Trump's tariffs get their day in court

Summary

Marketplace Morning Report — “Trump's tariffs get their day in court”

Date: November 5, 2025
Host: David Brancaccio
Length: ~10 minutes

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Episode Overview

This episode focuses on a pivotal Supreme Court hearing regarding President Trump's use of emergency powers to impose tariffs. The discussion centers on the legal debate over whether the president can leverage the International Emergency Economic Powers Act (IEEPA) for tariff policy, the resulting economic impacts, and the wider consequences for both U.S. businesses and global trade. The episode also touches on related global trade events, U.S. auto sales, and the end of federal electric vehicle (EV) subsidies under the Trump administration.

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Key Discussion Points & Insights

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1. Supreme Court Hearing on Trump’s Tariffs

[01:01 – 03:27]

• Supreme Court’s Focus:
  The Court is set to decide if the president has constitutional authority to impose tariffs under the IEEPA, which was passed in 1977.
  “The Supreme Court is set to hear arguments today on whether the president can use emergency powers to impose tariffs.”
  — David Brancaccio [01:01]

• Plaintiffs:
  The consolidated cases are brought by states and businesses, most notably an Illinois toy company, Learning Resources, which claims “punitive” tariffs have nearly bankrupted it.
  “Their business to the point of making them borderline bankrupt… it'll pay about $100 million in import taxes this year, up from around 2 million last year.”
  — Nancy Marshall Genzer [01:21]

• Legal Arguments:

  • Against Tariffs:
    • The IEEPA does not explicitly list tariffs among the president’s powers.
    • Constitutional argument: “Tariffs are taxes and only Congress has the power to tax, but it didn’t specifically delegate that power to the president.” — Nancy Marshall Genzer [02:17]
  • Government’s Position:
    • Administration asserts IEEPA confers broad emergency authority, especially in foreign affairs.
    • Trade imbalance is argued to be a national security emergency, justifying executive action.
      “Trade deficits have national security implications.” — Alden Abbott [02:47]
      “If any president has broad authority to try and advance his or her foreign affairs agenda… that certainly should include tariffs.” — Alden Abbott [03:07]

• Analysis:
  The government’s strongest argument rests on the executive branch’s traditional latitude over foreign policy, but plaintiffs have credible constitutional concerns.

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2. China Trade Expo and US–China Relations

[03:27 – 04:36]

• Context:
  China hosts a major international trade expo as the US and China observe a trade “truce” following recent talks.
  • “Big US Companies are turning out in force… as they look to increase sales in China at a moment this trade truce was declared.” — David Brancaccio [03:27]
• US Business Participation:
  • US soybean industry, Ford, GM, Boston Scientific, Qualcomm, and others are present, hoping for a return to normalized trade.
  • Chinese premier Li Qiang declares protectionist measures hurt the global economy and promises reforms for fairer trade rules.

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3. Extended US Government Shutdown

[04:36 – 05:12]

• Update:
  The current federal shutdown has now surpassed 35 days, making it the longest in US history.
• Economic Impact:
  • Key issues include pending action on the Affordable Care Act, with premiums set to rise absent intervention.

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4. Slump in US Auto Sales and End of Federal EV Subsidies

[05:43 – 08:27]

• October Sales Drop:

  • Car and truck sales decreased by 6.7% from September to October.
  • Not attributed to inflation or automaker pricing, but to the abrupt end of federal EV subsidies on October 1st. “Anyone who still wanted to get that credit tried to buy an electric vehicle. And once that expired, EV sales really fell off the table.”
    — Ben Ayres (via Mitchell Hartman) [06:22]

• Subsidies’ Effect:

  • With support, EVs hit 8% of US sales; without it, sales are expected to fall further and not rebound soon.

