The Real Significance of Trump's Tariffs

President Donald Trump's announcement that he was imposing broad and hefty tariffs on goods from Mexico, Canada and China provoked a predictably swift outcry. But there is one aspect of the move that has not received nearly enough attention.
It's not really about trade. It's about power.
Trump levied tariffs during his first term, but this time is different. That's because on Monday, Trump invoked a law — the International Emergency Economic Powers Act — that has never been used to impose tariffs before, let alone tariffs of this breadth and magnitude. (The Mexico and Canada tariffs were quickly put on hold before going into effect, though Trump could always resuscitate them, and he is apparently planning to open up another front in his trade wars by imposing similar tariffs on goods from the European Union. The China tariffs, meanwhile, are still on.)
Scholars of trade law say the move will likely be challenged in court because it arguably exceeds the presidential authority established under the Constitution, though whether this Supreme Court would rule against Trump is far less certain.
If he succeeds, Trump will end up fundamentally altering the balance of power between the three branches of the federal government — giving him and future presidents tremendous power to impact the global and domestic economies without any input from the elected representatives of Congress. And Republicans who go along with this gambit may regret it later on if and when a President Alexandria Ocasio-Cortez or a President Pete Buttigieg deploys these powers.
When Trump imposed tariffs during his first term, he cited authority under other laws, like the Trade Act of 1974 and the Trade Expansion Act of 1962. At one point he threatened to invoke the IEEPA to impose tariffs on Mexican goods, but he never followed through, perhaps amid concern it would have been seen as legally dubious.
That's because the IEEPA is typically used to impose sanctions — not tariffs — on other countries.
But Trump's decision to use the IEEPA this time, when he's aggressively flexing his executive authority, may be no accident: Unlike other trade laws, the IEEPA has the fewest procedural requirements and safeguards.
It gives the president the power to regulate or prohibit a broad swath of economic activity in order 'to deal with any unusual and extraordinary threat' that is based largely outside the United States and concerns 'the national security, foreign policy, or economy of the United States.' In the executive orders that announced the tariffs on Canada, Mexico and China, Trump invoked the opioid crisis, as well as illegal immigration from Canada and Mexico.
By contrast, when Trump imposed tariffs during his last term, including on certain products from China, the statutes he used required his administration to first conduct investigations through either the International Trade Commission, the Department of Commerce or the U.S. Trade Representative. Those processes can take months and require specific determinations under each statute — for instance, that the imports at issue are the substantial cause of serious injury to a domestic industry — and in some cases require the executive branch to consult with Congress. As the Congressional Research Service notes, 'The focus of these laws is not to provide additional sources of revenue, but rather to alter trading patterns and address specific trade practices.'
No president has ever used the IEEPA to impose tariffs before. In fact, the IEEPA was passed as part of a broader effort by Congress in the 1970s to limit the president's ability to exercise emergency economic powers. The framework ultimately created, however, completely fails to rein in the president, according to Timothy Meyer, a law professor and expert on international trade law. And Trump is taking advantage of that failure by pushing beyond what the Constitution intended.
'This strikes me as unconstitutional,' Meyer told me. 'It's very difficult to see how the framers would've thought that it was constitutional for the president to simply have the power on the drop of a hat to impose an across-the-board 25 percent tariff on our major trading partners.'
The Constitution gives Congress the authority to 'lay and collect Taxes, Duties, Imposts and Excises.' Between Trump's tariffs and his unilateral effort to halt federal spending, he has now effectively claimed that he has both taxing and spending authority — a government all his own. Congress barely even needs to exist in this framework.
Trump may run into hurdles in the courts. There are both statutory and constitutional limits, and in due course, we may see lawsuits that try to invalidate the China tariffs and effectively preempt Trump's ability to impose others.
Those challenges would likely come from American businesses that have to pay the tariffs, and the most obvious forum would be the Court of International Trade, with any appeals going up to the Federal Circuit Court of Appeals and eventually the Supreme Court.
What might that challenge look like?
To the extent the president has any power in the area of taxes and tariffs, he gets it from statutes passed by Congress. Challengers could argue that the IEEPA, as a simple textual matter, does not give Trump the power to impose tariffs. The language of the statute is broad — the president can, for instance, prohibit 'transactions in foreign exchange' and 'the importing or exporting of currencies or securities' — but it does not explicitly give the president any authority to impose 'tariffs' or 'taxes.'
