WASHINGTON — A federal appeals panel on Thursday appeared sceptical of US President Donald Trump’s argument that a 1977 law historically used for sanctioning enemies or freezing their assets gave him the power to impose tariffs.

Regardless of how the court rules, the litigation is almost certainly headed to the US Supreme Court

Here is what you need to know about the dispute, which Trump has called “America’s big case,” and how it is likely to play out in the months ahead.

The litigation challenges the tariffs Trump imposed on a broad range of US trading partners in April, as well as tariffs imposed in February against China, Canada and Mexico.

It centres around Trump’s use of the International Emergency Economic Powers Act (IEEPA), which gives the president the power to address “unusual and extraordinary” threats during national emergencies. Trump has said that trade imbalances, declining manufacturing power and the cross-border flow of drugs justified the tariffs under IEEPA.

A dozen Democratic-led states and five small US businesses challenging the tariffs argue that IEEPA does not cover tariffs and that the US Constitution grants Congress, not the president, authority over tariffs and other taxes.

A loss for Trump would also undermine the latest round of sweeping tariffs on dozens of countries that he unveiled late Thursday.

Trump has made tariffs a cornerstone of his economic plan, arguing they will promote domestic manufacturing and substitute for income taxes.