Supreme Court Justices Question Trump Administration on Tariffs

Summary

WSJ What’s News (PM Edition) Summary

Episode: Supreme Court Justices Question Trump Administration on Tariffs
Date: November 5, 2025
Host: Alex Osola, The Wall Street Journal

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Overview:

This episode highlights a pivotal Supreme Court case questioning President Trump’s authority to impose sweeping tariffs without Congressional approval. The discussion sets the stage for a ruling that could have far-reaching implications for presidential powers, trade policy, and the U.S. economy. The episode also covers the political fallout from recent Republican election losses, President Trump’s renewed push to end the filibuster, notable business developments, and an international controversy involving Shein in France.

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Key Discussion Points & Insights

1. Supreme Court Scrutinizes Trump’s Tariffs

• Main Case: The Supreme Court heard arguments about President Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose global tariffs unilaterally, without Congressional oversight.

  • Key Question: Does the IEEPA grant the President the power to set tariffs, which are traditionally viewed as taxes—a core Congressional power?
  • Challengers: A coalition of small businesses and states argue Trump exceeded his authority. Lower courts have sided with them.

• Justices’ Skepticism:

  • Justices, including both conservatives and liberals, expressed considerable doubt about the administration’s legal rationale.
  • Chief Justice John Roberts highlighted the constitutional separation of powers:
    • “The vehicle is imposition of taxes on Americans, and that has always been the core power of Congress. So to have the president's foreign affairs power trump that basic power for Congress seems to me to kind of at least neutralize between the two powers...” (01:59)
  • Justice Alito posed hypotheticals to test the Trump administration’s argument but appeared unconvinced.

• Correspondent Analysis:

  • Jess Bravin, WSJ Supreme Court Correspondent:
    • “Today's argument really seemed like a route for the Trump administration. From the chief justice to the newest justice, Justice Jackson, we saw a lot of skepticism about the basic claim that the president can impose these worldwide tariffs...” (02:30)
    • Reiterated that Congress’ power to tax is a founding principle, harking back to “taxation without representation” in 1776.

• Stakes:

  • If the court upholds the tariffs, it could set a precedent for presidents to unilaterally use tariffs as a negotiation tool in a wide range of disputes.
  • If overturned, it may require repayment of tens of billions in tariffs and undermine much of Trump’s trade leverage.

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2. Economic and Business Updates

• Shutdown Impacts:

  • FAA ordered a 10% reduction in airline traffic at 40 locations due to air traffic controllers working without pay during the government shutdown.

• Labor Market:

  • ADP reported 42,000 new private sector jobs in October, signaling modest labor market resilience despite the shutdown.

• Markets:

  • Stock indexes rebounded slightly, following a prior sell-off, with the NASDAQ leading.

• OpenAI Not Pursuing IPO:

  • Sarah Friar, OpenAI CFO: “We are continuing to get the company into a state of like constantly stepping up to the scale that we're at, so I don't want to get wrapped around an IPO axis hole.” (05:03)
  • OpenAI is focused on growth and development, not immediate profitability or an IPO, despite speculation.

• Entertainment Content Dispute:

  • The Motion Picture Association sent Meta a cease-and-desist over its use of “PG13” to describe Instagram’s teen content restrictions, calling Meta’s characterization “literally false and highly misleading.”

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3. Political Fallout from Election Losses & the Filibuster Fight

• Republican Setbacks:

  • GOP lost key races in NY, NJ, and VA, attributed in part to dissatisfaction with the economy and the ongoing government shutdown.
  • President Trump advocated—once again—for ending the Senate filibuster to break the legislative stalemate and “rack up policy victories” ahead of the midterms.

• WSJ White House Reporter Meredith McGraw:

  • Trump appeared “reflective” after the losses, blaming the shutdown and his absence atop the ballot for Republican underperformance. (07:46)
  • “He thinks that if they get rid of the filibuster, not only would they be able to reopen the government, but they could very quickly enact some of the things that have been on his legislative wish list, things like voter ID.” (09:25)

• GOP Resistance:

  • Republican leaders, notably Senator John Thune, remain resistant to abolishing the filibuster, lacking sufficient support within the party.
  • Legislative gridlock continues, with no progress on ending the shutdown.

