The Supreme Court is set to hear arguments on whether President Trump can unilaterally impose tariffs on nearly every country under the 1977 International Emergency Economic Powers Act (IEEPA).

The case challenges a core part of Trump’s second-term economic agenda, with lower courts ruling that most of the tariffs exceed the president’s authority.

The tariffs, including a baseline 10% on nearly all trading partners and higher rates on China, Canada, and Mexico over trade deficits and drug trafficking, were justified by Trump as responses to national emergencies.

Several small businesses and Democratic-led states sued, arguing IEEPA does not authorize such sweeping tariff powers; appeals courts have largely sided with them while allowing collection of the tariffs to continue, CBS News has reported.

A Supreme Court ruling could set a major precedent on the limits of presidential powers in trade and national security matters.