By Harshit WASHINGTON, Nov. 4
The Supreme Court is set to hear one of the most consequential economic cases of President Donald Trump’s second term on Wednesday, a challenge to the legality of the sweeping tariffs he imposed under the International Emergency Economic Powers Act (IEEPA). Treasury Secretary Scott Bessent, speaking on CNBC’s Squawk Box Tuesday morning, expressed confidence that the administration will prevail — but noted that the White House has backup options should the Court rule against it.
A Crucial Test of Presidential Trade Powers
At the heart of the case is whether Trump exceeded his authority under IEEPA by enacting tariffs on a broad range of U.S. trading partners. The law, originally designed to allow presidents to respond to national emergencies with economic tools, became a cornerstone of Trump’s trade policy during his first and second terms.
The outcome could redefine the limits of presidential power over trade, potentially reshaping how future administrations use tariffs as an instrument of economic leverage. “There are lots of other authorities that can be used, but IEEPA is by far the cleanest, and it gives the U.S. and the president the most negotiating authority,” Bessent said. “The others are more cumbersome, but they can be effective.”
Bessent Confident in Administration’s Case
Bessent’s remarks underscored the administration’s confidence ahead of Wednesday’s Supreme Court hearing. He maintained that Trump’s actions were consistent with longstanding presidential discretion over international economic measures. “This is very important tomorrow, and SCOTUS is going to hear this,” he said, referring to the Court’s nickname. “This is a signature policy for the President, and traditionally, SCOTUS has been loath to interfere with these signature policies.”
The Treasury Secretary’s comments suggest that even a negative ruling may not halt the administration’s broader trade agenda. Bessent said other provisions, such as Section 232 of the Trade Expansion Act of 1962—which permits tariffs on national security grounds—and Section 301 of the Trade Act of 1974, dealing with unfair trading practices, remain available tools.
However, these alternatives are narrower in scope and could constrain the administration’s ability to deploy tariffs as aggressively as it has under IEEPA.
Potential Ripple Effects on U.S. and Global Markets
The Supreme Court’s decision, expected within months, could have major implications for global markets and the White House’s economic strategy. Trump’s tariffs have long been central to his “America First” policy, aimed at pressuring foreign governments to open markets and relocate manufacturing back to the United States.
Economists warn that if the Court restricts the use of IEEPA, future presidents could find it more difficult to impose trade measures swiftly during crises. Investors and business leaders are closely watching the proceedings for signs of potential volatility in commodities and equities tied to import-sensitive industries.
“Markets hate uncertainty,” said an independent trade analyst in Washington. “If the Court strikes down IEEPA-based tariffs, we could see temporary shocks in sectors dependent on protected goods — particularly steel, semiconductors, and autos.”
U.S.–China Relations Enter a Softer Phase
Beyond the courtroom battle, Bessent highlighted improving diplomatic ties between Washington and Beijing. His remarks followed a recent meeting between President Trump and Chinese President Xi Jinping in South Korea, which yielded agreements rolling back certain tariffs that had strained relations since 2018.
“It was a very good meeting. Both sides approached it with great respect,” Bessent said. “I think President Trump is the only leader who President Xi respects. … The relationship is in a good place.”
According to Bessent, two state visits are planned for 2026 — one in Beijing and another in the United States — signaling renewed efforts to stabilize the world’s largest bilateral trade relationship.
Looking Ahead
As the Supreme Court prepares to weigh the scope of presidential power over trade, the stakes extend beyond Trump’s own policies. The ruling could set a long-term precedent affecting how future administrations wield economic sanctions and tariffs under emergency authorities.
For now, the administration is standing firm. “We’re confident in our position,” Bessent reiterated. “But we’re ready to act under other authorities if necessary.”
If the Court sides with the government, it would affirm one of the broadest interpretations of executive economic power in decades — a decision that could embolden future presidents to act unilaterally in global trade policy.