The Arguments on Tariff Case In SCOTUS -- Is The Hand Wringing By Conservative Legal Pundits Misplaced?
The outcome is likely to be fractured but my read is there will be 5-6 votes on an outcome upholding the tariffs, but with different reasons -- and maybe some limitations.
The case involves the use by President Trump of trade tariffs against trading partners — friends and foes alike. He has not sought Congressional approval — before or after — and he claims the right to use these powers as part of his foreign policy “tool box” to coerce foreign governments to act in ways preferred by the United States. Pursuant to the “International Emergency Economic Powers Act” (IEEPA), he’s using tariffs to address historical trade deficits that he says caused damage to the U.S. economy in several ways over the past 50 years. It does not matter whether this was recognized by previous Presidents, he is not bound by their failings.
It is worth noting that the Court did not agree to hear this case on the question of whether continuing trade deficits with trading partners is an “emergency” as contemplated by the statute. The only issue before the Court is whether authority to impose tariffs is found in the statute.
The key statutory language in IEAPP allows the President to “regulate … transactions in foreign exchange” through the use of “instructions, licenses, or otherwise.”
The fight boils down to two basic questions — 1) is “regulate” a term broad enough to include “tariffs" — not mentioned — as a mechanism to regulate; and 2) even though “tariff” does not appear in the statute, is it within the parameters of what “otherwise” was meant to include without a specific reference?
The reason there is a fight is because Article I, Sec. 8, Clause 1 of the Constitution gives to Congress the power to raise revenues.
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States; . . .
It is not a matter in dispute that the word “duties” is synonymous with a tariff on a foreign good imported into the United States. Both sides agree that the Constitutional power to tariff is expressly set forth in Article I.
The argument against the use of tariffs is that the power to impose “duties” is expressly granted to Congress in the Constitution. For the President to have this power — the Article I power of Congress — there must be an obvious delegation that Congress would have recognized as such at the time it is claimed to have been made. In this case it is the IEEPA statute passed in 1977. Both sides agree that the IEEPA replaced the “Trading With The Enemies Act” (TWEA), and granted the President “emergency powers” over trade even in peace time, but with restrictions. The use of TWEA was supposed to be limited to war time, but President Nixon imposed a world-wide tariff of 10% to address an “imbalance of payments” in 1971.
The Administration’s opponents premised nearly the entirety of their argument on the proposition that a tariff is a “tax” because it raises revenue from the citizens, and the power to take money from the citizens is exclusively reserved to the Congress. Under the “non-delegation doctrine” it is a constitutional power Congress cannot give over to the President without a clear and direct expression of its intention to do so. The fact that “tariffs” are not mentioned anywhere in the IEEPA, according to the opposition, means that the power to tariff was not part of the peacetime “emergency powers” given to the President under IEEPA.
If the Court rules against President Trump it will almost certainly be on the basis of the “Major Questions Doctrine.” The Chief Justice has long been an advocate, along with several other current members of the Court, for the use of this Doctrine to invalidate Executive branch action on the basis that the action violates Separation of Powers.
