Trade, Power, and Precedent: The Trump Tariffs, Geopolitical Risk,and the Evolving Framework of International Trade Law

Abstract

Having recently attended an event hosted by Clifford Chance, a leading global law firm with a significant client base across the Middle East, Europe, and the United States, I gained first-hand insight into how geopolitical instability directly affects international business operations. The discussion, focused on geopolitical risk and global trade, underscored the far-reaching implications of ongoing crises — from the Ukraine war to rising tensions in the Middle East — and the resurgence of the Trump Tariffs as a central issue in international law. This article explores the constitutional validity of these tariffs, the scope of executive power in trade regulation, and the judicial oversight mechanisms shaping their legality. It argues that evolving geopolitical dynamics demand renewed scrutiny of unilateral trade actions to preserve both global stability and the rule of law.

Introduction:

In March 2018, former U.S. President Donald Trump invoked Section 232 of the Trade Expansion Act of 1962 to impose 25% and 10% tariffs on steel and aluminium imports respectively, citing national security concerns as justification, before extending them to the EU, Canada and Mexico later in June of that year of his first presidential term. [1]These measures sparked immediate international backlash, litigation, and debate over whether such unilateral executive actions were constitutionally permissible or ultra vires (beyond presidential authority). In his second term- February 2025, US President Trump restored Section 232 Tariffs. He signed proclamations (executive order) to close existing loopholes and exemptions to restore a true 25% tariff on steel and elevate the tariff from 10% to 25% on aluminium imports. Although several countries were initially exempted from these tariff measures- including Argentina, Australia, Brazil, Canada, Japan, Mexico, South Korea, the European Union, Ukraine, and the United Kingdom — an additional 10% tariff is currently imposed on top of existing US duties, fees and taxes on imports from the UK. However, steel and aluminium articles and automobiles/automobile parts, are subject to separate additional 25% tariffs. [2] This debate has since intensified amid renewed global instability. The Ukraine war disrupted supply chains and energy markets, while escalating conflicts in the Middle East have heightened global trade uncertainty. Meanwhile, tariff rhetoric has resurfaced in U.S. political discourse, amplifying concerns over protectionism and the fragility of the multilateral trading system.

At a recent Clifford Chance event on Geopolitical Risk and Trade Law, experts from government, finance, and law emphasized how geopolitical volatility and shifting trade policies profoundly influence their clients’ strategic decisions. Their observations reinforced a vital legal and policy question: how far can executive authority in trade or commerce extend before it undermines both constitutional limits and global economic order?

This article aims to analyse the legal framework, judicial interpretation, and policy implications surrounding the Trump Tariffs within the broader context of international trade law and contemporary geopolitical risk. It will argue that while national security justifications provide flexibility, they must not become instruments for unchecked economic nationalism, excessive delegation of congressional powers and misuse of executive powers.

Research Methodology

My research is chiefly doctrinal and analytical in character. I relied on:

• Primary sources: U.S. statutes (e.g. IEEPA, Trade Expansion Act of 1962, Trade Act of 1974), executive orders, and judicial opinions (e.g. V.O.S. Selections v. Trump, U.S. Court of International Trade rulings).
• Secondary sources: Congressional Research Service reports (e.g. “Congressional and Presidential Authority to Impose Import Tariffs” (2025)) Congress.gov, law review and think-tank commentary (e.g. Verfassungsblog, Cato) Verfassungsblog+1, policy analysis (CSIS) CSIS, and press reporting (e.g. Reuters on Supreme Court review) Reuters.
• Comparative and contextual references: I also surveyed the evolving global trade environment (e.g. impact of Ukraine war, Middle East tensions) and the responses of other jurisdictions or international bodies.

In approaching this material, I apply an analytical (doctrinal + policy critique) method: I interpret legal texts and case law, evaluate doctrinal consistency (e.g. with separation of powers, non-delegation, major questions doctrine), and assess the policy and business consequences in a geopolitically unstable era.

Legal Framework: Statutes, Constitutional Basis, and Delegated Authority

1. Constitutional allocation of tariff power

Under Article I, Section 8, Clause 1 & 3 of the U.S. Constitution, “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises” and to “regulate Commerce with foreign Nations.” This mirrors the founders’ understanding that tariff-setting is a legislative (Congressional) prerogative, not inherent in the executive.

