The pending decision from the U.S. Supreme Court on President Donald Trump’s use of tariff authority could directly affect his recent threats to impose tariffs on NATO members tied to the issue of Greenland’s sovereignty, according to trade attorneys who spoke with CNBC. The ruling, which could be issued as early as this week, centers on the legality of tariffs imposed under the International Emergency Economic Powers Act, known as IEEPA, and would likely determine whether similar future tariff threats could stand.
Attorneys noted that the tariff threats Trump issued over the weekend would likely rely on the same legal foundation as earlier tariffs imposed under IEEPA. The Supreme Court’s review of that authority will decide whether the president has the power to impose such measures. If the court finds that IEEPA does not authorize tariff actions, the Greenland-related tariff threats could be invalidated as well.
“Although the president hasn’t specified if these tariffs would be IEEPA-based, the U.S. Supreme Court decision on IEEPA would likely affect the outcome of the threatened Greenland tariffs,” said Michael Lowell, partner and chair of the Global Regulatory Enforcement Group at Reed Smith.
“Similar to the Brazil tariffs; if the Supreme Court rules IEEPA doesn’t give the president tariff power, then these tariffs being threatened on NATO members would be illegal,” Lowell said.
Trump announced on Saturday that if negotiations fail to allow Washington to acquire Greenland, eight European countries would face escalating tariffs. Under the proposal, tariffs would begin at 10% on Feb. 1 and rise to 25% by June 1. Greenland is a semi-autonomous territory of Denmark and is strategically significant due to its mineral resources.
The Supreme Court’s most recent set of opinions, released Tuesday morning, did not include a decision on the tariffs case, leaving uncertainty over the administration’s authority in the meantime.
According to Lowell, even if the court overturns the tariffs, enforcement would likely require legal action from affected importers. “If the court overturns the tariffs, ‘it may still be necessary for companies that import from those countries to bring suit to enforce,’” he said. However, he added that “that would be a quick lawsuit since the law would be clear by the ruling.”
Treasury Secretary Scott Bessent said Sunday that it is “very unlikely” the Supreme Court will overturn Trump’s use of emergency powers to impose tariffs. Administration officials have also indicated that even if the government loses the case, new tariffs would be implemented immediately.
Alternative Legal Paths for Tariffs
Trade attorneys say the administration could rely on another mechanism if IEEPA authority is limited. One option is Section 232 of the Trade Expansion Act of 1962. Under this provision, the president can impose tariffs on imports deemed a threat to national security. Attorneys pointed to a recently completed Section 232 investigation into critical minerals as a potential basis for new tariffs. Greenland is known to be rich in minerals that are considered strategically important.
In a Jan. 14 proclamation, Trump invoked Section 232 authority to direct negotiations with foreign nations to “ensure the United States has adequate critical mineral supplies and to mitigate the supply chain vulnerabilities as quickly as possible.” The proclamation further states that if negotiations fail, “it may be appropriate to impose import restrictions, such as tariffs, if satisfactory agreements are not reached in a timely manner.”
While some past Section 232 actions under Trump resulted in immediate tariffs, the latest policy language on critical minerals emphasizes that the executive branch reserves the president’s right to impose tariffs rather than mandating them automatically.
“Regardless of the IEEPA outcome, Section 232 remains a powerful and unaffected tool that the administration will likely continue to deploy for additional tariffs. Importantly, we note that these tariffs do not stack on top of IEEPA tariffs,” analysts at TD Cowen wrote in a recent note to clients.
Supreme Court Decision and Greenland Tariff Uncertainty
As the Supreme Court considers the scope of presidential tariff authority, Trump’s proposed tariffs linked to Greenland remain uncertain. The court’s ruling on IEEPA is expected to clarify whether such actions can proceed under emergency powers or whether the administration will need to rely on alternative trade laws to pursue its objectives.
