Nik Holm, chief executive of Terry Precision Cycling in Vermont, feared his company might not survive when the Trump administration broadened tariffs on a wide range of foreign goods. This week, that fear is before the nation’s highest court as the Supreme Court hears a challenge from small businesses arguing that the president exceeded his authority in imposing tariffs that ripple through global supply chains.

The legal fight targets a suite of tariffs introduced beginning in 2018, when the administration levied 25 percent duties on steel and 10 percent on aluminum and later escalated tariffs on hundreds of billions of dollars of Chinese imports under Section 301 of the Trade Act. The measures, which applied to imports from many countries, raised input costs for manufacturers and retailers and prompted retaliatory duties from trading partners, disrupting established trading relationships.

For companies like Terry Precision, which operate on thin margins, the immediate effect was higher costs for materials and finished goods. Those cost increases are generally borne partly by firms and partly passed through to consumers. Economists widely agree that tariffs act like a tax on domestic users of imported goods, raising prices and altering sourcing decisions. In aggregate, the tariffs contributed to dislocations in industries that rely on global trade, from metals and machinery to consumer apparel.

Beyond the pocketbook effects, the case turns on constitutional and statutory questions about who gets to set trade policy. At stake is whether presidents may unilaterally impose sweeping trade barriers without clear new authorization from Congress, or whether such powers must be tightly constrained. A ruling that limits executive authority would force Congress to take a more active role in crafting trade remedies, potentially creating greater legislative accountability but also more political gridlock. A decision upholding broad presidential authority would reinforce a model of flexible, rapid executive action in the face of international competition and national-security claims.

Market participants are watching closely because the legal precedent will influence how companies plan supply chains and hedge exposure to trade policy. If the court narrows presidential power, businesses may gain predictability through clearer, legislatively prescribed rules, but they could also face longer periods of uncertainty while Congress debates new laws. If the executive branch keeps wide latitude, administrations could more readily use tariffs as a bargaining tool, heightening the risk that firms must continually adjust sourcing and pricing strategies in response to shifting trade measures.

Longer-term implications extend to the architecture of global trade. The Trump-era tariffs accelerated a trend toward regionalization and diversification of supply chains as firms sought to reduce vulnerability to U.S.-imposed duties and foreign retaliation. A Supreme Court decision that reins in unilateral tariff authority could temper that momentum by reducing the likelihood of sudden, large-scale duties. Conversely, a ruling that affirms executive breadth could cement a more transactional and politicized era of trade policy, with consequences for investment, prices and U.S. competitiveness.

For now, Terry Precision and other plaintiffs are asking the court to determine how much weight the president may carry in reshaping the economic terms of global commerce — a legal question with immediate, practical consequences for small manufacturers and the millions of consumers who buy what they make.