Several members of the court’s conservative majority, including Justice Amy Coney Barrett and Justice Neil M. Gorsuch, joined the liberal justices in sharply questioning the government’s lead counsel in the case, Solicitor General D. John Sauer.
“Is it your contention that every country needed to be tariffed because of threats to the defense and industrial base?” Barrett asked. “I mean, Spain? France? I mean, I could see it with some countries, but explain to me why, as many countries needed to be subject to the reciprocal tariff policy as are.”
The tariffs were being challenged by a dozen states, along with a wine importer and an educational toy manufacturer. Hundreds of small businesses separately joined amicus filings that call Trump’s actions unlawful, saying the tariffs have forced them to raise prices and reduce staffing.
President Trump has claimed he has the authority to impose tariffs under the 1977 International Emergency Economic Powers Act (IEEPA), which grants the executive authority to “regulate” the “importation” of goods from foreign powers or individuals in response to an “unusual and extraordinary threat” to national security, foreign policy, or the economy.
The challengers argue the tariffs are a form of taxation, which only Congress has authority to impose, and that the IEEPA statute does not include the words “taxes,” “tariffs” or “duties.”
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Sauer argued Wednesday that the case is not about the power to tax but the power to conduct foreign affairs. “I can’t say it enough, it is a regulatory tariff, not a tax,” he said.
Chief Justice John Roberts was also skeptical of Sauer’s argument. The tariffs were an “imposition of taxes on Americans and that has always been the core power of Congress,” he said.
The case has been closely watched on Wall Street and investors reacted to the tenor of Wednesday’s oral argument, sending the Dow up by 300 points in midday trading. The S&P and Nasdaq also rose on the day.
What PYMNTS Intelligence’s Certainty Report Says About Tariffs
Consumers and Main Street: PYMNTS Intelligence’s survey of 2,291 U.S. consumers and 560 SMBs finds that tariff expectations have immediate demand-side consequences. Among consumers who say they understand the proposed levies, 57% expect the tariffs to hit their wallets; 78% anticipate higher prices and 75% foresee product shortages. Nearly 7 in 10 say tariffs would reduce their purchasing power, and 48.6% say they would shift from spending to saving if the levies land as described, which is a direct headwind to discretionary spending. SMBs, meanwhile, are split: Roughly half see an opening to “buy domestic,” yet only 26% list raising prices as their first response, with many small retailers preferring to drop hard-to-source SKUs rather than hike prices out of the gate.
Middle‑market operators (heads of payments): In PYMNTS Intelligence’s Certainty Project installment fielded in March, more than half of goods‑sector executives said tariffs would be negative for their firms. Nine in 10 expect delays/shortages and higher input costs; planned responses include renegotiating supplier pricing (63%), shifting to domestic providers (53%) and stockpiling inventory (37%) before new levies kick in — all of which carry implications for credit lines, cash‑conversion cycles and supplier payments.
CFO read‑out: In the October Data Book, three‑quarters of CFOs reported raising prices over the past year, yet 6 in 10 still saw margins decline — a signal that pass-through is hitting limits. Among globally exposed firms, 93% report supplier price increases; 83% of high‑regulatory‑uncertainty firms say that uncertainty has produced operational disruptions. High‑uncertainty companies estimate the “cost of uncertainty” at 6% of revenue (about 3% across the full sample). More than half of CFOs say an “America First” trade stance would hurt the U.S. economy, rising to ~80% among firms most reliant on international suppliers.
How firms are already adapting: The September Certainty Monitor shows the shift from planning to action. 100% of goods‑sector firms have taken at least one step to respond to new import tariffs; the most common moves are raising prices (29%), renegotiating with suppliers (21%), discontinuing tariff‑affected SKUs (18%) and building domestic supply (14%). Even so, roughly 6 in 10 report margin pressure, underscoring limits to price‑led mitigation.
Why it matters for banks and payments: Across these cohorts, the through line is tighter working capital management, more supplier renegotiation and an elevated need for flexible settlement terms, inventory financing and hedging, which are areas where lenders and payment providers will see increased demand as clients rewire sourcing and pricing strategies under persistent policy risk. The May installment, for example, shows heads of payments bracing for supply‑chain strain while planning to push back on suppliers — a setup that typically increases use of revolving credit, trade credit and dynamic discounting programs.
