The Supreme Court’s Complicated Takedown of Trump’s Tariffs
On Friday, President Donald Trump asked reporters at the White House to consider how “ridiculous” it was that the Supreme Court had just struck down tariffs that he’d been imposing, unilaterally and gleefully, around the world since last year. As President, he had the right “to destroy foreign countries,” Trump said. “But not the right to charge a fee—how crazy is that?” He seemed to find it crazier still that two of the Justices he’d appointed—Neil Gorsuch and Amy Coney Barrett—had joined John Roberts, the Chief Justice, and the Court’s three liberals in ruling against him. “I’m ashamed of certain members of the Court. Absolutely ashamed,” he said, and he thought their families should be embarrassed, too. The Justices who’d opposed him were “fools and lapdogs,” “very unpatriotic,” and probably under the sway of “foreign interests” and other “slimeballs.” He added that, by the time he was through, tariffs might be even higher than they are now.
That threat was not empty. Before Friday was out, Trump had announced a new ten-per-cent worldwide tariff, with exceptions for certain countries and goods, this time under a different legal authority; by Saturday, he’d raised the rate to fifteen per cent. An odd aspect of this chapter in American economic history is that there are, in fact, statutes on the books that give Presidents the power to impose meaningful tariffs. But when Trump announced his “Liberation Day” tariffs last April, he instead invoked the 1977 International Emergency Economic Powers Act, or IEEPA, a vaguely worded law that is dependent on a declaration of a national emergency. (He’d declared two emergencies, for good measure: drugs and migrants entering the United States from Canada, China, and Mexico; and a “large and persistent” trade deficit.) Some of those other, sounder tariff laws do have more time limits and require more of a process—an investigation, for example—which make them more difficult to deploy via Truth Social posts. There is additional uncertainty about the trade deals that Trump negotiated in recent months using the threat of roughly a gazillion dollars in tariffs as a stick. Trump’s tariff adventure is not over. But, going forward, he may have to pay more attention to the law.
In that sense, it wasn’t so much tariffs, per se, that the Court refused to endorse on Friday as it was legal laziness, recklessness, and a Trumpian sense that the White House is a kind of executive-power magic shop, in which the thinnest hint of permissiveness in an obscure statute can suddenly balloon into a limitless grant of permission for the President to do whatever he wants. At Trump’s press conference on Friday, a minute before he ruminated about the nation-wrecking damage he could still do—maybe with trade embargoes this time—he’d bragged about how “we don’t make the pennies anymore,” since his Treasury Department ended production of those coins last year. How could he, Trump, the slayer of pennies, possibly not have the power to impose tariffs?
The case that the Court decided, Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, was the consolidation of two lawsuits, brought by small businesses and states, challenging Trump’s use of IEEPA. IEEPA is a powerful tool; its provisions include a long list of commerce-related actions, such as imposing export restrictions and quotas, that a President can take in the case of a national emergency. The problem for Trump is that “tariffs” is not on the list. Neither are related terms, like “duties” or “customs.” The entire world-market-upsetting tariff scheme—under which, Roberts wrote in the majority decision, Trump asserted that “the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time”—was built on nothing more than the awkward placement of the word “regulate” a couple of lines away from the word “importation.” And, as Roberts stated and a six-Justice majority found, “Those words cannot bear such weight.”
Justice Elena Kagan, in a concurrence joined by Justices Sonia Sotomayor and Ketanji Brown Jackson, tallied up nine verbs in IEEPA (such as “investigate,” “block,” “direct”) and eleven objects related to foreign commerce (“acquisition,” “withdrawal,” “transfer”), meaning that there are “99 actions a President can take to address a foreign threat.” But, if the action in question, “regulate . . . importation,” really meant “impose tariffs,” it would be the “the odd man out,” in Kagan’s words, because “exactly none of the other 98 involves raising revenues.” IEEPA has been used, by various Presidents, more than seventy times, for example, to impose sanctions on Iran and Cuba; none has used it for tariffs.
This question of revenue was highly significant to the Justices, because tariffs are a kind of tax, and, in our constitutional system, the power to tax is a central aspect of Congress’s power, not the President’s. (In 2012, the statute creating Obamacare survived a major constitutional challenge because the Court decided, in a landmark decision also written by Roberts, that the individual mandate to acquire health care was a form of tax.) The presumption is that, if Congress gave the President the ability to impose tariffs, as it sometimes does, it would make it reasonably clear that it was doing so. But IEEPA does not look like any kind of a tax law. In the oral arguments for the case, D. John Sauer, Trump’s Solicitor General, tried to get around the problem by contending that Trump’s tariffs shouldn’t really be thought of as taxes at all—a position that was met with near-mockery from even some of the conservative Justices.
