The U.S. Supreme Court recently heard oral arguments regarding the authority of former President Donald Trump to impose tariffs on goods from various countries using the International Emergency Economic Powers Act (IEEPA). This litigation centers on the 1977 IEEPA. It brings to the fore the current raging legal disputes over the proper balance of power between Congress and the presidency in affairs of trade.
In February, Trump had used the IEEPA to impose tariffs on imports from China, Mexico and Canada. His administration argued that the massive trade deficit posed an acute threat to national security. They contended this unique factual circumstance warranted emergency measures. Later, in April, Trump threw these tariffs wide, extending them to almost all countries, with a 10 to 50% tax.
Trump’s legal team argues that the IEEPA grants him the authority to take these tariffs actions without requiring Congress’s approval. They argue that Congress has provided the president with similar “emergency” authority. This makes it possible for him to short-circuit long legislative processes when our national security is imperiled. This vast interpretation of the IEEPA authority has alarmed judges and legal experts.
In fact, during oral argument, Chief Justice John Roberts raised concerns about the far-reaching consequences of such an interpretation. He stated, “The justification is being used for power to impose tariffs on any product from any country in any amount, for any length of time.” His comments underscored fears that a ruling in Trump’s favor would open the floodgates for future presidents. This would allow them to exercise draconian tariff authorities with no Congressional check whatsoever.
Justice Neil Gorsuch further emphasized the serious implications that such a precedent would have, pointing out the absurdity of this outcome. He queried, “What would prohibit Congress from just abdicating all responsibility to regulate foreign commerce?” This line of questioning illustrates a deeply troubling concern. Unfortunately, granting such sweeping powers to the executive branch is sure to undermine the constitutional authority that Congress should retain.
The stakes of this case go far beyond legal niceties. They include important financial implications too. According to Trump’s administration, his tariffs were a cash cow that produced tens of billions for the federal government. This revenue is nearly equal to all other tariffs collected so far this year through September. This figure is set to skyrocket to $1 trillion if the court pushes back its decision until June.
Legal experts have voiced concern that ruling against Trump’s tariff powers could expose the U.S. to “ruthless trade retaliation” from other nations, potentially leading to “ruinous economic and national security consequences.” As such, Trump’s officials have warned that a new tariff authority would upend decades’ worth of established trade partnerships.
In discussion with legal analyst Karoline Leavett, we looked at the need for thoughtful advice from Trump’s advisors about the possible consequences. She commented, “It would be imprudent of the president’s advisors not to prepare for such a situation,” emphasizing the importance of anticipating various scenarios in light of the court’s ruling.
The case concerns $90 billion in import duties already collected. Legal challenges surrounding these tariffs raise questions about their future and the precedent they set for executive power in trade matters.
On the affirmative side, the Supreme Court is presently considering this critical question percolating in the lower courts. That result would reverberate through American trade policy and executive power for many years to come.