Because of this, any executive power to impose tariffs must trace to a statutory delegation from Congress—not from implicit executive power alone.

2. Statutory schemes delegating tariff authority
   Over the decades Congress has enacted statutes that delegate some discrete tariff-related powers to the executive branch under conditions. Key among them:

• Section 232 of the Trade Expansion Act of 1962 empowers the President to impose restrictions (including tariffs) on imports that threaten national security, after an investigation by the Commerce Department. yeutter-institute.unl.edu+1
• Trade Act of 1974 (e.g. Section 301, Section 201) authorizes the U.S. Trade Representative to act (with limited executive discretion) in response to unfair trade practices or import surges.
• International Emergency Economic Powers Act (IEEPA, 50 U.S.C. §§ 1701 et seq.) allows the President, upon declaration of a national emergency, to regulate (including impose control over) foreign transactions and trade.

The 2025 Trump administration relies heavily on a novel and controversial use of IEEPA to impose sweeping tariffs, going beyond prior practice.[3]

3. Executive Orders in 2025 and how they invoke this authority

• On 2 April 2025, President Trump issued Executive Order 14257 titled “Regulating Imports With a Reciprocal Tariff To Rectify Trade Practices That Contribute to Large and Persistent United States Goods Trade Deficits.” This order declared a national emergency around trade deficits and imposed a 10% reciprocal tariff on all U.S imports effective at 12:01 a.m eastern daylight time on 5 April 2025.

Subsequent amendments to the order have further adjusted tariff rates for specific countries, including a 125% tariff on products from China which became effective on 9 April 2025. These two countries have been in a ‘trade war’ since US President Trump’s tariff imposition began early this year, following his January 2025 inauguration after a successful win in the 2024 election. As of now, the US has imposed a 100% tariff on Chinese imports, which would be in effect from 1 November 2025. This was in response to China’s new exports controls on rare earth minerals and other critical products. US tariffs on China of nearly 145% in some cases are on hold until November. The status of the tariffs are currently paused till that date. The White House

• Under that authority, he also issued modifications which became effective on September 8, 2025, to narrow or refine the reciprocal tariff scope and (according to a White House fact sheet) to provide procedural mechanisms for trade deals. The White House
• Earlier, Executive Order 14245 (signed on March 24, 2025) imposed a 25% tariff on all goods imported into the U.S. from any country that imports Venezuelan oil. The rationale behind this is because the Maduro regime poses an unusual and extraordinary threat to the national security and foreign policy of the United States. [4]
• The 2025 tariff regime more broadly invokes IEEPA plus residual powers under Section 232 and executive memoranda. United States Trade Representative+3Congress.gov+3Holland & Knight+3
• The Congressional Research Service (CRS) has documented that since January 2025, Trump has “increased tariffs on U.S. imports from all global partners,” relying on IEEPA and Section 232, provoking countermeasures from trading partners. gov

In sum, the 2025 regime tests the outer limits of how far a president might stretch these statutory delegations to impose broad, economy-wide tariffs under a supposed emergency rationale.

Judicial Interpretation of the U.S Courts and Emerging Litigation

1. Court of International Trade – O.S. Selections, Inc. v. Trump
   In May 2025, a three-judge panel of the U.S. Court of International Trade invalidated Trump’s so-called “Liberation Day” tariffs (imposed under IEEPA) as exceeding authority. The court found:

• The economic situation Trump cited did not constitute an “unusual and extraordinary” emergency under IEEPA.
• The scheme represented an improper exercise of legislative power by the executive branch and violated non-delegation principles.
• The tariff imposition involves a “major question” requiring clearer congressional authorization. Holland & Knight+3Wikipedia+3wilmerhale.com+3
• As a result, the court issued a nationwide permanent injunction preventing further collection of those tariffs. Wikipedia+3wilmerhale.com+3bhfs.com+3

This case stands at the frontier of contesting sweeping executive tariff power in 2025.

