The best legal case against Trumps tariffs, explained
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On Wednesday, President Donald Trump announced sweeping new tariffs on pretty much everything imported into the United States. Among other things, the tariffs include a 10 percent minimum tax of imports outside of North America, a hodgepodge of different tax rates on Canadian and Mexican goods, a 25 percent tax on cars manufactured outside the US, and a chaotic mix of country-specific tariffs ranging from 10 to 50 percent.Trumps tariffs are likely to deal a significant self-inflicted blow to the US economy. As of this writing, the S&P 500 a common index used to track US stock prices is down about 4 percent. The Budget Lab at Yale predicts that the tariffs will cause enough inflation to effectively reduce the average US households annual income by $3,789 in 2024 dollars. A similar analysis by Auckland University of Technology economics professor Niven Winchester predicts a $3,487 blow to US households.Thus far, Trumps second presidential term has been a series of staring contests between Trump and the courts. Trumps tariffs could lead to yet another, though the answer to the question of whether a lawsuit challenging them might succeed is quite unclear. And not just because the Supreme Court has shown great solicitude for Trump in recent years. The federal laws governing tariffs give the president very broad authority over trade policy generally, and specifically over tariff rates. A court concerned solely with following the text of federal law is likely to uphold Trumps tariffs.But the current Supreme Court is not such a court. During the Biden administration, the Courts Republican majority frequently used a novel legal doctrine known as major questions to strike down executive branch actions they deemed too ambitious. Under the doctrine, the courts are supposed to cast a particularly skeptical eye on executive branch actions of vast economic and political significance like, say, a new tax policy that is likely to cost the average American household thousands of dollars a year.The major questions doctrine cannot be found somewhere in the Constitution or a federal statute. It is fairly new, the Court has never explained where it comes from, and it appears to be entirely made up by the Republican justices. So it is difficult to predict whether those justices will apply it to a Republican president, or whether they will deem Trumps tariffs a violation of this entirely arbitrary doctrine.Still, the argument that Trumps tariffs violate the major questions doctrine is sufficiently straightforward that it would be easy for a judge to write an opinion reaching this conclusion. It might seem that Republican judges, especially those appointed by Trump, would hesitate to apply the doctrine in a manner that would harm him. Judicial politics, however, do not always align perfectly with the behavior of elected officials.Federal judges serve for life, so they do not need to fear electoral retaliation if they break with a president of the same party. And justices sometimes have ideological commitments that trump their loyalty to whatever transient agenda their partys political leaders are pushing at any given moment. The major questions doctrine centralizes power in the judiciary, something that members of the judiciary may find attractive. And a decision applying this doctrine to a Republican president would help legitimize it, as it has previously only been used against Biden.There is a very real chance, in other words, that five justices would place their commitment to judicial supervision of the executive above their commitment to Trump striking down his tariffs in the process.In his executive order announcing the latest round of tariffs, Trump claims the power to do so under a wide range of federal laws, including the International Emergency Economic Powers Act and the Trade Act of 1974. Though these laws do impose some constraints on Trump and his subordinates, those constraints are largely procedural and impose few substantive limits on the scope and size of tariffs.Under one provision of the Trade Act, for example, the US Trade Representative, a Cabinet-level position currently held by Jamieson Greer, must make certain findings such as a determination that a foreign countrys conduct is unjustifiable and burdens or restricts United States commerce, or that this countrys actions are unreasonable or discriminatory and burdens or restricts United States commerce before the United States may impose new tariffs under this act.Once Greer does so, however, executive power to tax imports is 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.Trumps latest executive order, meanwhile, appears to rely heavily on his power to regulate trade after declaring a national emergency the order makes such a declaration in response to what he labels the domestic economic policies of key trading partners and structural imbalances in the global trading system.Notably, this law only permits the president to declare such an emergency to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, but the law does not define terms like national emergency or usual and extraordinary threat.Once a declaration of emergency is in place, the presidents powers are quite broad under the statute. Trump may regulate any property in which any foreign country or any national thereof has or has had any interest.The Court doesnt pay much attention to the text of federal laws in its major questions decisionsThough the text of the laws governing presidential authority over tariffs give Trump and his administration a great deal of authority, so did another law known as the Heroes Act. That law gives the education secretary sweeping power to waive or modify student loan obligations as the Secretary deems necessary in connection with a war or other military operation or national emergency such as the Covid pandemic.But the Courts Republican majority paid no heed to this broad statutory language in Biden v. Nebraska (2023), which struck down a Biden administration program that would have forgiven $10,000 worth of student loans for most borrowers.Nebraska relied, at least in part, on the major questions doctrine, claiming that the student loan forgiveness program was illegal because it was simply too big. The economic and political significance of the Secretarys action is staggering by any measure, the six Republican justices claimed in that opinion, pointing to a University of Pennsylvania analysis that concluded that the student loan forgiveness program would cost between $469 billion and $519 billion.Trumps tariffs, meanwhile, involve similarly eye-popping numbers. According to the Census Bureau, there are about 127 million households in the United States. If Yales Budget Lab is correct that the average household will lose $3,789 in real annual income because of Trumps tariffs, that means that American consumers face a staggering loss of more than $480 billion in real income.In fairness, Nebraska also pointed to what it called the unprecedented nature of the Secretarys debt cancellation plan to justify its conclusion, and Trump may be able to point to a precedent for the kind of sweeping tariffs he recently announced. In 1971, President Richard Nixon briefly imposed a 10 percent tariff on nearly all foreign goods, and a federal appeals court upheld this tariff. Notably, however, Congress has since amended some of the laws that Nixon relied upon more than half a century ago.Additionally, there appears to be a bit of a debate over whether the major questions doctrine applies to laws that delegate power directly to the president as opposed to a statute like the Heroes Act, which empowers a cabinet secretary or other agency-level official. In Nebraska v. Su (2024), for example, the Biden administration argued that this doctrine does not apply to the president. Though the federal appeals court which heard this case did not reach this question, Trump-appointed Judge Ryan Nelson argued that it does in part because the separation of powers concerns that animated decisions like Nebraska apply equally regardless of whether executive power is exercised by the president or one of his subordinates.Its impossible to guess whether the current slate of justices will rule that the Nixon precedent justifies setting aside the major questions doctrine, or whether they will conclude that this doctrine does not apply to Trump. Again, this doctrine is brand new, is not grounded in any constitutional or statutory text, and appears to be entirely made up by the Courts Republican majority. So asking whether this fabricated doctrine applies to the president is a bit like asking your daughter if her imaginary friend likes to dance. The answer is whatever she wants it to be.Still, the case for applying the major questions doctrine to Trumps tariff is at least as strong as the argument for applying it to Bidens student loan forgiveness plan. And, while this Court has been extraordinarily protective of Trump in the past, there are cynical partisan reasons why its Republican majority may want to apply the major questions doctrine to Trump in this case Republicans would likely get crushed in the next election if Trump tanks the economy with his tariffs.See More:
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