This lawsuit in court this week could throw a wrench in Trump’s trade policy. Here’s what to know.

The Trump administration’s trade policy is currently facing a critical test in the federal court as it deals with the legality of its broad tariffs. The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., is set to hear oral arguments in the case of V.O.S. Selections v. Trump. The lawsuit, brought by five small business owners and 12 states, challenges President Trump’s use of the International Emergency Economic Powers Act of 1977 (IEEPA) to impose tariffs without congressional approval.

The lead plaintiff in the case, V.O.S., a wine importer based in New York, alleges harm from President Trump’s import taxes. The outcome of this case could have significant implications for the administration as it navigates trade deals with various economic partners. While a recent agreement between the U.S. and the European Union has eased tensions, deals with other key trading partners, including Canada, Mexico, South Korea, and China, are still pending.

Both sides in the V.O.S. case present compelling arguments. The plaintiffs argue that President Trump overstepped his authority by invoking IEEPA to impose tariffs, a move that has never been done by any U.S. president before. On the other hand, the White House defends the president’s actions, stating that the tariffs are necessary to protect American workers and national security.

A ruling in favor of the plaintiffs could force President Trump to seek congressional approval for imposing tariffs in the future. This case is crucial as it could shape the future of trade policy and the extent of presidential authority in implementing tariffs. The court’s decision, expected in August, may not be the final verdict, with the possibility of an appeal to the Supreme Court.

The journey of this case so far has been tumultuous, with a trade court initially striking down the tariffs only to be reinstated by a federal appeals court after the administration’s appeal. As the legal battle continues, the implications for trade policy and presidential authority remain uncertain.

This article was written by Mary Cunningham, a reporter for CBS MoneyWatch, who has a background in journalism and has previously worked with CBS News.