The Weaknesses in the Trump Tariff Rulings
The tariffs may be awful but two federal courts did not persuasively show that they are unlawful.
Please click here to opt in to receive via email our Roundup—brief daily summaries of news developments and commentary related to executive power.
On Wednesday, the U.S. Court of International Trade (CIT) ruled that the International Emergency Economic Powers Act (IEEPA) did not authorize President Trump’s sprawling tariff policies and permanently enjoined them. On Thursday a federal district court in the District of Columbia reached the same conclusion about IEEPA for different reasons, and issued a preliminary injunction.
Before these rulings, I disagreed with most of the commentary on Trump’s IEEPA sanctions and thought that the legal issues here were hard and close. Neither ruling convinced me otherwise. In what follows I explain why, though I must be necessarily selective in addressing complicated opinions chock full of technical arguments.
As I explain in the end, I think the lawfulness of Trump’s IEEPA tariffs depends a lot on the proper application of the major questions doctrine (MQD) that both the CIT and the district court under-examined. Indeed, I think the MQD will be the central issue before the Supreme Court when these cases reach it. A reader in a hurry might skip the long intervening statutory interpretation technicalities and go directly to the more interesting and to my mind consequential analysis of the MQD’s relevance at the end of this piece.
The Case for Trump’s Tariffs Under IEEPA
IEEPA grants the president a number of emergency authorities, one of which is the authority to “regulate . . . importation . . . of . . . any property in which any foreign country or a national thereof has any interest by any person.” It further provides that the president may exercise this authority “to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.”
President Trump has imposed a number of duties on imports under IEEPA. The CIT breaks them into two categories. First, in executive actions since January, Trump has cited threats abroad from drug cartels, traffickers, terrorists, and criminal networks to impose changing import duties on goods from Mexico, Canada, and China. The CIT called these “Trafficking Tariffs.” Second, in different orders beginning in April, Trump cited foreign threats that caused global trade imbalances and imposed a 10 percent duty on all imports from all trading partners, country-specific higher rates (up to 50 percent) for 57 nations, and changing import duties on China. The CIT called these “Worldwide and Retaliatory Tariffs.”
On their face, these duties on imports “regulate . . . importation . . . of . . . any property in which any foreign country or a national thereof has any interest by any person” under IEEPA. Moreover, the president determined that the import duties dealt with an “unusual and extraordinary threat” to the national security and economy of the United States that had sources “outside the United States.” That is the simple but powerful textual case for the Trump IEEPA tariffs.
The textual argument finds support in the predecessor statute to IEEPA, the Trading With the Enemy Act (TWEA). TWEA, like IEEPA, authorized the president in an emergency to “regulate . . . importation . . . of . . . any property in which any foreign country or a national thereof has any interest, by any person.” In 1971, President Nixon, in order to address a balance-of-payments deficit, invoked this provision to impose a very broad 10 percent import duty. The United States Court of Customs and Patent Appeals (CCPA), in United States v. Yoshida, upheld Nixon’s duties under TWEA. While IEEPA later modified and in some respects sought to narrow TWEA, it retained the “regulate . . . importation” language on which Nixon and the CCPA relied.
The CIT’s View
I will skip over the CIT’s standing and political question doctrine analysis, which I think is basically right. I will also ignore the ways in which the CIT failed to apply the proper test for permanent injunctive relief against the government. I will focus solely on the merits of the IEEPA analysis.
Worldwide and Retaliatory Tariffs
The CIT ruled that IEEPA’s authorization to the president to “regulate . . . importation” does not “authorize the President to impose unbounded tariffs,” and that the Worldwide and Retaliatory Tariffs were “unbounded” since they “lack any identifiable limits.”
The Trump actions under IEEPA are aggressive and imply an extremely broad power to impose hugely consequential tariffs. But the administration did not claim an unbounded or limitless power. Rather, it argued (and the CIT did not deny) that the Worldwide and Retaliatory Tariffs complied with IEEPA’s substantive and procedural requirements. The CIT never really explained why tariffs that met these requirements were “unbounded.” And they weren’t. The Trump administration did not, for example, assert an authority to issue IEEPA import duties in non-emergency or non-threat situations or to respond with tariffs to threats with wholly domestic sources.
The CIT made two additional arguments against the legality of the Worldwide and Retaliatory tariffs under IEEPA. First, it noted that Congress in IEEPA sought to narrow the TWEA delegation to the president. Yes, that was the conventional wisdom in 1977. But it has long been known, for reasons I will not rehearse here, that Congress basically failed in that endeavor. And in any event Congress maintained rather than narrowed the pertinent “regulate . . . importation” language.
Second, the CIT noted that Congress in 1974 in response to the Nixon TWEA import duties enacted the Trade Act to govern responses to balance-of-payments deficits. The court concluded that the act “removes the President’s power to impose remedies in response to . . . trade deficits . . . from the broader powers granted to a president during a national emergency under IEEPA by establishing an explicit non-emergency statute with greater limitations.” I don’t think this follows. The Trade Act authority to deal with trade deficits does not purport to be the exclusive avenue for such regulation. Congress three years after the Trade Act expressly maintained a presidential emergency power, with different procedural prerequisites and substantive ends, to regulate importation.
