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Trumps tariffs could tank the economy. Will the Supreme Court stop them?
After winning the 2024 election in part due to high inflation early in President Joe Bidens term, President-elect Donald Trump wants to enact policies that would lead to the very same kind of inflation that doomed Democrats.Though Trump inherits a strong economy and low inflation, hes proposed a 10 to 20 percent tariff on all imports, and a 60 percent tariff on all imports from China. The Budget Lab at Yale estimates that this policy alone could raise consumer prices by as much as 5.1 percent and could diminish US economic growth by up to 1.4 percent. An analysis by the think tank Peterson Institute for International Economics, finds that Trumps tariffs, when combined with some of his other proposals such as mass deportation, would lead to inflation rising between 6 and 9.3 percent.If Trump pushes through his proposed tariffs, they will undoubtedly be challenged in court and, most likely, in the Supreme Court. There are no shortages of businesses that might be hurt financially by these tariffs, and any one of them could file a lawsuit.That raises a difficult question: Will this Supreme Court permit Trump to enact policies that could sabotage his presidency, and with it, the Republican Partys hopes of a political realignment that could doom Democrats to the wilderness?The legal arguments in favor of allowing Trump to unilaterally impose high tariffs are surprisingly strong. Several federal laws give the president exceedingly broad power to impose tariffs, and the limits imposed by these statutes are quite vague.A presidential proclamation imposing such tariffs wouldnt be unprecedented. In 1971, President Richard Nixon imposed a 10 percent tariff on nearly all foreign goods, which a federal appeals court upheld. Congress has since amended some of the laws Nixon relied on, but a key provision allowing the president to regulate importation of any property in which any foreign country or any national thereof has or has had any interest remains on the books.The judiciary does have one way it might constrain Trumps tariffs: The Supreme Courts Republican majority has given itself an unchecked veto power over any policy decision by the executive branch that those justices deem to be too ambitious. In Biden v. Nebraska (2023), for example, the Republican justices struck down the Biden administrations primary student loans forgiveness program, despite the fact that the program is unambiguously authorized by a federal statute.Nebraska suggests a Nixon-style tariff should be struck down at least if the Republican justices want to use their self-given power to veto executive branch actions consistently. Nebraska claimed that the Courts veto power is at an apex when the executive enacts a policy of vast economic and political significance. A presidential proclamation that could bring back 2022 inflation levels certainly seem to fit within this framework.The question is whether a Republican Supreme Court will value loyalty to a Republican administration, and thus uphold Trumps tariffs; or whether they will prefer to prop up Trumps presidency by vetoing a policy that could make him unpopular and potentially invite the Democratic Party back into power. After the Courts decision holding that Trump is allowed to use the powers of the presidency to commit crimes, it is naive to think that this Courts decisions are driven solely or even primarily by what the law and the Constitution actually have to say about legal questions. But that does not mean that this Court will necessarily strike down a Republican tariff policy that could do long term damage to the GOP.The federal laws governing tariffs give the president an enormous amount of powerTariffs are often viewed as economic weapons that the United States can use to combat other nations activities that undermine US interests. For this reason, federal law gives the president significant power to impose new tariffs after an appropriate federal agency determines that deploying such a weapon is justified.One striking thing about these laws, however, is that they focus far more on process than on substance. Federal tariff laws tend to lay out a procedure the federal government must follow before it can authorize a new tariff, but they place few explicit restrictions on the nature of those tariffs once the process is followed. The Trump administration must follow certain processes to create new tariffs, but so long as it follows that process it has broad latitude over tariff policy.Consider, for example, Section 301 of the Trade Act of 1974. This law requires the US trade representative, a Cabinet-level official appointed by the president, to make certain findings before their power to issue new tariffs is triggered. But specific findings the trade representative must make before acting are quite vague. The power to issue tariffs can be triggered if the trade representative finds that a foreign country is engaged in activity that is unjustifiable and burdens or restricts United States commerce, or that is unreasonable or discriminatory and burdens or restricts United States commerce.So thats not much of an explicit limit on tariffs the governments power to issue them is triggered if a Cabinet official determines that a foreign nations behavior is unreasonable.Once the trade representative makes this determination, their powers are quite broad. The government may impose duties or other import restrictions on the goods of, and, notwithstanding any other provision of law, fees or restrictions on the services of, such foreign country for such time as the trade representative determines appropriate.As my colleague Dylan Matthews notes, Trump used this power to impose sweeping tariffs against China. Biden has made liberal use of this power, too, expanding tariffs on steel, batteries, solar cells, and electric vehicles from China.Another statute gives the president similarly broad authority to impose tariffs after the commerce secretary conducts an investigation and determines that a foreign good is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security. In his first term, Trump used this to tax imports of steel and aluminum.And then theres the authority that Nixon used in 1971 to issue broad new tariffs on a variety of imports. In its current form, this law allows the president to act only after they declare a national emergency 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. But the law doesnt define terms like national