• Market Implications:

  • The average EV is now 16% pricier than the average new vehicle ($58,000 vs $50,000), further dampening demand.
    — Garrett Nelson, CFRA Research [06:52]
  • Automakers likely to delay investing in new EV tech and shift focus back to internal combustion vehicles.
    “Internal combustion engine vehicles retake some of that market share from EVs…”
    — Garrett Nelson [07:10]
  • Hybrid vehicle sales are booming, benefiting brands with major investments: Toyota, Honda, Ford, Hyundai/Kia. — [07:26]

• Global Trends:

  • EV sales grow notably in Europe and China.
  • Tesla faces challenges: Europe (Musk’s political unpopularity), China (competition from BYD, lower prices). “There are cheaper, better electric vehicles available on the market.”
    — Gernot Wagner [08:07]
  • BYD’s new EVs can cost as little as $10,000—far undercutting Tesla.

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Notable Quotes & Memorable Moments

• “Tariffs are taxes and only Congress has the power to tax, but it didn’t specifically delegate that power to the president.”
  — Nancy Marshall Genzer, [02:17]

• “Trade deficits have national security implications.”
  — Alden Abbott, [02:47]

• “Anyone who still wanted to get that credit tried to buy a electric vehicle. And once that expired, EV sales really fell off the table.”
  — Ben Ayres (quoted by Mitchell Hartman), [06:22]

• “The hybrid market is red hot right now. Four automakers invested very heavily now benefiting… Toyota, Honda, Ford and Hyundai Kia.”
  — Garrett Nelson, [07:26]

• “There are cheaper, better electric vehicles available on the market.”
  — Gernot Wagner, [08:07]

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Important Segment Timestamps

• [01:01 – 03:27] — Supreme Court case on Trump’s tariffs: legal arguments, business impact, administration’s position.
• [03:27 – 04:36] — US–China trade expo, major companies’ strategies, Chinese response.
• [04:36 – 05:12] — US government shutdown update and ACA implications.
• [05:43 – 08:27] — Vehicle sales data, causes for the drop, end of EV subsidies, implications for US automakers and global competition.

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Summary

This Marketplace Morning Report distills an evolving moment in US economic policy: the judicial reckoning over presidential tariff powers, the immediate reverberations for American businesses, and the intersecting thread of global trade turbulence—exemplified by China’s international expo and shifting US–China relations. Simultaneously, listeners get a snapshot of shifting consumer sentiment: the auto industry’s reaction to policy changes, the waning of EV momentum without subsidies, and the international competition heating up amidst slowing domestic sales.

For those wanting a comprehensive and clear picture of both legal and economic currents shaping early November 2025, this brief episode offers concise expert insight, practical business impact, and a look ahead at global implications.

Transcript

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[David Brancaccio]

A subset of Trump Tariffs get Their day in Court the High Court I'm David Brancaccio in Los Angeles. The Supreme Court is set to hear arguments today on whether the president can use emergency powers to impose tariffs. A series of lower courts have ruled against the president. Marketplace's Nancy Marshall Genzer will be monitoring.

[Nancy Marshall Genzer]

Today's hearing focuses on two cases the Supreme Court consolidated. They were brought by a group of states and businesses who say they're being hurt by president tariffs. Henrietta Treyes, co founder of the consulting firm Vada Partners, says one lead plaintiff is an Illinois toy company that brought its case because the tariffs are punitive and have materially hurt their business to the point of making them borderline bankrupt. The company, Learning Resources, says It'll pay about $100 million in import taxes this year, up from around 2 million last year. President Trump imposed these tariffs under the International Emergency economic powers of 1977, or IEEPA. Elizabeth Goytin is an attorney at the Brennan center for justice, which filed a friend of the court brief in support of Learning Resources. There's a long list of actions that.

[Bridget]

A president can take under ipa.

[Nancy Marshall Genzer]

That list does not include the word tariffs. Another plaintiff argument tariffs are taxes and only Congress has the power to tax, but it didn't specifically delegate that power to the president. Alden Abbott was general counsel for the Federal Trade Commission in administration. He's now at the Mercatus Center. He says the Trump administration is arguing that AIPA gives the president broad emergency powers and that the US Trade imbalance is an emergency because the trade deficits.

[Alden Abbott]

Have national security implications.

[Nancy Marshall Genzer]

The president's lawyers also say AIPA lets the president regulate trade and tariffs are part of that even if the law doesn't specifically mention them. Abbott says the administration's strongest argument is probably that Congress and the courts should keep their noses of foreign affairs.