The Court said in passing that the nondelegation doctrine and the MQD “provide useful tools for the court to interpret statutes so as to avoid constitutional problems,” and concluded that “any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional.” This was not a serious analysis. As mentioned, no one claims that IEEPA delegates unlimited tariff authority, and the court never grappled with the governing “intelligible principle” standard for unconstitutional delegations, which lower courts have uniformly said that IEEPA satisfies. The court was equally casual with its MQD analysis, and so I will address the relevance of the MQD to IEEPA tariffs below in connection with the more serious district court reliance on the doctrine.
Trafficking Tariffs
The CIT invalidated the Trafficking Tariffs because they do not “deal with an unusual and extraordinary threat” within the meaning of IEEPA (emphasis added). The government argued that IEEPA permits the president to “deal with” the crisis by creating leverage against the countries targeted by the tariffs. The court rejected this view on the ground—unsupported by citation or convincing explanation—that “‘[d]eal with’ connotes a direct link between an act and the problem it purports to address.” The court concluded that the direct link between the tariffs and trafficking was lacking, and thus that the sanctions did not “deal with” the threat.
I don’t think this conception of “direct link” is a natural reading of “deal with,” a phrase that signals presidential discretion. It is also contrary to and would jeopardize the long historical practice of presidents using IEEPA sanctions to create leverage over foreign countries and actors to address a foreign threat. President Carter, for example, invoked IEEPA to block the removal or transfer of Iranian property in order to pressure the government into releasing the American hostages—an approach aimed (as IEEPA sanctions often are) at leveraging a country’s economy to force the government to abate the threat rather than directing sanctions directly at the discrete entities that create or pose the threat. (The Carter IEEPA order is still in effect.)
The Trump administration also argued that the tariffs “deter[red] importation of illicit drugs concealed within seemingly lawful imports.” The court dismissed this connection because this rationale was not included in the trafficking orders themselves. This is a pinched view of the president’s powers under a broadly worded emergency statute, especially since the orders mentioned the failure to thwart trafficking and other crime as the “unusual and extraordinary threat” they were targeting. The court here in effect demands a detailed accounting in the president’s order of how the IEEPA authority deals with the threat—something that has not always been a feature of IEEPA orders, and that President Trump could presumably fix today in two minutes.
The Federal District Court’s Interpretive Arguments
Congress gave the CIT exclusive jurisdiction over “any civil action” against the federal government “that arises out of any law of the United States providing for,” among other things, “tariffs.” The CIT ruled that its IEEPA suit satisfied this provision. The district court disagreed because it concluded that IEEPA was not a law providing for “tariffs.” This jurisdictional ruling—about which I have doubts, but that takes me far afield—is also, the district court said, an answer to the legal issue on the merits. The government loses, the district court reasoned, because IEEPA does not authorize the president to impose tariffs.
This argument has the virtue of fighting the government's plain text argument— “regulate . . . importation . . . of . . . any property”—with its own plain text argument: IEEPA says “regulate,” not impose “tariffs.” Looking at different dictionaries, the court said that “[t]o regulate something is to ‘[c]ontrol by rule’ or ‘subject to restrictions,’” while “[t]ariffs are, by contrast, schedules of ‘duties or customs imposed by a government on imports or exports.’” “Those are not the same,” concluded the court. I found this argument by itself unpersuasive, since a schedule of government duties on imports is a form of government control over imports by rule or an example of the government subjecting imports to restrictions.
I also found unpersuasive the district court’s argument that since every other delegation of tariff-setting authority in Title 19 imposes “express procedural, substantive, and temporal limits on that authority,” IEEPA must not authorize tariffs since it lacks “language setting limits on any potential tariff-setting power.” The court said it would “not assume that, in enacting IEEPA, Congress repealed by implication every extant limitation on the President’s tariffing authority.”
The court’s description of IEEPA here is imprecise; the law contains limitations, as noted above, though they are broad and easy to satisfy. And no one claims that IEEPA repeals the limitations in the express statutory tariff authorities.
That said, this argument has intuitive appeal since IEEPA is being used to bypass express tariff laws that have greater constraints. What the argument fails to grasp, I think, is that IEEPA is an independent emergency power with independent aims and authorities as well as quite different substantive and procedural requirements tied to emergency situations. This failure is understandable, since IEEPA is a broad delegation that presidents have invoked promiscuously since 1977 and that Trump is invoking in a super aggressive and seemingly haphazard way.
There are many federal statutes beyond ones dealing with tariffs that IEEPA, if its easy prerequisites are satisfied, can be invoked to circumvent and thus render “irrelevant.” But absent a constitutional objection, which the court does not make, any adverse impact of IEEPA’s expansive emergency power on the more carefully gauged tariff and other statutes should be addressed to Congress.
