analysts say it is hard to predict the justices' answer, but a ruling siding with Trump will give him and future White House occupants greater reach. Specifically, the case concerns tariffs that the Trump administration imposed using the 1977 International Emergency Economic Powers Act (IEEPA), which the White House has embraced for its speed and flexibility.
Opponents say the law authorises the president to regulate trade but never mentions the word tariffs, and they contend that only Congress can establish taxes under the US Constitution. They have also challenged whether the issues cited by the White House, especially the trade deficit, represent emergencies.
Whatever the court decides will have significant implications for an estimated $90 billion worth of import taxes already paid, adding to the tension surrounding the outcome.
With the weight of a national economic strategy at stake, how the court rules could redefine the balance of power in U.S. trade and economic policy for years to come.
