President Trump's tariffs faced a critical legal test on Thursday ahead of his Friday deadline for new levies to kick in for U.S. trading partners. CBS News legal contributor Jessica Levinson breaks down why a group of small business owners and lawmakers are questioning the legality of the president's trade moves.

Washington

Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

Global Tariffs

A legal challenge has been brought against President Trump's use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs on countries including China, Canada, and Mexico. Five small-business owners and twelve Democratic-led states argue that the law, which has never before been used to justify tariffs, may not grant the president such authority and that Congress traditionally holds the power to regulate trade.

Judges on the federal appeals court appeared skeptical of the administration's arguments, raising questions about whether an actual emergency existed and if Congress can delegate such sweeping powers to the president. The case could set a precedent for future use of emergency powers in trade policy and may ultimately be decided by the Supreme Court. Even if the current statute is struck down, other legal avenues remain for imposing tariffs.

Breaking down the legal challenge to Trump's tariff powers

As President Trump's tariff deadline quickly approaches, his trade policy was challenged inside a Washington federal appeals court. Five small-business owners and 12 Democratic-led states are questioning whether the tariffs are legal and if Trump had the authority to enact them. He used an emergency powers law that gives presidents broad authority to regulate economic transactions with foreign countries during national emergencies to impose his levies. No president has ever invoked what's known as the International Emergency Economic Powers Act to justify the use of tariffs. But the Trump administration argues that the tariffs will help deal with trade imbalances. It's also argued that higher tariffs specifically on China, Canada, and Mexico are needed to combat fentanyl trafficking into the U.S. For more, let's bring in our CBS News legal contributor, Jessica Levinson. She's a professor at Loyola Law School in Los Angeles. Jessica, thanks for being here today. The judges on the appeals court panel appeared skeptical of the Trump administration's arguments today. We know traditionally Congress approves levies and tariffs like the ones that are being proposed now. Why was the court skeptical? So, I think we have to go all the way back to what does the Constitution say? And the Constitution says that it's Congress that has the power to regulate interstate commerce. Now, Congress can give some of that power away, as it has at times, and they can create statutes that give the president, for instance, authority to regulate commerce when it comes to specific situations. Maybe it comes to an emergency situation where you want the president to be able to impose sanctions. The question here is whether or not this particular statute that was passed in 1977, the IEEPA, whether or not it really does give the president the power if there is a question about whether or not there really is an emergency in order to levy these taxes. And then, related to that, there's a question about whether or not Congress could cede that authority to the president to impose these type of, really, sweeping tariffs. Now, it's interesting because we're also facing down this deadline for trade deals in just a few hours. How might a ruling affect what happens after midnight? So, the ruling could affect any tariffs that are justified under this particular statute, under the IEEPA. I will say that a lot of people looked at the Trump administration's campaign promises to impose tariffs and thought that they would use, that the administration would use other statutes. This particular statute, as you said, has never been used by a president to impose any type of tariffs before. So, certainly, the reason we're talking about this case is it's a big case with big impacts. If this court says, we think there's a problem using the IEEPA, then that will be true not just for the tariffs at issue here, but I believe for other tariffs as well. Okay, so it's also possible, very possible, that this ends up before the Supreme Court. But even if the high court were to rule against the president, there are still other legal avenues that the administration could pursue, right, to impose these tariffs, right? So, that's right. You could look to a different statute. I mean, obviously, the Trump administration thought that this was their best option, but you could look to a different statute. You could also ask Congress to explicitly give that authority. I think this Congress might be amenable to that. But you're exactly right to point out that this is not necessarily the end of the story. It would be, if the Supreme Court rules, the end of the story for this particular statute in these particular circumstances. Jessica Levinson, thank you so much for your analysis. Thank you. Thanks.

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Breaking down the legal challenge to Trump's tariff powers

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