Supreme Court to Decide Future of Trump's Tariff Strategy as Foreign Policy Tool

US President Donald Trump

President Donald Trump views tariffs—and the threat of imposing them—as a powerful instrument to compel nations to comply with his demands.

In his second term, Trump has deployed tariffs in unprecedented ways, not only as the foundation of his economic strategy but also as the central element of his foreign policy approach.

He has leveraged these import taxes to pressure countries at war into agreeing to ceasefires. He has utilized them to force nations to strengthen their efforts against cross-border flows of illegal immigration and drugs. In Brazil's case, he applied tariffs as political pressure when its judicial system prosecuted a former leader who was his ally, and recently with Canada, he used them as punishment over a television advertisement.

This week, the Supreme Court is hearing arguments on whether the Republican president has exceeded his authority under federal law with many of his tariff actions. A ruling against him could restrict or eliminate this swift and direct leverage that has become instrumental to his foreign policy strategy.

Trump has increasingly expressed concern about the pending decision in a case he describes as one of the most significant in American history.

He has stated that it would be a "disaster" for the United States if the justices uphold lower court rulings that found he overstepped by using emergency powers legislation to implement his tariffs.

Though Trump initially indicated his desire to take the unusual step of attending the arguments personally, he announced Sunday that he had decided against it to avoid distracting from the proceedings. "I wanted to go so badly - I just don't want to do anything to deflect the importance of that decision," he told reporters aboard Air Force One.

In defending the tariffs, the Justice Department has emphasized the expansive manner in which Trump has employed them, arguing that these trade penalties fall within his authority over foreign affairs—an area where courts should defer to presidential judgment.

Earlier this year, two lower courts and most judges on the U.S. Court of Appeals for the Federal Circuit determined that Trump lacked authority under the International Emergency Economic Powers Act (IEEPA) to set tariffs—a power constitutionally granted to Congress. However, some dissenting judges contended that the 1977 law permits the president to regulate imports during emergencies without specific limitations.

The courts have maintained the tariffs while the Supreme Court deliberates. Meanwhile, Trump has continued to wield them as instruments to pressure or penalize other nations on matters both related and unrelated to trade.

"The fact of the matter is that President Trump has acted lawfully by using the tariff powers granted to him by Congress in IEEPA to deal with national emergencies and to safeguard our national security and economy," White House spokesman Kush Desai stated. "We look forward to ultimate victory on this matter with the Supreme Court."

Nevertheless, White House press secretary Karoline Leavitt acknowledged on Fox News' "Sunday Morning Futures" that the Trump administration is developing contingency strategies should the high court rule against them. "We do have backup plans," Leavitt said. "But ultimately...we are hopeful that the Supreme Court will rule on the right side of the law and do what's right for our country. The importance of this case cannot be overstated. The president must have the emergency authority to utilize tariffs."

Josh Lipsky, a former Obama White House and State Department official who now serves as international economics chair at the Atlantic Council, noted that modern presidents have typically employed financial sanctions such as asset freezes or trade restrictions—not tariffs—to achieve their foreign policy and national security objectives.

While other laws do permit presidential tariff implementation, they require months-long processes to justify the rates.

Trump, citing IEEPA, moves more rapidly and dramatically. He issues executive orders imposing new rates and threatens additional import taxes via social media, as he did in late October when provoked by an anti-tariff advertisement from Ontario province.

"Presidents have typically treated tariffs as a scalpel, not a sledgehammer," Lipsky observed.

In contrast, Trump has positioned tariffs as the cornerstone of his national security and foreign policy agenda. "All of it is interconnected and tariffs are at the heart of it," Lipsky explained.

For instance, earlier this year Trump threatened a 30% tariff on European imports—a substantial increase from the 1.2% rate before his administration. Seeking to secure Trump's support for NATO and security guarantees for Ukraine in its conflict with Russia, the European Union negotiated a settlement at 15% tariffs.

The EU Commission faced criticism from businesses and member states for excessive concessions. However, Trade Commissioner Maros Sefcovic defended the agreement, stating it was "not only about the trade. It's about security. It's about Ukraine."

Trump has been able "to use it in specific circumstances to get better deals - not just trade deals - but better deals overall than he might otherwise," according to Lipsky. "On the other hand, you would say there's probably some backlash."

Trump's tariff-based pressure tactics have strained relationships with both allies and adversaries. Some nations have responded by adopting more protectionist policies or strengthening ties with China, which has positioned itself as a champion of free trade.

The economic impact is also significant. Some businesses have transferred costs to consumers through price increases, while others have adopted a wait-and-see approach regarding tariff rates.

Traditionally, tariffs have been employed specifically to address trade practices.

"There's literally no precedent for the manner that President Trump is using them," said Emily Kilcrease, former deputy assistant U.S. trade representative who worked on trade issues at the National Security Council during the Obama, Trump and Biden administrations.

"The use of tariffs the way that President Trump is using them is like - just broadscale attack on an economy as a way to incentivize a foreign government to change their posture," explained Kilcrease, now a director at the Center for a New American Security think tank.

However, she acknowledges the case is not straightforward. Kilcrease believes there is a "decent chance" the Supreme Court could side with Trump because IEEPA provides the president with "broad, flexible emergency powers."

Additionally, this case comes before a Supreme Court that has thus far been reluctant to restrict Trump's extensive use of executive authority.

If the court limits Trump's powers, foreign governments might question whether to renegotiate recently concluded trade agreements with the Trump administration, experts suggest. However, political realities also come into play, as backing out of deals could impact other foreign policy or economic priorities.

The administration could pivot to justify tariffs under alternative laws, though this would likely entail a more complex and bureaucratic process, according to Kilcrease.

"It certainly doesn't take tariffs off the table," she noted. "It just makes them a little bit slower."