The Federal District Court and the MQD
The court makes other arguments I found unpersuasive, but I want to zero in on what I take to be the right path that it starts down: the major questions doctrine.
The MQD requires the government to “point to ‘clear congressional authorization’” to justify exercises of “highly consequential power beyond what Congress could reasonably be understood to have granted.” The Court sometimes says the clear authorization requirement is triggered when agency action has immense “economic and political significance.” But as Curt Bradley and I recently explained, “[T]he Court . . . looks to a variety of factors—including the breadth of the claimed authority, the history and novelty of the agency action, persistent congressional inaction, and other contextual clues about congressional intent—to determine whether agency action is ‘major’ and thus demands clear congressional authorization.”
While the district court did not shout out the MQD by name, it arguably twice applied it.
In support of its plain language argument, the district court reasoned that “[i]f Congress had intended to delegate to the President the power of taxing ordinary commerce from any country at any rate for virtually any reason, it would have had to say so.” It then cited Biden v. Nebraska, which required “a clear statement from Congress when the interpretation of a provision would [implicate] a “question of ‘deep economic and political significance’ that is central to [the] statutory scheme” (cleaned up). And in assessing the novelty of using IEEPA for tariffs, the court quoted Nat’l Fed’n of Indep. Bus v. OSHA for the proposition that “[t]his lack of historical precedent, coupled with the breadth of authority that the [President] now claims, is a telling indication that the [tariffs] extend[] beyond the [President’s] legitimate reach.”
These passages get at the central issue that the Supreme Court will eventually need to confront: whether the MQD will allow Trump to rest his massively consequential tariffs on a first-time-in-50-years interpretation of IEEPA’s “regulate . . . importation” language. However, I think the applicability of the MQD to IEEPA is less certain, and more complex, than the district court let on.
First, the MQD indicators cut in different and complicated directions. Trump’s tariffs undoubtedly have huge economic and political significance. But whether they are “novel” for MQD purposes is unclear. Yes they are novel under IEEPA. But they are not novel in the sense that the IEEPA language Trump relied on is carried over from the TWEA language that Nixon invoked for import duties. We do not know how the MQD applies in this context. We also do not know how the “congressional inaction” criterion applies in this context.
Second, it is an open question whether the MQD applies to congressional authorizations to the president. Every Supreme Court decision involving the MQD has involved agency action, and lower courts are split on whether the MQD applies to presidential authorizations. The district court relied on the MQD without facing this question. And it is not easy to answer. As Bradley and I explained (with citations omitted):
It might be that the [MQD]—which aims to ensure that Congress has authorized agency action of wide-ranging significance—has greater purchase with regard to agency authorizations [than with presidential ones], since agencies normally “are creatures of statute” and “accordingly possess only the authority that Congress has provided.” Indeed, all of the Supreme Court’s major questions doctrine cases thus far have involved authorizations to agencies rather than to the President. Many foreign affairs authorizations, however, are directed at the President. On the other hand, some scholars argue that the concerns underlying the nondelegation doctrine are actually heightened when the authorization is made directly to the President, since (among other things) presidential action is not subject to the process requirements of the Administrative Procedure Act (APA). The Court has provided little guidance on this question.
Third, there is a hard unresolved question whether and how the MQD applies in the context of “foreign affairs” delegations to the executive branch. Bradley and I devoted 12 pages to this question (and dozens more as background). The answer, we suggested, depends on whether one adopts Justice Gorsuch’s “substantive canon” view of the MQD or Justice Barrett’s (and, arguably, the Court’s) “legislative intent” approach. The former position, we argued (pp. 1795-97), probably results in the MQD applying to IEEPA, but the latter position likely would not, and would mean that the government's plain language argument had a better chance of success.
These uncertainties about the MQD as applied to the IEEPA tariffs make this a wonderful context for the Supreme Court to clarify the meaning and scope of the MQD. Commentators have harshly criticized the Court for invoking the MQD opportunistically to strike down progressive executive actions such as tobacco and environmental regulation, student loan forgiveness, and a vaccine mandate. I’m not sure if the IEEPA tariffs are progressive or conservative, but they are a signature issue for a Republican president.
The IEEPA tariffs thus present an ideal context—broad plain-text authorization relied on by a Republican president for (arguably) novel and very consequential executive action—to show that the doctrine has bite in every context. But the Court can only do this by resolving the three hard issues above against the Trump administration. And setting doctrinal issues aside, the Court will surely hesitate before narrowing IEEPA powers that every president relies on heavily as a core foreign policy tool. These are some of the reasons why the IEEPA tariffs present such fascinating legal issues.
Conclusion
There was a good opinion to be written grappling with the MQD as applied to the IEEPA tariffs. But the CIT basically elided the MQD, and the district court invoked it in passing while avoiding the hard questions about its applicability to Trump’s tariffs. The U.S. Court of Appeals for the Federal Circuit stayed the CIT order and will now deal with the case on an emergency basis, as the D.C. Circuit likely will in responding to the government’s appeal of the district court’s decision. One way or another the case should be on the Supreme Court’s emergency docket soon.