Two pivotal court cases are reshaping the legal landscape around presidential tariff powers, with billions in trade and constitutional authority hanging in the balance. As conflicting rulings from two federal courts head toward a likely Supreme Court review, the outcome could redefine the limits of executive power in trade policy
Key findings: Conflicting court rulings— Two federal courts he issued opposing decisions on the legality of Trump-era tariffs, creating a jurisdictional clash that may force the Supreme Court to intervene. Massive stakes for importers — A ruling against the tariffs could trigger large-scale refunds and curtail executive trade authority; a ruling in for could entrench broad presidential powers around trade. Uncertain timeline & political fallout— With expedited appeals underway and potential Supreme Court review by mid-2026, the litigation is already fueling legislative reform efforts and shaping the future of US trade governanceTwo landmark cases are now at the center of the legal battle over former President Trump’s use of emergency powers to impose sweeping tariffs. With conflicting rulings from federal courts and billions in trade at stake, this could be the most consequential trade-based decision ever put before the United States Supreme Court.
To help nigate this tricky, complex web of litigation, Stephen Josey, a tax controversy attorney from the international law firm Vinson & Elkins, offered his insight into the current situation, its major factors, and where things may go from here.
Two courts, two pathsThe first of the two major cases is V.O.S. Selections Inc. v. Trump, a consolidated case combining that of a small business importer with separate lawsuits filed by various states that is being tried in the U.S. Court of International Trade (CIT), a specialized court with jurisdiction over customs and trade matters. Meanwhile, in another case, Learning Resources, Inc. v. Trump, plaintiffs took a more traditional approach, taking it before to the U.S. District Court for the District of Columbia.
While the named plaintiffs are mostly importers and small businesses, the legal fight has drawn in heyweight political backing. In the CIT case, several states (including Oregon and New York) he filed briefs supporting the challenge, arguing that the tariffs he harmed their economies and exceeded presidential authority. The DC District case has seen similar support, with a coalition of states and trade associations lining up behind the plaintiffs. These aren’t just isolated business disputes; rather, they’re part of a broader constitutional clash over the limits of President Trump’s executive power, with Democrat-led state governments stepping in to defend their interests.
One of the more arcane but critical issues in the litigation is that of jurisdiction, which can be a make or break for these kinds of cases even before argument on the merits becomes a factor.Currently, in V.O.S. Selections and in another case, State of Oregon v. Trump, the CIT ruled that the tariffs issued by President Trump under the International Emergency Economic Powers Act (IEEPA) were unlawful. The court found that the national emergency declared by President Trump did not justify the remedy. To put it simply, tariffs on goods from China, Mexico, and India were illegal because the triggering emergency (fentanyl trafficking and trade deficits) bore no rational connection to the trade measures imposed, the CIT ruled.
Meanwhile, in Learning Resources, the DC District court went even further, holding that the IEEPA doesn’t authorize tariffs at all. The statute, which has historically been used to freeze assets or block specific transactions, contains no mention of tariffs and was never intended as a tool for reshaping global trade.
These rulings are now stayed pending appeal. The U.S. Court of Appeals for the Federal Circuit has agreed to hear the CIT cases en banc on an expedited basis starting July 31, while the DC District court’s injunction has been paused by the U.S. Court of Appeals for the District of Columbia Circuit. For now, importers must continue paying the tariffs — but the legal ground beneath them is anything but stable.
What’s at stakeOne of the more arcane but critical issues in the litigation is that of jurisdiction, which can be a make or break for these kinds of cases even before argument on the merits becomes a factor. Vinson & Elkins’ Josey says that while it appears that a Congressional statute gives exclusive jurisdiction to the CIT to consider these challenges to the president’s authority under the IEEPA, as it has near exclusive authority over tariff-related cases, the DC District court’s ruling has created a parallel litigation track. While district courts he occasionally weighed in on trade matters, they’ve rarely done so in direct opposition to the CIT.
“Several other federal district courts — including one in Florida and one in Montana — he transferred cases challenging the IEEPA tariffs to the CIT due to a holding that the jurisdictional statute (28 USC Sec. 1581(i)) confers exclusive jurisdiction on the CIT,” Josey notes, further supporting the CIT as the likeliest venue for a true resolution.
Further, the implications of these cases go far beyond the named plaintiffs. If the courts ultimately rule that the IEEPA tariffs were imposed ultra vires — beyond the President’s legal authority — it could trigger it could usher in a we of duty refund claims and severely curtail the executive branch’s ability to unilaterally reshape trade policy. Conversely, if the ruling is in for of the President’s actions, it would signal a massive expansion of presidential authority which is likely to reshape the relationship between the U.S. Congress and the President. A case with such substantial implications is all but certain to end up before the Supreme Court.
At that point, there are four likely paths forward:
The Supreme Court grants certiorari — Affirming the lower courts’ rulings would greatly curtaining President Trump’s ability to place tariffs without the authorization of Congress. It could also trigger a return of previously collected tariff revenue. The Supreme Court reverses — By restoring broad presidential authority under IEEPA would allow the administration to continue on its current course without oversite. The Court punts — By either ruling narrowly or on procedural grounds, the Court could lee the core question unresolved and effectively allow President Trump to continue as is while forcing plaintiffs to go back to the beginning, potentially delaying any ruling until 2027 or 2028. The Court could issue a split decision — By upholding one ruling while reversing another, the Court could simply complicate the effort even further.The timeline is fluid. The Federal Circuit’s expedited review could yield a decision by late summer or early fall. From there, a Supreme Court petition could be filed before year’s end, with a final ruling possible by June 2026.
Of course, it’s impossible to know which of the paths the Supreme Court (or even the Appeals Courts) would take, Josey says, adding that this could lee a massive question mark hanging over the US economy, which in turn could potentially set up a substantial we of significant duty refund claims to consider if things go against the Trump Administration.
Policy fallout and the road aheadRegardless of the outcome, the litigation has already sparked calls for reform. Democratic lawmakers are eyeing the Trade Review Act, which would limit presidential authority under IEEPA and require Congressional approval for future tariff actions. But with the current Congress in control of the president’s party, any action is unlikely until after the 2026 mid-term elections.
“International trade law has always been around, but it wasn’t recently front of mind until Trump’s first term,” explains Josey. “Now, it’s front and center — and the courts are being asked to draw the line.”
Whether that line holds — or shifts again — will shape the future of US trade policy for years to come.
You can download a full copy of the Thomson Reuters Institute’s recent 2025 Tariffs Report here