And Trump’s new tariffs have raised a great deal of revenue—almost two hundred billion dollars’ worth, according to an estimate by economists at the Penn-Wharton Budget Model for Reuters. But Roberts’s opinion says nothing about whether or how that money might be refunded. “While the Supreme Court’s decision was pending, hundreds of importers filed suit at the Court of International Trade, seeking refunds of the tariffs paid,” Mark Wu, a professor of international trade law at Harvard Law School, told me. “Those cases were stayed, but with the decision handed down, those cases can now proceed.” Trump, on Friday, wondered why the Court hadn’t put in a sentence telling him whether to “keep the money or don’t keep the money.” He added, “I guess it has to get litigated for the next two years.” A moment later, Trump upped that estimate to five years.
The lack of guidance on refunds may be an indication that Learning Resources, Inc. v. Trump was not a simple case for the Justices, despite the lopsided outcome. There are seven separate opinions, adding up to a hundred and seventy pages. The principal dissent, by Brett Kavanaugh—whom Trump, on Friday, thanked for “his genius”—is more than sixty pages. Justices Samuel Alito and Clarence Thomas joined Kavanaugh; Thomas also wrote a dissent in support of broad tariff powers for Presidents. And even the Justices who agree with one another are in some ways at odds. Roberts only mustered a majority for part of his opinion; midway through, the three liberals peeled off, meaning that, although there is a 6–3 majority on striking down the tariffs, there is no full consensus on the reasoning or its implications. Specifically, the liberals declined to join the section in which Roberts wrote that Trump’s tariffs are unlawful because they do not meet the demands of something called the “major questions doctrine.”
In the most general terms, the major-questions doctrine holds that government actions with great political or economic significance must be based on a clear legislative authority—rather than on oblique or confusing statutory language—and that the bigger the action is, the clearer that authority should be. Practically speaking, though, conservative Justices have cited this doctrine to disallow actions such as the Environmental Protection Agency’s attempt to push power plants to transition away from coal, in 2022 (saying that the E.P.A. had stretched the language of the Clean Air Act too far), and, in 2023, Joe Biden’s cancellation of student-loan debt (finding that he’d improperly relied on the COVID-19 national-emergency declaration to do so). Disagreements about the doctrine—and whether it is even useful—have thus become entwined with the question of what powers Congress can properly delegate to a President. Many liberals view “major questions” as little more than a fancy way for conservatives to say that they don’t like administrative agencies. (Kagan has suggested as much.) One possible response is that the Trump experience is, if nothing else, a reminder that it’s not necessarily a bad idea to place such limits on how creatively the executive branch can read a law; it was under the banner of major questions that Roberts, Barrett, and Gorsuch broke away from Trump in this case. So it’s complicated. Gorsuch’s concurrence is a forty-six-page catalogue of what he seems to regard as his colleagues’ shortcomings with relation to the major-questions doctrine. Kavanaugh, meanwhile, writes that, although he’s generally a big fan of the doctrine, he does not believe that it applies in “the foreign affairs context.” So power-plant transitions are bad, but tariffs—and any number of other things Trump might want to get up to overseas—are good.
Kagan, in her concurrence, argues that nothing like “the so-called major-questions doctrine” is required in this case—the “ordinary tools” of interpretation, such as just reading the text in context, are all that a person needs to realize that IEEPA does not authorize tariffs—which is why she and the other liberals did not sign on to the section of Roberts’s opinion concerning the doctrine. As a result, with only Barrett and Gorsuch joining Roberts on those pages, they are not part of the Court’s majority finding. In a way, that’s a pity, because that particular section contains some of his most pointed criticism of Trump’s “dizzying” use of tariffs and his claims of “unchecked,” “unbounded,” and “sweeping” powers, as well as skepticism about “emergencies.” Such language, coming from the Chief Justice and joined by two conservatives, is encouraging, especially as the Court prepares to hear additional landmark cases this term, including on Trump’s claim that he can unilaterally redefine birthright citizenship.
And yet, to read Kavanaugh’s dissent is to get an unsettling reminder of Trump’s ability to rally judges, politicians, and many voters behind him. As Kavanaugh sees it, Trump absolutely has the power to impose tariffs under IEEPA, but the Justice’s explanation for why that might be so is oddly cloudy. In a confounding footnote, he tries to establish a precedent for IEEPA tariffs by saying that Richard Nixon had used a different predecessor statute, the Trading with the Enemy Act, as a basis for global tariffs—but then adds that Nixon hadn’t initially told people that he was relying on the law, because he thought that its name might make certain countries feel bad by “suggesting that allies were enemies.” Is hiding the legal rationale for a major Presidential action supposed to be a good thing? Nixon is remembered for his phantom “secret plan” to end the Vietnam War, his illegal secret bombing of Cambodia, and the secret break-in that led to his impeachment; does Kavanaugh think that Trump should take Nixon’s supposed secret jurisprudence as some kind of model?
At the most basic level, Kavanaugh regards it as “nonsensical” that the President, who has the power to do so much under IEEPA, should not also be able to set tariffs as he pleases. But that’s not how this law, or the rule of law, works. It is the sort of thinking that gets Trump to call a Justice a genius. Perhaps, for Kavanaugh, that’s good enough. ♦