[Alden Abbott]

If any president has broad authority to try and advance his or her foreign affairs agenda in a broad manner, and that certainly should include tariffs.

[Nancy Marshall Genzer]

Alden says Learning Resources and the other plaintiffs have a strong case, but it's not insurmountable. I'm Nancy Marshall Genser for Marketplace.

[David Brancaccio]

China's government is hosting a big trade show. China's premier said a recent surge in trade restrictions had hurt the global economy, adding that Beijing would push for reforms to international international rules. Big US Companies are turning out in force at this International Import Expo as they look to increase sales in China at a moment this trade truce was declared when the US and China presidents met last week. The BBC's Stephen McDonnell has more.

[Stephen McDonnell]

Notable amongst exhibitors is the US soybean industry, which now hopes to ramp up exports to China following commitments made when Xi Jinping met Donald Trump last week. Major American corporations are also here attempting to increase sales into China during during this period of trade war detente. Car brands Ford and General Motors, tech companies like Boston Scientific as well as semiconductor producer Qualcomm all have a presence at the expo. When Premier Li Chung launched the event today, he spoke of the severe impact which protectionist measures have had on the global economy recently, but said Beijing would work to make trade rules fairer, more reasonable and transparent.

[David Brancaccio]

BBC's China correspondent Stephen McDonnell it is now the longest US federal government shutdown in history, 35 complete days going into the 36th. Among key issues, the future of the Affordable Care act premium set to shoot upward without action.

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[David Brancaccio]

Using fresh calculations from Auto Data and Wards Intelligence Car and truck sales are down 6.7% September to October. This is a reading on Consumer Sentiment Marketplaces. Mitchell Hartman reports.

[Mitchell Hartman]

Motor vehicle sales didn't fall into a pothole in October because consumers are tapped out from inflation or because automakers have jacked up prices because of tariffs. Instead, it's all about federal subsidies for electric vehicles, or EVs. They've been in place for years until the Trump administration canceled them beginning October 1st. So says nationwide economist Ben Ayres, August.

[Alden Abbott]

And September, anyone who still wanted to get that credit tried to buy a electric vehicle. And once that expired, EV sales really fell off the table.

[Mitchell Hartman]

With federal subsidies, EVs reached about 8% of overall sales in the U.S. drivers like them, environmentalists like them. But with subsidies gone, EV sales aren't likely to fully rebound for months or years, says Garrett Nelson at CFRA Research. For just one reason, cost.

[Alden Abbott]

The average EV is 16% more expensive. So if you look at September, about $58,000. The average new vehicle cost about 50,000, which was record high.

[Mitchell Hartman]

And now with federal support for EVs gone, automakers aren't likely to invest in new technology and production.

[Alden Abbott]

Instead, Nelson says, we're expecting to see internal combustion engine vehicles retake some of that market share from EVs that they had lost over the last few years.

[Mitchell Hartman]

Gas electric hybrids, meanwhile, aren't affected by the end of federal EV subsidies.

[Alden Abbott]

The hybrid market is red hot right now. Four automakers invested very heavily now benefiting from that in terms of market share gains. Toyota, Honda, Ford and Hyundai Kia.

[Mitchell Hartman]

EV sales are still growing strongly abroad, especially in Europe and China. Tesla is the only major US based auto company making a significant play in those markets. But lately it's been struggling. Sales in Europe have fallen sharply, partly because of Elon Musk's political unpopularity there, says Columbia Business School climate economist Gernot Wagner. He says in China, Tesla's problem isn't politics, it's prices.

[Alden Abbott]

There Are cheaper, better electric vehicles available on the market?

[Mitchell Hartman]

Tesla's fiercest competitor, Chinese automaker BYD, sells new EVs for as little as $10,000, just a fraction of the cost of a new Tesla. I'm Mitchell Hartman for Marketplace and after.

[David Brancaccio]

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Hey everyone, it's Bridget, host of Million Bazillion, a podcast from Marketplace. You've probably heard about the government shutdown, but if you're anything like our young caller Esme, whose dad is a federal worker, you might still have questions.

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