After China handed him the perfect emergency argument with rare earth restrictions, Trump torpedoed his own legal defense by slapping retaliatory tariffs on Canada over a Ronald Reagan commercial. Now SCOTUS is giving both sides more time-and Trump just gave them plenty to discuss.
Just when Trump’s Supreme Court case finally had a legitimate emergency to defend-China weaponizing rare earth exports-he sabotaged his own argument by imposing retaliatory tariffs on Canada over a TV commercial.
Then it got worse: The Supreme Court just agreed to extended 80-minute oral arguments on November 5…It’s not looking good.
The Perfect Setup China Provided
Trump had threatened new 100% tariffs on Chinese goods starting November 1 in retaliation for China’s expanded export controls on rare earths-critical materials used in semiconductors, electric vehicles, and military equipment. This was precisely the type of “unusual and extraordinary threat” that the International Emergency Economic Powers Act (IEEPA) was designed to address: a genuine, acute national security crisis involving a hostile power controlling essential resources.
For once, Trump had the perfect emergency argument.
Then Came the Reagan Ad
On October 25, Trump announced an additional 10% tariff on Canada because Ontario ran a TV advertisement featuring Ronald Reagan criticizing tariffs. He terminated all trade negotiations with Canada and accused the country of trying to “illegally influence” the Supreme Court case. Trump imposed the tariff without citing specific legal authority.
Trump suggested earlier this month that he plans to attend the Supreme Court proceedings, which could be the first time a sitting president does so. The Supreme Court Historical Society confirmed there’s no record of it ever happening before. The plot thickens!!
The timing couldn’t be worse. Trump’s legal team will now have to explain for 40 minutes-double the usual time-why the president’s emergency powers are limited to genuine crises, while Trump spent the week before arguments proving they’re not.
A Pattern of Dubious “Emergencies”
The Canada episode exemplifies Trump’s elastic definition of emergency:
- After announcing a deal with Argentina, Trump made the offer conditional based on President Javier Milei, a close ally, remaining in power
- Trump imposed 50% tariffs on Brazilian goods, with President Lula scrambling to negotiate relief…all because we had a problem with their last election
- Trump warned Cambodia and Thailand he wouldn’t make trade deals if their deadly border conflict continued, then brokered their peace deal
- Trump claimed he solved India-Pakistan conflicts by threatening tariffs: “If you want to fight, that’s OK, but you’re going to pay tariffs” Don’t forget the additional hit over Russian oil purchases
Using IEEPA to broker unrelated peace deals, reward political allies, and punish TV advertisements reveals Trump views emergency powers as general-purpose foreign policy tool-exactly what Congress sought to prevent. Remember the big beautiful bill and what I argued weeks back?!
The Legal Disaster
What Emergency? Legal experts immediately asked: “Is the new 10% tariff on imports from Canada related to the fentanyl emergency or the reciprocal trade emergency or are hurt feelings also now a national emergency?” Trump originally claimed Canadian tariffs were necessary to stop fentanyl trafficking, though less than 1% of fentanyl entering the U.S. comes from Canada.
Unlimited Authority? Plaintiffs’ attorney Neal Katyal characterized Trump’s approach as a “breathtaking” power grab amounting to “the president can do whatever he wants, whenever he wants, for as long as he wants so long as he declares an emergency.” Trump just proved this correct in real-time-and now the justices will have 80 minutes to explore it.
Not “Rare and Brief”: IEEPA’s legislative history emphasized “emergencies are by their nature rare and brief, and are not to be equated with normal ongoing problems.” When Trump uses emergency powers for Chinese rare earths while conflating Brazils election, India-Pakistan tensions, Thailand-Cambodia conflicts, and Canadian TV ads, “emergency” loses all meaning.
Lower Courts Already Ruled: The U.S. Court of Appeals for the Federal Circuit ruled 7-4 that the president’s power to regulate imports under IEEPA does not include the power to impose tariffs, invoking the Supreme Court’s “major questions” doctrine requiring vast economic actions to be clearly authorized by Congress. I was betting on the administration’s side until the Reagan Ad….
The Stakes
If Trump loses, his tariffs on Canada and Mexico over fentanyl would be quashed along with “Liberation Day” tariffs, and the U.S. may have to refund billions in duties from the $200 billion in tariff revenue collected this year. Treasury officials have warned this could mean financial catastrophe. Keep in mind bi-lateral agreements remain in play…and they are rolling out quickly.
Trump had a winning hand with China’s rare earth restrictions-a genuine emergency involving a strategic adversary and critical materials. Instead, he showed the Supreme Court exactly why presidents shouldn’t have unchecked tariff authority: they’ll use it to punish allies over political advertisements, leverage third-party peace deals, and declare “emergencies” whenever convenient.
The Supreme Court clearly wants to dig deep into this case. And thanks to Trump’s Canada outburst, they now have a perfect real-world example of emergency power abuse to discuss during those extra 40 minutes. The justices asked for more time to consider whether presidents can do “whatever they want” by declaring emergencies. Trump just answered the question for them.
This is a critical ruling and if it doesn’t favor the administration expect a mad dash scramble for other mechanisms and to complete more bi-lateral deals. For supply chain leaders continue your efforts around building optionality and resilience. Call me for input and help as you build out your mitigation strategies.