Would that argument pass muster at today's Supreme Court? It's hard to know. There is enough vagueness in the statute that so-called conservative textualists — who typically refuse to consider congressional purpose or legislative history when interpreting statutes — could try to justify extending the authority given by Congress to tariffs and taxes as well, even though Congress could have written that language into the statute if it meant to. (If this makes textualism sound like an interpretive methodology that is ripe for abuse — that allows judges to make policy choices by selectively choosing how to read statutes under the guise of a neutral framework — then you have the right idea.)
A considerably stronger argument against Trump's tariffs draws on the Supreme Court's so-called major questions doctrine.
The Republican appointees on the court created this doctrine fairly recently, but it is now the law of the land. The doctrine requires more rigorous analysis and scrutiny of executive authority if the action passes some undefined threshold of 'economic and political significance.' In that case, the executive branch is allowed to act only if it's been given a clear directive from Congress. In 2023, the Republican appointees on the court relied on the major questions doctrine to throw out a large part of President Joe Biden's student loan forgiveness program — which, they said, lacked sufficiently clear statutory authorization from Congress to justify a major policy change with wide-ranging economic effects.
Under the emergency economic powers law, there is no clear delegation of taxing or tariff authority to the president.
There is also little question that the tariffs that Trump has imposed — and apparently intends to impose — could have extraordinary impacts on the domestic and global economies. Just this week, Trump's trade adviser Peter Navarro acknowledged as much in an interview with my POLITICO colleague Dasha Burns. 'If President Trump succeeds like he wants to succeed,' Navarro said, 'we are going to structurally shift the American economy from one overreliant on income taxes and the Internal Revenue Service, to one which is also reliant on tariff revenue and the External Revenue Service.'
If, however, a conservative court wanted to rule in Trump's favor on the tariffs, it could draw inspiration from the Supreme Court's decision in 2018 upholding Trump's travel ban on certain majority-Muslim countries. In that case, the Republican appointees signed off on a broad assertion of presidential authority, essentially ignoring Trump's effort to target Muslims and deferring to him on the theory that a 'travel ban' implicated national security and foreign policy concerns that the president is better suited to address than legislators or the courts.
The Supreme Court's major questions doctrine has developed since the decision on the travel ban and was used to thwart multiple Biden initiatives in the domestic context, including an eviction moratorium during the pandemic. Still, it's possible the court could decide not to apply the doctrine in the realm of foreign affairs.
As a matter of principle, it would be hard to justify that deviation. 'It is really tough to see how some of the things that they have called major questions — the student loan issue, the eviction moratorium — are significant economic questions, but a 25 percent tax on two of our largest trading partners across the board is not, particularly when you're talking about a statute that says nothing about tariffs specifically,' Meyer observed.
Any litigation in this area, however, could move slowly. We have become accustomed to seeing courts quickly impose injunctions to stop executive actions that may be unlawful, but the legal standard requires the challengers to demonstrate that they will suffer 'irreparable harm' in the absence of the injunction. Financial losses alone often do not qualify under that standard (on the theory that the plaintiffs can be made financially whole at the end of the case if they ultimately prevail in the ordinary course of litigation).
Congress has options here, and it should explore them quickly. The IEEPA contains a statutory mechanism for Congress to override Trump's tariffs, but it would require it to pass a veto-proof majority joint resolution, which, given Trump's grip on Republicans in the House and Senate, is practically inconceivable.
Democrats are in the minority, of course, but they have procedural levers of influence. Just this week, Sen. Brian Schatz (D-Hawaii) said that he had put a blanket hold on State Department nominees in response to the administration's assault on USAID. Democrats could also refuse to help Republicans pass spending bills and force a government shutdown — which could draw the public's attention to this issue as well as the many other controversial actions that Trump has taken in his less than three weeks in office.
On a longer horizon, Congress could pass a law that significantly constrains the president's authority under the IEEPA — for instance, by narrowing the circumstances in which the president can declare an 'emergency,' or, as with other trade statutes, by requiring the president to go through internal, agency-level fact-finding processes to study and justify any proposed actions under the statute before they take effect. One day, a Democrat will be back in the White House, and Republicans will be hungry for oversight when that happens.
The other option is for Congress to do nothing. And if Trump were ultimately to prevail in the courts, he will have usurped extraordinary power from the legislative branch.
It was no accident that the framers gave the power to tax and spend to Congress. These are incredibly complex issues that require difficult trade-offs and that have tremendous impacts on the American people. The framers got it right when they concluded that Congress — which is broadly and more directly responsive to the public than the president — should have this authority and that it should be up to it to decide whether and to what extent to delegate any of that power to the president.
Trump's tariffs are yet another executive overreach among many in his opening weeks. Here, too, Congress ignores this at its own peril.

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