Trade attorneys tell CNBC that the looming U.S. Supreme Court ruling on President Donald Trump's tariffs could impact Trump's threats to levy new tariffs on NATO members over the issue of Greenland's sovereignty.
The tariff threats made by Trump over the weekend would likely rest on the same legal authority under the International Emergency Economic Powers Act (IEEPA) to be decided by the Supreme Court.
"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 Saturday that if a deal is not reached allowing Washington to acquire Greenland, the eight European countries would face increasing tariffs, starting at 10% on Feb. 1 and rising to 25% on June 1.
The Court's latest batch of decisions issued Tuesday morning did not include the tariffs case.
In the event that the Court overturns the tariffs, new legal measures may be need to be taken by companies from within the NATO bloc that would be in the position of having to pay the threatened tariffs. "It may still be necessary for companies that import from those countries to bring suit to enforce," continued Lowell said. But he added, "that would be a quick lawsuit since the law would be clear by the ruling."
Treasury Secretary Scott Bessent on Sunday said it's "very unlikely" that the Supreme Court will overturn President Donald Trump's use of emergency powers to impose tariffs, with a potential decision from the court looming as early as this week. Even if the administration loses, Trump officials have said that new tariffs will go into effect immediately.
If Trump's IEEPA authority were taken away, one of the measures that the administration may turn to is Section 232 of the Trade Expansion Act of 1962. Trade attorneys say the president could use the recently completed Section 232 investigation on critical minerals to levy tariffs. Greenland is a mineral-rich island that is a semi-autonomous territory of Denmark.
In the January proclamation from the White House, Trump invoked Section 232 authorities to direct the negotiation of agreements with foreign nations to "ensure the United States has adequate critical mineral supplies and to mitigate the supply chain vulnerabilities as quickly as possible."
If negotiations do not work, the proclamation states "it may be appropriate to impose import restrictions, such as tariffs, if satisfactory agreements are not reached in a timely manner."
While recent Section 232 actions from President Trump included the immediate imposition of tariffs on products, in the latest Section 232 policy on critical minerals the language states that the executive branch of the government reserves the right for the president to impose tariffs.
"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," TD Cowen analysts wrote in a recent note to clients.