Trump’s Tariffs in Trouble

Supreme Court skeptical of presidential power.

After a long and hostile oral argument, President Trump’s tariffs, predicated on the 1977 International Emergency Economic Powers Act (IEEPA), are sinking under the weight of the administration’s own arguments. Their eventual demise brightens America’s constitutional and economic future.

The cases argued on November 5th revolve around the President’s use of tariffs both to address trade deficits on “Liberation Day” last March and also to attack an alleged fentanyl crisis with tariffs on Mexico, Canada, and others. As noted by many commentators, this tariff policy springs from misunderstandings of trade deficits, profit margins, and trade wars more generally.

However, the President, as represented in his briefs before the Supreme Court, has insisted that the tariffs are essential measures “because of the trillions of dollars being paid by countries that have so badly abused us.” Over the past year, the administration has lauded the tariffs as revenue sources time and again.

This revenue-raising defense went out the door the moment Trump’s Solicitor General arrived at the Court, replaced by arguments that failed to convince the Court that one man may tax, in the words of Chief Justice Roberts, “any product from any country in any amount for any length of time.”

Right from the start, the government opened by insisting that tariffs “are not a tax,” and the administration’s use of the tariffs “are not revenue-raising.” “The fact that they raise revenue,” the government asserted, “is only incidental.” Along with the three Democratic-appointed Justices, Chief Justice Roberts and Justice Gorsuch firmly pushed back on this warped view of tariff powers. Roberts reminded the Solicitor General that tariffs ultimately result in “the imposition of taxes on Americans,” which has “always been the core power of Congress.”

Taxation by the executive, instead of a representative Congress, worried Justice Gorsuch particularly. “It does seem to me,” he said towards the argument’s close, that “the constitutional assignment of the taxing power to Congress, the power to reach into the pockets of the American people, is just different, and it’s been different since the founding and the Navigation Acts that were part of the spark of the American revolution.” Despite having to stay in their judicial lanes, the Justices also questioned the “emergency” nature of trade deficits as used by the administration as a justification for tariffs.

Justice Kagan noted the tendency of presidents to concoct emergencies, remarking: “[W]e’ve had cases recently which deal with the President’s emergency powers, and it turns out we’re in emergencies [with] everything all the time about… half the world.” Ultimately, a majority of Justices appeared unconvinced, and a decision will likely arrive in the coming weeks.

When the opinion arrives, many legal scholars predict “the tariff challengers will win.” If this prediction holds true, the Court shall have affirmed the core promise of the American Revolution—no taxation without representation—while also rescuing the country from a worsening economic outlook. Dozens of amicus, or friend-of-the-court, briefs raised the problematic reality of widespread and severe tariffs.

Writing in favor of the challengers, the US Chamber of Commerce warned that the tariffs would “cost the average American household $2,400 annually.” “The President’s tariffs,” the brief reads, “represent one of the largest tax increases in recent US history, literally trillions of dollars.”

Many other briefs echo the fundamental reality of tariffs as taxation, including a brief from the Goldwater Institute affirming that tariffs “increase costs to buyers and generate revenue for the government.”

Understanding tariffs as taxes is not a new phenomenon in American law, but the status quo throughout our history. During the runup to the American Revolution, the Colonists protested Parliament’s tariff schemes as violating the principle that taxation can only come from the people’s representatives. John Adams called this “a grand and fundamental principle of the British Constitution, that no freeman should be subjected to any tax, to which he has not given his own consent.”

Along with their general distaste for the synonymous measures of tariffs and taxes, the Colonists also resented Parliament’s attempts to delegate power to the King, as separation of powers was every bit as important as representation. When Parliament retaliated against Boston for its infamous Tea Party, it delegated to the King broad authority to decide the reopening of the harbor. Two years later, Jefferson may have recalled this example when including in the King’s misdeeds in the Declaration of Independence a charge of “cutting off our Trade with all parts of the world.”

Similar to the Colonists’ plight, the companies challenging the tariffs represent concerns that could become every American’s reality if the tariffs are upheld. Learning Resources, an educational toy company, relies on some manufacturing from China, and says tariffs have “pummeled [them] to the brink of bankruptcy.” They warn that if IEEPA is interpreted to grant the President broad tariff powers, not only will this administration force the shutdown of many small businesses, but the next President could impose even worse taxes on Americans.

“If the government wins,” said Neal Katyal, while arguing against the tariffs at oral argument, “another president could declare a climate emergency and impose huge tariffs.” When asked directly if a President could “impose a 50-percent tariff on gas-powered cars and auto parts to deal with” climate change, the Solicitor General admitted it is “very likely that that could be done, very likely.”

The Supreme Court’s likely ruling against IEEPA tariffs will do more than rescue small businesses from the brink of bankruptcy and save taxpayers thousands. A ruling for the challengers will reaffirm the revolutionary truth that no single man, no matter the “emergency,” may reach into the people’s pockets without Congress’s consent. In an era of endless “emergencies,” this decision may echo the sounds of the Boston Tea Party once again: No Taxation Without Representation.

Courtesy of FEE.org

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