2. Appellate and Supreme Court review

• Following the C.I.T. ruling, US President Trump appealed to the S. Court of Appeals for the Federal Circuit. They struck down IEEPA-based tariff authority, holding that the president overstepped. SCOTUSblog+3bhfs.com+3Holland & Knight+3
• In September 2025, the U.S. Supreme Court granted review of these tariffs, consolidating Trump v. V.O.S. Selections and Learning Resources v. Trump, and has scheduled expedited oral arguments for November 2025. Reuters+2bhfs.com+2
• If the Supreme Court upholds that IEEPA cannot support expansive tariff authority, it will significantly constrain executive flexibility and reinforce constitutional separation of powers in trade. PIIE+3SCOTUSblog+3Holland & Knight+3

3. Interpretive doctrines and limits

• The “major questions doctrine” (which requires clear congressional authorization for issues of extraordinary economic or political significance) is central in many challenges. CSIS+3Holland & Knight+3SCOTUSblog+3
• Courts have also considered nondelegation concerns: delegating open-ended tariff authority to the executive raises constitutional issues unless Congress sets clear limits. Brennan Centre for Justice+3wilmerhale.com+3Holland & Knight+3
• Some judicial opinions emphasize that regulatory powers under IEEPA are not intended to cover general trade policy broadly — especially when the statute does not explicitly reference tariffs, duties, or taxes. Holland & Knight+2Verfassungsblog+2

4. Implications for business and international trade

• If the Supreme Court restrains executive tariff powers, it will inject uncertainty into the existing 2025 tariff regime, forcing recalibration of supply chains and risk assessment by businesses.
• Conversely, if the executive wins, the decision would validate sweeping future tariff actions with limited congressional review—raising stakes for constitutional checks and global responses.

Critical Analysis: Challenges, Loopholes, and Comparative Perspectives

1. Ambiguities and statutory tension

• The use of IEEPA for tariffs is novel and arguably beyond its intended design (which is more tuned to blocking transactions and financial sanctions, not sweeping import duties) Verfassungsblog+3com+3Holland & Knight+3
• The definitions of “emergency,” “unusual or extraordinary threat,” and the necessary causal nexus between the threat and trade policy are vague and malleable.
• Overlap and conflict arise between IEEPA and specialized trade statutes (e.g. Section 232), making it unclear which authority should govern particular tariff actions.

2. Practical and political constraints

• Legal challenges slow implementation, create litigation risk, and deter business investment due to uncertainty.
• Retaliation from trade partners—especially amid geopolitical conflicts—may exact steep costs in exports, diplomacy, and supply chains.
• The risk of erosion of institutional checks: executive dominance in trade policy could sideline congressional oversight and public accountability.

3. Comparative or international law lens

• Other jurisdictions (e.g. EU, WTO) typically subject trade barriers or countermeasures to procedural and judicial checks and often rely on multilateral dispute settlement.
• Under the GATT Article XXI (national security exception), parties face scrutiny on what constitutes a security justification; overbroad invocation risks WTO dispute challenges.
• In times of geopolitical crisis (e.g. Ukraine war, Middle East conflicts), the global trading system is under stress; unpredictable unilateral tariffs reduce predictability and make international cooperation harder.

Recent Developments & Geopolitical Context (2025 and beyond)

1. Tariff escalation in 2025 and trade war dynamics

• As noted, Trump’s 2025 tariff program rapidly increased average U.S. applied tariffs from 2.5 % to 27 % in just months (one of the sharpest shifts in over a century) Wikipedia.
• Key new measures include a 100 % tariff on Chinese imports announced in October 2025, stacking on existing duties in response to China’s rare earth export restrictions. Supply Chain Dive+3The Washington Post+3Politico+3
• The White House also imposed export controls on critical software simultaneously with tariff escalation. The Washington Post+1
• Reporting indicates threatened 25 % tariffs on medium and heavy-duty truck imports, effective November 2025. The Times of India
• The EU has responded by supporting affected Italian exporters in a pending U.S. pasta tariff dispute. Financial Times
• Meanwhile, the U.S. has threatened tariffs in retaliation against digital service taxes globally, targeting countries such as the UK, France, India, and others. Reuters

