Court Blocks Trump Tariffs – Battle Ensues

Who’s calling the shots?

A federal court has halted President Donald Trump’s tariffs, delivering a major blow to his efforts to restructure global business affairs. The little-known US Court of International Trade ruled yesterday, May 28, that 47’s across-the-board imposition of tariffs exceeded his authority as president and gave the White House ten days to roll back the measures it deemed illegal. While challenges to the three-judge decision will soon come, the global realignment is, for now, stymied.

Whose Authority Is It Anyway?

“The Constitution assigns Congress the exclusive powers to ‘lay and collect Taxes, Duties, Imposts and Excises,’ and to ‘regulate Commerce with foreign Nations,’” the court opinion reads. At issue in the two cases presented (one from a group of five businesses and the other from a collection of 12 Democrat-led states) is whether the president of the United States has the right to apply tariffs using the International Emergency Economic Powers Act of 1977 (IEEPA).

Trump unilaterally imposed tariffs using this act on the basis that massive trade deficits are an emergency and that, as such, he has the right to solve the turmoil through economic tools. The judges disagreed, writing:

“The court holds for the foregoing reasons that IEEPA does not authorize any of the Worldwide, Retaliatory, or Trafficking Tariff Orders. The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs … The Trafficking Tariffs fail because they do not deal with the threats set forth in those orders.”

The decision applies not only to the 10% tariffs Trump levied on all countries but also to tariffs applied to Mexico and Canada, which the president was using as leverage to stop the flow of illegal drugs. The court said such actions do not “deal with an unusual and extraordinary threat.”

Tariff Deals and Trade Wars

White House spokesman Kush Desai detailed the administration’s response, saying:

“Foreign countries’ nonreciprocal treatment of the United States has fueled America’s historic and persistent trade deficits … These deficits have created a national emergency that has decimated American communities, left our workers behind, and weakened our defense industrial base – facts that the court did not dispute.”

“It is not for unelected judges to decide how to properly address a national emergency,” Desai stated. And it is this phrase that will almost certainly be tested in the US Supreme Court.

While it is true that Congress has the power to levy taxes and tariffs, it has also granted the president (any president) the authority to impose tariffs in cases of national emergency. Beginning with the Trade Act of 1930 – also known as the Smoot-Hawley – an effort was made to grant the president more authority in this area. As the Brookings Institution details, “The RTAA [the Reciprocal Trade Agreements Act of 1934] authorized the president to negotiate bilateral, reciprocal trade agreements and to proclaim limited adjustments to tariff rates without congressional action.” And from there, more and more powers were passed to the executive.

The Trade Expansion Act of 1962, specifically Section 232, gave the president the power to impose tariffs and other restrictions on trade if certain imports were deemed a threat to national security. Section 201 of the 1974 Trade Act went further and permitted the commander-in-chief to protect US industries from damaging import surges.

All this to say that if there is an emergency situation, the president is well within his authority, and there’s the rub.

Emergency in the Eye of the Beholder?

When this case inevitably reaches the Supreme Court – likely sooner rather than later – the most probable question presented will be who has the ultimate right to say something is an “emergency.” Congress is hopelessly divided, and a split decision on whether an emergency is taking place is less than optimal. The job of the courts is not to define an emergency but to interpret the law. So that leaves the third branch of government.

It’s worth noting that since his “Liberation Day” announcement, both opposition politicians and the national press have neglected to make the case that the tariffs were illegally imposed. They have jointly argued that such levies were ill-thought and damaging and have even gone so far as to declare them economically destructive. But until this court ruling, the case has not been rigorously presented that the tariffs were, in essence, illegal.

For now, the dozens of trade negotiations taking place around the world will almost certainly be, at best, put on hold or, at worst, scrapped, seeding further chaos. Should Trump’s appeal fail, it will be left to Congress to say whether the president was right about this being an emergency. And yet, one might speculate that if the president of the United States is not permitted to determine what constitutes a national emergency, then no one is.

Dig Deeper into the Themes Discussed in this Article!

Liberty Vault: The Constitution of the United States