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4. New NYC Mayor & Trump’s Response

• Zoran Mamdani elected as New York City’s next mayor; named former FTC Chair Lina Khan to his transition team.

  • In his speech:
    • “New Yorkers are facing twin crises in this moment, an authoritarian administration and an affordability crisis. And it'll be my job to deliver on both...” (08:34)

• Trump threatened to withhold federal funds if Mamdani won; now, the White House aims to frame Mamdani as the new face of the Democratic Party to pressure moderates.

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5. Other Noteworthy Headlines

• UPS Crash in Kentucky:
  • Cargo plane lost an engine after takeoff in Louisville, killing at least 11, with more casualties feared.
• McDonald’s Value Meals:
  • Strong sales growth attributed to value offerings amid economic uncertainty.
• Shein Controversy in France:
  • French government moves to suspend Shein’s website due to illegal products, including childlike sex dolls and weapons; Shein responds by suspending some sales and seeking dialogue.

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Memorable Quotes & Timestamps

• Chief Justice Roberts (on Congressional power to tax):
  “The vehicle is imposition of taxes on Americans, and that has always been the core power of Congress...” (01:59)

• Jess Bravin, WSJ:
  “Today's argument really seemed like a route for the Trump administration... Most of the justices were very skeptical of the Trump administration position...” (02:30)

• Sarah Friar, OpenAI CFO:
  “I don't want to get wrapped around an IPO axis hole.” (05:03)

• President Trump (via Meredith McGraw):
  “He thinks that if they get rid of the filibuster, not only would they be able to reopen the government, but they could very quickly enact ... things like voter ID.” (09:25)

• Zoran Mamdani, NYC Mayor-elect:
  “New Yorkers are facing twin crises ... an authoritarian administration and an affordability crisis. And it'll be my job to deliver on both.” (08:34)

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Timeline of Important Segments

• 00:23: Supreme Court hears Trump tariffs case
• 01:59: Chief Justice Roberts on Congressional taxing power
• 02:30: Jess Bravin’s analysis of court skepticism
• 05:03: Sarah Friar (OpenAI) on company’s IPO posture
• 06:56: Recap of GOP election losses and Trump’s push to end the filibuster
• 07:46 - 10:39: Meredith McGraw (WSJ) on Trump’s reaction and GOP filibuster debate
• 08:34: NYC Mayor-elect Mamdani’s statement
• 10:49: Updates on UPS cargo crash, McDonald’s performance, and Shein in France

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Conclusion

This episode provides a comprehensive look at high-stakes legal, political, and business developments: the challenge to Trump’s tariffs spotlights crucial issues of constitutional authority, while the aftermath of election losses underscores the deep divide in American politics over the path forward—including the future of the Senate filibuster. Business stories, including OpenAI’s future plans and international regulatory actions, round out a fast-paced, informative episode.

Transcript

[A]

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[B]

The Supreme Court hears a case that will decide the future of President Trump's tariffs.

[C]

The vehicle is imposition of taxes on Americans, and that has always been the core power of Congress.

[B]

Plus, the president's response to Democrat election victories end the filibuster and France moves to suspend Shein's website after discovering childlike sex dolls for sale on its platform. It's Wednesday, November 5th. I'm Alex Osola for the Wall Street Journal. This is the PM edition of what's News, the top headlines and business stories that move the world today. In a breaking news update, the Federal Aviation Administration says it's ordering airline traffic to be reduced by 10% in 40 locations while air traffic controllers work without pay during the government shutdown. See [e-mail] the US Supreme Court this morning heard arguments on one of the most consequential economic and political cases to come before it in decades. The nine justices are weighing whether the president sweeping global tariffs under the International Emergency Economic Powers act without congressional approval are lawful, as well as tariffs on Canada, China and Mexico related to fentanyl. The challengers, a group of small businesses and states, say he exceeded his legal powers. Lower courts have agreed, and now it's up to the Supreme Court to decide the fate of a cornerstone of the president's agenda. During the hearing today, justices on both sides of the court's ideological divide expressed skepticism about President Trump's authority to set the tariffs. This is Chief Justice John Roberts.