2. Legal pushback and public discourse

• The Supreme Court case, set for November 2025, may be the decisive moment on whether sweeping IEEPA-based tariffs survive constitutional scrutiny. Reuters+1
• Media and legal commentary widely frame the current litigation as a test of executive overreach vs. constitutional limits. SCOTUSblog+4The Atlantic+4Verfassungsblog+4
• Some lawmakers and legal scholars call for reassertion of Congressional control over trade measures rather than letting executive discretion expand unchecked. This goes against the principle of separation of powers and checks and balances. The Federalist Society+2Constitution Center+2

3. Geopolitical crosswinds

• The war in Ukraine continues to disrupt energy and commodity flows, prompting some nations to reorient trade and alliances, increasing sensitivity to tariff risk.
• Conflict in the Middle East (e.g. around oil, shipping lanes) exacerbates global supply chain fragility, making tariff unpredictability even more costly.
• For corporations operating across the U.S., Europe, and the Middle East (Clifford Chance’s significant client impact), tariff risk compounds existing geopolitical exposures, making planning and compliance substantially more complex.

Recommendations / Suggestions / Way Forward

1. Statutory reform for clarity and oversight
   Congress should tighten and clarify the conditions under which the executive may impose tariffs: define triggers, scope limits, sunset clauses, reporting obligations, and require affirmative congressional review (e.g. through fast-track disapproval).
   Such reforms would reduce ambiguity, restore a balance of powers, and strengthen legitimacy.
2. Judicial guardrails
   The Supreme Court should reaffirm that major questions (e.g. sweeping tariff regimes) require clear congressional authorization, reinforcing the major questions doctrine and nondelegation principles in the trade context.
3. Institutional checks and transparency
   The executive should adopt rigorous cost-benefit analysis, stakeholder consultation, and transparency measures (even beyond statutory mandates) to reduce arbitrary or politically driven moves.
4. International legal alignment and diplomacy
   The U.S. should reaffirm commitment to WTO norms (or successor regimes), engage in dispute settlement, and use tariff tools sparingly, to avoid weakening the multilateral system.
   In times of geopolitical crisis, coalitions (alliances of affected nations) might pre-emptively coordinate legal responses to tariff shocks.
5. Business adaptation and risk governance
   Companies should embed tariff scenario planning into their supply chain strategy—monitoring litigation, executive order trends, and geopolitical flashpoints.
   Legal advisors should factor constitutional risk into compliance and investment decisions, rather than assuming static trade rules because as we know it is incredibly unpredictable to predict.

Conclusion

The 2025 Trump tariff regime- rooted in sweeping use of emergency powers—pushes the boundaries of U.S. constitutional and trade law. The litigation now before the Supreme Court may define whether the executive can wield tariff authority unilaterally at scale or remains tethered to congressional oversight. In a geopolitically volatile era marked by war in Ukraine, instability in the Middle East, and fracturing global alliances, such clarity is urgent—not only for constitutional governance but for businesses navigating cross-border risk. Ultimately, striking a sustainable balance between responsive trade policy and rule-of-law restraint must be the goal of any forward-looking legal architecture.

Reference(S):

Primary Sources

Cases

• V.O.S. Selections, Inc v Trump (US Ct Int’l Trade 2025).
• Learning Resources v Trump (Fed Cir 2025).
• Trump v V.O.S. Selections Inc (cert granted US Sup Ct, 9 Sept 2025).

Executive Instruments

• Exec Order 14245, ‘Imposing Tariffs on Imports from Countries Importing Venezuelan Oil’ (20 March 2025).
• Exec Order 14257, ‘Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent United States Goods Trade Deficits’ (2 April 2025).
• Fact Sheet: President Donald J Trump Modifies the Scope of Reciprocal Tariffs and Establishes Procedures for Implementing Trade Deals (White House, 9 September 2025).

Legislation and Statutes

• US Constitution, art I, §§ 8(1), (3).
• Trade Expansion Act of 1962, Pub L No 87-794, 76 Stat 872, § 232.
• Trade Act of 1974, Pub L No 93-618, 88 Stat 1978, §§ 201, 301.
• International Emergency Economic Powers Act (IEEPA), 50 USC §§ 1701 et seq.

