By Andrew Chung
(Reuters) – President Donald Trump’s global tariffs and his bid to oust Federal Reserve Governor Lisa Cook, unprecedented assertions of executive power that underlie his economic policy, are now in the hands of the U.S. Supreme Court, which will decide how far he can go to reshape and control the levers of the economy.
In the span of just over a week, the top U.S. judicial body has before it two high-stakes battles with major implications for both the court and the Republican president.
On Thursday, Trump’s administration filed a request asking the court to lift a federal judge’s order that blocked him from removing Cook, a move without precedent since the central bank’s founding in 1913. Cook is an appointee of Trump’s Democratic predecessor Joe Biden.
On September 9, the court agreed to decide whether Trump overstepped his authority in imposing most of his sweeping tariffs on imports by using a law that gives a president the power to deal with “an unusual and extraordinary threat” amid a national emergency.
The 1977 law known as the International Emergency Economic Powers Act, or IEEPA, historically had been used for imposing sanctions on enemies or freezing their assets. Prior to Trump, it had never been used to impose tariffs.
“Since President Trump took office for his second term, we’ve seen Supreme Court opinions and orders that expand the power of the executive. The tariffs case and the Federal Reserve case ask the Supreme Court to go significantly farther,” said Sarah Konsky, director of the University of Chicago Law School’s Supreme Court and Appellate Clinic.
“If the Supreme Court agrees with President Trump’s position in either or both of these cases, that would be an even more dramatic expansion of executive power,” Konsky said.
The court, whose 6-3 conservative majority includes three justices appointed by Trump during his first term in office, opens its next nine-month term on October 6. It could move quickly on the Justice Department’s request concerning Cook within days or weeks, depending on the type of action it takes. The court has fast-tracked the tariffs case, announcing on Thursday that it will hear arguments on November 5.
LEGAL BOUNDARIES
The consequences of the court’s actions in these cases are major for the nation’s economy and monetary policy, with potentially hundreds of billions of dollars in tariffs on imports, along with the independence of the central bank, at issue.
Trump, since returning to office in January, has tested legal boundaries in pursuing numerous unilateral actions to reshape the federal government, crack down on immigration, end diversity programs and target perceived enemies.
Many of his contentious policies have been challenged in court, and lower courts have issued multiple rulings impeding Trump’s agenda. But Trump has fared well at the Supreme Court, which he has repeatedly asked to intervene in such cases. The court has granted his administration’s requests to let Trump’s policies proceed while legal challenges play out in nearly every case it has been asked to review this year.
Whether the pillars of his economic agenda meet a similar fate is an open question.
“He certainly wants to assert sweeping power in both of these areas. We’ll see what the court has to say about that,” George Mason University law professor Ilya Somin said.
“He is laying claim to sweeping executive powers that it would be dangerous for any one man to have,” added Somin, who is involved in the challenge to Trump’s tariffs.
Granting the president such powers would “undermine the rule of law and stable expectations that are necessary for an effective economic system to function,” Somin added.
Trump’s bid to fire Cook is based on his claims that she committed mortgage fraud before taking office, which she denies. Cook, the first Black woman to serve as a Fed governor, has said that the claims were a pretext to fire her for her monetary policy stance and that such allegations do not give the president the legal authority to remove her.
Congress included provisions in the 1913 law that created the Fed to shield the central bank from political interference. Under that law, Fed governors may be removed by a president only “for cause,” though the law does not define the term nor establish procedures for removal. No president has ever removed a Fed governor, and the law has never been tested in court.
TRUMP’S TARIFFS AGENDA
Trump in April invoked IEEPA in imposing tariffs on goods imported from individual countries to address trade deficits, as well as separate tariffs announced in February as economic leverage on China, Canada and Mexico to curb the trafficking of fentanyl and illicit drugs into the United States.
The global trade war instigated by Trump has alienated trading partners, increased volatility in financial markets and fueled global economic uncertainty. Trump has used the levies to renegotiate trade deals, extract concessions and exert political pressure on other countries.
Robert Luther III, also a George Mason University law professor, said the president has the power to direct U.S. economic policy and he expects the Supreme Court to agree with Trump both on tariffs and in firing Cook.
“President Trump has made clear that his tariff policy is at the heart of his economic policy. If the Supreme Court rips one pillar out of that foundation, the building will collapse,” Luther said.
(Reporting by Andrew Chung; Editing by Will Dunham)
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