The refusal of the United States Supreme Court to issue an opinion on the consolidated cases of Trump v V.O.S. Selections, Inc. and Learning Resources, Inc. v Trump on Wednesday 14 January 2026 marks a continuation of profound legal and economic uncertainty. This inaction, following a previous non decision on 9 January, extends the commercial limbo surrounding the Reciprocal Tariffs and Trafficking Tariffs imposed by President Donald Trump throughout 2025 under the International Emergency Economic Powers Act (IEEPA). These executive actions, which leverage emergency powers to levy sweeping duties on global imports, represent the most significant expansion of presidential trade authority since the 1930s.
The Statutory and Historical Framework of the Emergency Economic Powers
The current litigation turns on the statutory and historical distinction between regulation and taxation, rooted in Congress’s effort to narrow presidential emergency powers when it replaced the Trading With the Enemy Act of 1917 with the International Emergency Economic Powers Act of 1977, confining expansive executive authority to peacetime national emergencies while preserving Congress’s exclusive power to tax under Article I, Section 8 of the U.S. Constitution. At issue is whether IEEPA’s authorization to “regulate” importation implicitly includes the power to impose tariffs, a position advanced by the administration through reliance on United States v. Yoshida International (1975), which upheld a temporary import surcharge under TWEA, and by characterizing tariffs as regulatory tools aimed at correcting trade imbalances and influencing foreign conduct, with revenue viewed as incidental. During Supreme Court oral arguments on 5 November 2025, this reasoning met sustained scrutiny, as Justice Sonia Sotomayor underscored the revenue-generating nature of the tariffs, describing them as taxes borne by American consumers rather than neutral regulatory measures, while the government, through Solicitor General D. John Sauer, argued that the authority to impose an embargo necessarily includes the lesser power to permit imports subject to a fee—a rationale encapsulated by Justice Brett Kavanaugh’s metaphor questioning why Congress would grant the President the “donut” of embargo power but deny the “hole” of tariff authority.
From the Court of International Trade to the Supreme Court
The legal challenge to the tariffs commenced in April 2025 when a coalition of plaintiffs, including V.O.S. Selections, Inc. and twelve state attorneys general, filed suit in the United States Court of International Trade, alleging that the President exceeded his authority under the International Emergency Economic Powers Act and that the delegation of open-ended tariff power violated constitutional separation-of-powers principles. On 28 May 2025, a unanimous three-judge panel of the Court of International Trade ruled in V.O.S. Selections, Inc. v. United States, granting summary judgment to the plaintiffs, holding that IEEPA does not expressly authorize the imposition of tariffs and issuing a permanent injunction against both the Reciprocal and Trafficking Tariffs. The government appealed, and given the national importance of the dispute, the United States Court of Appeals for the Federal Circuit heard the case en banc and, on 29 August 2025, affirmed the lower court’s ruling by a 7–4 majority, concluding that while IEEPA permits regulation of imports, it does not clearly delegate Congress’s taxing power and that the challenged tariffs implicated the Major Questions Doctrine. However, the Federal Circuit vacated the permanent injunction and remanded the case on remedies, allowing the tariffs to remain in force during further review. In September 2025, the administration sought certiorari, which the Supreme Court granted on 9 September 2025, consolidating V.O.S. Selections with Learning Resources, Inc. v. Trump, thereby unifying the statutory challenge under IEEPA with broader constitutional questions concerning delegation of legislative power.
Supreme Court Standoff and Constitutional Challenges
The dispute before the Supreme Court centres on two core constitutional doctrines: the Major Questions Doctrine and the Non-Delegation Doctrine. The challengers rely heavily on the Major Questions Doctrine, which holds that courts should not defer to executive interpretations of statutes on issues of vast economic and political significance unless Congress has clearly and explicitly authorised such action. They argue that the imposition of tariffs on nearly all United States imports, valued at trillions of dollars, plainly qualifies as a major question and that the vague language of IEEPA, which merely empowers the President to regulate, cannot reasonably be read to authorise such a sweeping restructuring of the national economy. During oral arguments, Chief Justice John Roberts appeared receptive to this reasoning, observing that no President had previously claimed such broad tariff-imposing authority under IEEPA and questioning whether a statute enacted in 1977 could suddenly be repurposed to justify a fundamental shift in United States trade policy. The case also tests the Non-Delegation Doctrine, which prohibits Congress from transferring its legislative powers to the Executive without an intelligible principle to guide the exercise of that power; critics argue that IEEPA provides no such principle for tariffs, as it sets no limits on rates, duration, or justifying economic conditions. Justice Neil Gorsuch focused on this concern during oral arguments, warning that upholding the tariffs could create a one-way transfer of power from Congress to the Executive and questioning whether any meaningful limits exist under the government’s theory. In response, the government’s defence rests on the text of IEEPA and historical practice, with Solicitor General Sauer arguing that the plain meaning of “regulate” has long included tariffs, quotas, and embargoes, and that the Non-Delegation Doctrine is less restrictive in matters of foreign affairs and national security. The Supreme Court’s failure to issue an opinion in January 2026 suggests deep internal divisions, raising the possibility of a fractured ruling or a procedural remand, while prolonging uncertainty for the business community as continued tariff collection drains liquidity and complicates long-term planning.