[C]

The vehicle is imposition of taxes on Americans, and that has always been the core power of Congress. So to have the president's foreign affairs power Trump that basic power for Congress seems to me to kind of at least neutralize between the two powers, the executive power and the legislative power.

[B]

WSJ Supreme Court correspondent Jess Bravin told us more about the justices responses.

[D]

Today's argument really seemed like a route for the Trump administration. From the chief justice to the newest justice, Justice Jackson, we saw a lot of skepticism about the basic claim that the president can impose these worldwide tariffs because this emergency economic law from the 70s allows them to regulate foreign financial transactions in an emergency. The justices just didn't buy the idea that that word carries in it the power to impose tariffs because tariffs are a tax They're a tax paid by Americans to buy products that are imported from overseas. Taxes are the basic power that Congress has. Remember taxation without representation way back when in 1776? Most of the justices were very skeptical of the Trump administration position. Some, though, of course did have serious questions for the challengers. The most notable was Justice Samuel Alito, who kept trying to raise various hypotheticals and various arguments that might be used to justify the Trump administration's position. But even he was skeptical of some of the administration's claims.

[B]

Trump has called the case, quote, literally life or death for our country. A decision upholding President Trump's authority would legitimize the use of tariffs as a cudgel to resolve trade and non economic disputes alike, and could give the President broad authority to regulate the US Economy without the involvement of Congress in any circumstance where he finds an emergency exists. But if the court overturns the tariffs, the Trump administration has warned it will need to repay tens of billions of dollars it has already collect. It would also undercut a core legal justification for a large chunk of Trump's tariffs and potentially remove leverage in trade talks. In a positive sign for the labor market, the payroll processing company ADP said today that American businesses added 42,000 jobs in October after two months of declines. Data from private sources like ADP have become more important as the government shutdown disrupts the usual stream of economic data releases. And US markets rebounded today after yesterday's sell off. The three major indexes each rose less than 1%, with the NASDAQ leading the gains. We're exclusively reporting that OpenAI says it's not working towards an IPO for now. Speaking at the Wall Street Journal's Tech Live conference, OpenAI CFO Sarah Fryer said the AI giant's conversion to a new structure to does not mean an IPO is imminent and that OpenAI is prioritizing growth and research and development over profitability.

[E]

We are continuing to get the company into a state of like constantly stepping up to the scale that we're at, so I don't want to get wrapped around an IPO axis hole.

[B]

The Wall Street Journal has reported that the company has discussed a public listing as soon as 2027. Fryer says the ChatGPT maker is on pace to generate $13 billion in revenue this year and that OpenAI is trying to find new ways to grow sales. News Corp. Owner of the Wall Street Journal, has a content licensing partnership with OpenAI and in another exclusive, the Motion Picture association, which has administered the parental guidance ratings for films for more than 50 years, is asking Meta Platforms to stop using the term PG13 for its content restriction system for teens on Instagram. A lawyer for the movie industry trade group sent Meta a cease and desist letter saying Meta's assertions that content on Instagram's teen accounts would be guided by PG13 ratings are, quote, literally false and highly misleading. Meta says it never claimed or implied that its teen accounts were officially PG13 rated or certified by the Motion Picture Association. Coming up, how President Trump is responding to Democrats electoral victories. That's after the break.

[F]

What's driving the markets this week? What's on investors minds as they look ahead? Find out on the Markets podcast from Goldman Sachs a breakdown of market moves and macro signals in 10 minutes or less. The Markets podcast from Goldman Sachs. Listen now.

[B]

As you heard from us this morning, Republicans suffered losses in key races in New York, New Jersey and Virginia during yesterday's election, a sign of voter dissatisfaction with the economy and a crack in the coalition that elected President Trump. The president's response today? Once again urging Republican senators to dump the filibuster. And at a breakfast with GOP senators at the White House this morning, the president said lowering that 60 vote threshold for passing most bills would let Republicans rack up policy victories and boost its political prospects before next year's midterm elections. The president also says terminating the filibuster is the only way to end the 36 day government shutdown that is now the longest in history. He says the shutdown is a, quote, big factor in the GOP's losses. Journal reporter Meredith McGraw joins me now to discuss. Meredith, how is Trump responding to these election results?