emergency or unusual and extraordinary threat. And, once such an emergency is declared, the presidents power is quite broad.This is the law that also permits the president to regulate importation of any property in which any foreign country or any national thereof has or has had any interest. Its important to emphasize that, while these laws impose few substantive limits on tariffs, they do require Trump to jump through certain procedural hoops and his administration struggled with such procedural barriers in his first term. In 2020, for example, a 5-4 Supreme Court rejected the administrations attempt to eliminate the Deferred Action for Childhood Arrivals program, which allows hundreds of thousands of undocumented young immigrants to live and work in the US, due to a paperwork error.Still, assuming the second Trump administration is staffed with competent lawyers who can navigate procedural hurdles more deftly this time, federal law places few explicit limits on the presidents power to issue tariffs.How the Court could veto Trumps tariffs, if a majority of the justices want to do soThe strongest legal argument against Trumps proposed tariff policy involves something called the major questions doctrine, a power that the Supreme Court gave itself in recent years, which has only ever been used to block policies handed down by the Biden administration. The Court has never explained where this major questions doctrine comes from, and has never attempted to ground it in any statute or constitutional provision although some individual justices have written concurring opinions that attempt to do so.When summarizing this fabricated legal doctrine, the Court often quotes a line from Utility Air Regulatory Group v. EPA (2014), which states that we expect Congress to speak clearly if it wishes to assign to an agency decisions of vast economic and political significance. But the justices have only provided vague guidance on just how clearly Congress must write a statute if it wants to give broad policymaking authority to an agency, so it is unclear if this Court would follow a statute permitting the president to tax any property that any foreign country has any interest in.The major questions doctrine is a new legal concept, which is poorly defined and which has never been used to block any policy by a Republican president or, indeed, any president not named Joe Biden (some scholars argue that the Court applied an early version of the doctrine in FDA v. Brown & Williamson (2000) to block a Clinton administration policy, but the Courts reasoning in that case bears only a passing resemblance to its reasoning in its Biden-era decisions). Because this doctrine is so ill-defined, a lawyer can only guess at whether this Court will apply it to the Trump administration at all, or specifically to Trumps tariff policies.Still, there is both a principled argument for why it might apply to Trump, and a cynical one. The principled one is that the law should be the same regardless of which party controls the White House. So, if the Republican justices insisted on vetoing Biden administration policies they deemed too ambitious, they should also veto similarly ambitious Trump administration policies. Under this argument, the major questions doctrine may still be bad law that the Republican justices pulled out of thin air, but the least they can do is apply it equally harshly to presidents of both parties.The cynical argument, meanwhile, is that Democrats got crushed at the polls, despite low inflation and a strong economy, seemingly in part because they held power during a period of high inflation. If Trump gets to implement his tariffs, that would also likely trigger a period of similarly high inflation, and that would be bad for the political party that controls the Supreme Court.So what should the Supreme Court do?Trump has proposed many policies that violate the Constitution. If he follows through on his threats to have his political enemies arrested, that would violate the First Amendment and may violate the Fourth Amendments requirement that law enforcement must have probable cause to make an arrest. Depending on how Trump conducts his deportation policies, they may violate constitutional due process guarantees. His anti-transgender policies could violate constitutional protections against discrimination, and some of his policies targeting incarcerated transgender people could violate the Constitutions ban on cruel and unusual punishments.But theres nothing in the Constitution that prohibits tariffs. Tariffs are a common part of US economic and foreign policy. Federal laws that long predate the Trump administration give the president broad authority over tariffs. And theres even a precedent, from the Nixon administration, for the kind of sweeping tariffs that Trump says he wants to implement. The coming legal fight over tariffs presents a dilemma. A decision against the tariffs would consolidate more power in an unelected Supreme Court, and breathe more life into a legal doctrine that has no basis in law. A decision for the tariffs, however, would cause needless misery to millions of Americans.The Constitution itself is pretty clear about what should happen in this case. When a duly elected president violates the Constitution or a federal law, its the Supreme Courts job to step in. But when the president merely enacts an unwise economic policy, the Court is supposed to play no role whatsoever even if this policy is likely to hurt the nation or the political party that controls the Court. Trumps tariffs are unwise, but assuming that he implements them in compliance with federal law, they are not unconstitutional.In any event, its far from clear what these justices will do. But, if Trump does try to implement the kinds of tariffs he touted on the campaign trail, a legal showdown over whether he can actually do what federal law says he can do is almost certainly inevitable.Youve read 1 article in the last monthHere at Vox, we're unwavering in our commitment to covering the issues that matter most to you threats to democracy, immigration, reproductive rights, the environment, and the rising polarization across this country.Our mission is to provide clear, accessible journalism that empowers you to stay informed and engaged in shaping our world. By becoming a Vox Member, you directly strengthen our ability to deliver in-depth, independent reporting that drives meaningful change.We rely on readers like you join us.Swati SharmaVox Editor-in-ChiefSee More:
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