Global Trade Patterns and Geopolitical Consequences
The 2025 tariff regime has accelerated fragmentation of the global trading system by shifting the United States away from the rules-based framework of the World Trade Organisation toward bilateral transactionalism, with the Annex system enabling country-specific rates and exemptions that effectively turn tariffs into instruments of diplomatic leverage. The fallout has been widespread: the European Union has seen exporters of automobiles, luxury goods, and machinery lose U.S. market share while cautiously pursuing negotiations over retaliation; China faces sharply higher combined duties that have hastened U.S.–China supply-chain decoupling and triggered Chinese export controls on critical minerals such as gallium and germanium; Vietnam, despite expectations of benefiting from decoupling, has been hit with elevated tariffs over transshipment concerns; India has encountered new trade frictions affecting its strategic partnership with the United States; and in North America, the Trafficking Tariffs have strained the United States–Mexico–Canada Agreement by imposing duties on Canada and Mexico, disrupting regional supply chains and political relations.
The Economic Impact Assessment of Tariffs
The continuation of the tariffs into 2025 and 2026 has had measurable economic and financial effects, contributing to a rise in U.S. producer price inflation to three percent year on year in November 2025, driven by higher costs of imported intermediate goods that are increasingly being passed on to consumers, while forecasts from the Peterson Institute for International Economics project a reduction in U.S. GDP growth of approximately 0.62 percentage points in 2026 alongside a permanent upward shift in the general price level, a view echoed by Goldman Sachs, which identifies tariffs as a key economic headwind despite potential offsets from future tax cuts. The Treasury has accumulated billions of dollars in tariff revenues, with Secretary Scott Bessent stating that nearly $774 billion in cash reserves would be sufficient to fund refunds if the Court rules against the administration, though he characterized such refunds as a “corporate boondoggle,” given that firms have likely passed costs on to consumers; nevertheless, Justice Amy Coney Barrett has highlighted the immense administrative burden such refunds would impose, involving liquidation and reliquidation of entries by Customs and Border Protection over several years. Market reactions to the Supreme Court’s delayed ruling have been pronounced, with Bitcoin surging over $1,300 within 45 minutes to $96,946 as investors hedge against tariff-driven inflation and dollar debasement, while prediction markets such as Polymarket saw odds of a ruling favorable to the administration rise to 33 percent following the Court’s silence on 14 January, reflecting growing speculation that the Court may avoid sharply curtailing presidential authority, even though most traders still expect the tariffs to be limited or struck down.
The Annex II Exemption Regime
The Annex II mechanism functions as a release valve for tariff pressure by exempting selected products, allowing the administration to limit immediate economic damage while preserving broader tariff leverage. Imports of critical minerals such as graphite and nickel, which are essential for the electric vehicle battery supply chain, are largely exempt in recognition of the United States dependence on foreign sources. Pharmaceutical products are generally excluded to prevent public health disruptions, and certain energy products are also exempt to avoid politically damaging increases in gasoline and electricity prices. The authority to grant or deny Annex II status gives the Executive Branch significant influence over individual industries and companies, intensifying lobbying efforts as sectors seek to portray their products as vital to national security or the domestic economy. This has created a highly politicised trade environment in which regulatory decisions can determine the viability of entire business lines.
What can be concluded from the current prolongation of silence
The Supreme Court forthcoming decisions in Trump v V.O.S. Selections, Inc. and Learning Resources, Inc. v Trump will be a defining moment for American trade law. A ruling for the President would entrench IEEPA as a central tool of economic management, effectively shifting authority over foreign commerce from Congress to the Executive and validating the use of emergency powers for broad policy goals. A ruling against the President would reaffirm the separation of powers, invalidate the tariff regime, trigger a large refund process and force the administration to rely on more traditional trade statutes. If the tariffs are upheld, the administration is likely to expand the regime through Annex adjustments to pressure trading partners and accelerate long term shifts in global supply chains. If they are struck down, the administration will likely turn to other trade tools such as Section 301 or Section 232 actions on a slower timeline.
The Court could also issue a narrow procedural ruling that leaves the tariffs in place while extending the period of uncertainty. As supply chains remain disrupted, diplomatic tensions persist and inflation continues to burden consumers, the Court decision will shape the economic and constitutional future of the United States for decades. The continued silence therefore is not an end, but a prolongation of a crisis that lies at the heart of the constitutional order.