[G]

Well, this morning at the White House, President Trump seemed pretty reflective on the results of last night's election. He said if you look at what the pollsters said, the shutdown played a role, but also the fact that he wasn't at the top of the ticket was actually a drag on Republican candidates. And he also said that they really didn't expect there to be a lot of Republican victories last night because these races were mostly in Democratic areas.

[B]

One big winner from last night was Zoran Mamdani, who will become the next mayor of New York City. In a press conference today, Mamdani announced a transition team which includes former Federal Trade Commission Chair Lina Khan. He says his administration will address affordability as well as threats from the Trump administration.

[H]

New Yorkers are facing twin crises in this moment, an authoritarian administration and an affordability crisis. And it'll be my job to deliver on both It'll be my job to stand up for the city and also to ensure that we do not look at Washington, D.C. as if it is the reason for all of the problems right here in New York City.

[B]

So, Meredith, in the lead up to the mayoral election, Trump threatened to withhold billions in federal funds if Mamdani won. What is he saying now?

[G]

I was talking to a White House official this morning about the election postmortem, and I think they're really going to be framing Mamdani as the face of the Democratic Party and forcing more moderate Democrats to have to answer to whatever Mamdani's policies are in New York.

[B]

And yet the day after this election, Trump is pushing Republican senators to end the filibuster. Why is that?

[G]

Well, President Trump has long made the case that he thinks Republicans should end the filibuster. He thinks that if they get rid of the filibuster, not only would they be able to reopen the government, but they could very quickly enact some of the things that have been on his legislative wish list, things like voter id. And he claimed that they would be able to potentially fare better in the midterms because they'd be able to show voters what they were able to accomplish in Congress.

[B]

Is there indication that more Republicans are on board?

[G]

Republican leadership has so far resisted any calls to terminate the filibuster. Senator John Thune has been pretty clear on that from the start and has said that he doesn't think the Republicans have the votes right now for that.

[B]

Have the election results pushed the ball forward on the bipartisan negotiations in Congress to end the shutdown?

[G]

The expectation was that after Tuesday night, Democrats might put up some wins. Republicans felt that maybe they'd have some sort of opening to get them to agree on something on the Hill. But right now, it does seem like they remain in the same sort of limbo that we've been in now for weeks.

[B]

That was WSJ White house reporter Meredith McGraw. Thanks so much, Meredith.

[G]

Thank you.

[B]

We have an update on the UPS cargo plane that crashed yesterday in Louisville, Kentucky, killing at least 11 people. National transportation Safety Board officials said today that an engine detached from the plane's left wing shortly after takeoff and fell on the airfield. Local officials say several people were injured and taken to hospitals. And Kentucky Governor Andy Beshear says he expects the death toll to rise. UPS hasn't confirmed any casualties or injuries of the three person crew on its aircraft. UPS's main air cargo hub is in Louisville, where it processes millions of packages daily. McDonald's says its push into Value Meals is paying off at a time when more customers are feeling economic pressure. The burger chain says its U.S. same store sales grew by 2.4% in its most recent quarter, beating analyst expectations. The company is trying to win back cost conscious consumers and says the growth came after it increased spending on Value Meals, new products and marketing. And the French government is moving to suspend Shein's website after authorities discovered that sex dolls resembling children and weapons were being sold on the Chinese founded e commerce company's platform. The French Finance Ministry says it's giving the company 48 hours to demonstrate it has scrubbed its platform of illegal products. The Interior Ministry has separately asked a court to shut down the website. A Sheehan representative says the company has temporarily suspended sales from third party vendors on its marketplace in France and is, quote, seeking dialogue with French authorities. She and Today also opened its first ever permanent physical store in Paris, attracting both customers and protesters. And that's what's news for this Wednesday afternoon. Today's show is produced by Pierre Bienname with supervising producer Tali Arbel. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.