Secondary Sources

Journal Articles and Commentary

• WilmerHale, ‘What You Need to Know about the Federal Court Decisions Threatening the Trump Administration’s Tariff Agenda’ (Client Alert, 5 June 2025) https://www.wilmerhale.com/en/insights/client-alerts/20250605-what-you-need-to-know-about-the-federal-court-decisions-threatening-the-trump-administrations-tariff-agenda.
• Holland & Knight, ‘Court of Appeals Strikes Down IEEPA Tariffs, Setting the Stage for Supreme Court Review’ (Legal Update, September 2025) https://www.hklaw.com/en/insights/publications/2025/09/court-of-appeals-strikes-down-ieepa-tariffs-setting-stage.
• Verfassungsblog, ‘Trump’s Tariff Powers and the International Emergency Economic Powers Act’ (2025).
• Cato Institute, IEEPA and the Expanding Reach of Presidential Trade Powers (Policy Analysis No 952, 2025).
• CSIS, Insights: The Trump Administration’s IEEPA Tariffs – A Setback for Multilateral Trade (2025).
• Brookings Institution, ‘Why Does the Executive Branch Have So Much Power over Tariffs?’ (2024) https://www.brookings.edu/articles/why-does-the-executive-branch-have-so-much-power-over-tariffs/.
• FedSoc Blog, ‘Tariff Orders Prompt Challenges to Presidential Authority and Congressional Delegation’ (2025) https://fedsoc.org/commentary/fedsoc-blog/tariff-orders-prompt-challenges-to-presidential-authority-and-congressional-delegation.
• SCOTUS blog, ‘The Supreme Court and Trump’s Tariffs: An Explainer’ (August 2025) https://www.scotusblog.com/2025/08/the-supreme-court-and-trumps-tariffs-an-explainer/.
• The Atlantic, ‘Trump’s Tariffs and the Courts’ (Ideas Section, May 2025) https://www.theatlantic.com/ideas/archive/2025/05/trump-tariffs-court-rulings/682964/.
• Brownstein Hyatt Farber Schreck LLP, ‘The Game Is Afoot: Federal Appeals Court Strikes Down the President’s IEEPA-Based Tariffs’ (Client Alert, 2025) https://www.bhfs.com/insight/the-game-is-afoot-federal-appeals-court-strikes-down-the-presidents-ieepa-based-tariffs/.

News and Media Reports

• Reuters, ‘US Supreme Court to Decide Legality of Trump’s Tariffs’ (9 September 2025) https://www.reuters.com/legal/government/us-supreme-court-decide-legality-trumps-tariffs-2025-09-09/.
• Washington Post, ‘Trump–Xi Meeting: New 100% Tariff on Chinese Imports’ (10 October 2025) https://www.washingtonpost.com/politics/2025/10/10/trump-xi-china-meeting/.
• Times of India, ‘Donald Trump Announces 25% Tariffs on Medium-Heavy Truck Imports Effective 1 November’ (2 October 2025) https://timesofindia.indiatimes.com/business/international-business/donald-trump-tariffs-us-president-announces-25-levies-on-medium-heavy-duty-truck-imports-effective-from-november-1/articleshow/124347499.cms.

Financial Times, ‘EU Supports Italian Exporters in Pasta Tariff Dispute’ (24 September 2025) https://www.ft.com/content/8281d97a-5254-43ad-ae6c-bc5c23c05125

Reports and Official Publications

• Congressional Research Service, Congressional and Presidential Authority to Impose Import Tariffs (R48435, 2025) https://www.congress.gov/crs-product/R48435.
• Congressional Research Service, Presidential Tariff Powers under the International Emergency Economic Powers Act (R48549, 2025) https://www.congress.gov/crs-product/R48549.
• Yeutter Institute, Briefing Paper: National Security and Section 232 Tariffs (2020) https://yeutter-institute.unl.edu/sites/unl.edu.ianr.yeutter-institute/files/media/file/loftis-briefingpaper-05202019.pdf.

[1] Financial Times. (What happened when Donald Trump imposed steel tariffs in 2018)

[2] The White House. Fact Sheet: President Donald J. Trump Restores Section 232 Tariffs – The White House)

[3]UK Government. UK-US economic deal

[3] Congress.gov. (https://www.congress.gov/crs-product/R48549?utm_source=chatgpt.com)

[4] The White House. (Fact Sheet: President Donald J. Trump Imposes Tariffs on Countries Importing Venezuelan Oil – ])