Trump’s Tariff Case Is a Chance for the Supreme Court to Limit Emergency Powers

Such an outcome could prevent future progressive administrations from abusing the same law in, say, the name of climate change.

I n taking his worldwide tariff scheme to the Supreme Court today, Donald Trump may win recognition of a president’s right to tax foreign commerce. But contrary to media narratives, Trump is not claiming unilateral power for himself under the Constitution; instead, he is purporting to act under authority delegated by Congress for emergencies. Trump could still lose on the ground that the trade deficit does not constitute such an emergency. A loss on these lines would require the administration to narrow its sanctions to specific rivals and threats. But a Trump loss would also allow the Supreme Court to establish a precedent today that would block progressives from — to take one example — declaring a climate change emergency tomorrow.

In the 1977 International Emergency Economic Powers Act (IEEPA), Congress gave the president broad powers in the event of an “unusual and extraordinary threat” from abroad. These powers include the authority to “regulate” and “prevent or prohibit” not just “importation or exportation” — but virtually any foreign transaction. Under this law, President Trump issued three sets of tariffs last spring. To justify his decision, he declared first that Mexico had allowed international drug cartels to engage in smuggling illicit drugs, inflicting violent crime, and sustaining gangs. Second, he found that the lax controls at the border had allowed terrorists, traffickers, and gangs to cross the border. Trump used these declarations of national emergency to impose “trafficking tariffs,” in the words of the lower courts, targeted at Mexico, Canada, and China for their enabling of the illegal flow of opioids into the United States.

Trump’s third and broadest use of IEEPA, however, came from his declaration that the U.S. trade deficit with the rest of the world constituted a national emergency. “Underlying conditions, including a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and U.S. trading partners’ economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits,” Trump found, posed a threat to U.S. national security and the American economy. Under this last emergency, Trump levied tariffs on imports from almost every country in the world. On April 2, he announced that a 10 percent base tariff would be imposed on almost all countries, with an additional 10 to 50 percent applied on an ad hoc basis. The special case presented by Chinese imports resulted in tariffs as high as 125 percent.

In a Truth Social post on Sunday, Trump declared that today’s case, Trump v. VOS Selections, “will be, in my opinion, one of the most important and consequential Decisions ever made by the United States Supreme Court.” He may well be right. VOS Selections raises two questions. First, does the trade deficit amount to an emergency under IEEPA? Second, if the courts accept the president’s declaration of an “unusual and extraordinary” threat from abroad, does IEEPA grant the power to impose tariffs? Trump should lose on the first question but prevail on the second.

First, courts have always been reluctant to second-guess a president in the realms of foreign affairs and national security. Indeed, the Supreme Court has never overturned a presidential finding of an emergency in these areas. Emergencies emerge suddenly, develop quickly, and change unpredictably. Legislatures and judges cannot act quickly enough in these circumstances. By contrast, the Framers vested the executive power in the president because a sole man could act with “decision, activity, secrecy, and dispatch,” as Alexander Hamilton explained in Federalist No. 70. This difference in institutional capabilities naturally leads Congress to delegate broad emergency authority to the president in emergencies — logic built directly into IEEPA itself.

This dynamic exposes the chief vulnerability in the Trump tariffs. The language of “unusual or extraordinary” indicates that the threat to U.S. foreign policy, national security, or economy must be sudden, unanticipated, or beyond the normal course of affairs. An “unusual” threat might arise from a hostile action by a foreign nation, such as the Iranian hostage crisis, or the outbreak of armed conflict, such as the wars in Afghanistan and Iraq. It might even come from war between others that has a direct impact on U.S. foreign policy and national security goals, such as Russia’s invasion of Ukraine or the conflict between Israel and Iran. An “extraordinary” threat also includes potential significant harms to the U.S. A single terrorist shooting might not qualify, while the 9/11 attacks certainly do.

But it is doubtful that a trade imbalance alone can constitute a national emergency. Imbalances, after all, are not unusual. The trade deficit has existed for a half century. Indeed, President Richard Nixon imposed temporary across-the-board tariffs more than 50 years ago to try to reduce the trade deficit. The United States has gone through periods of positive and negative trade deficits in its history, just as we have positive or negative trade balances with individual nations even today. A trade deficit that has persisted for five decades is not unusual enough to constitute a national emergency.

Nor has the trade deficit suddenly presented a threat of great harm to U.S. foreign policy, national security, or the economy. Today’s trade deficit amounts to nearly $900 billion per year in nominal dollar terms. But as a percentage of gross national product, it was approximately the same in 2022 as it was about two decades ago. The trade deficit did not suddenly balloon to unsustainable levels in a year or two. It is not even clear that the trade deficit inflicts serious harm, since it is balanced by capital inflows into the U.S. economy from foreigners using the dollars they have received for their imports.

The trade deficit isn’t a sudden surprise that poses great harm to the nation, or an “unusual and extraordinary threat,” in the words of IEEPA. IEEPA permits sanctions against individual countries that pose a national security threat, and presidents have regularly used it to limit trade with Russia, Cuba, North Korea, Iran, and nations with which we have gone to war. If Trump had declared that China, for example, poses an extraordinary threat to U.S. national security and levied tariffs on Chinese imports, he would have won easily in the lower courts and before the Supreme Court. But IEEPA does not explode the concept of an emergency to encompass persistent, broad, social or economic problems.

Were Trump to prevail on the declaration of a national emergency, however, he might well win on the powers available under IEEPA. No one doubts that the tariffs depend wholly on the statutory authority delegated to the president by Congress. Under Article I of the Constitution, Congress alone has the power to “regulate commerce with foreign nations” and to “lay and collect Taxes, Duties, Imposts and Excises.” Presidents have no independent constitutional authority to impose tariffs or otherwise regulate trade. The Framers understood that the Constitution gave Congress the exclusive power of the purse, encompassing both taxation and spending.

In IEEPA, Congress delegated this power to the president during times of international emergency. If the president finds an unusual and extraordinary threat from abroad, IEEPA allows him to

investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, with-holding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.

Far from being unprecedented, IEEPA continued the equally broad authority of the 1917 Trading with the Enemy Act, which gave presidents the power to “regulate or prohibit” any foreign transactions in wartime or during a national emergency. Presidents used TWEA to impose economic sanctions during World Wars I and II, the Korean War, and the Cold War.

Nevertheless, a 7-to-4 majority of the U.S. Court of Appeals for the Federal Circuit held that this broad grant of emergency authority did not support any of Trump’s tariffs. “IEEPA’s grant of presidential authority to ‘regulate’ imports does not authorize the tariffs imposed by the Executive Orders,” the Court declared.

The Federal Circuit’s conclusion flies in the face of the clear meaning of the law’s text. IEEPA delegates to the president the power to regulate or prohibit any transaction involving foreign-owned property. An importation of a good or service from abroad falls plainly within the president’s congressionally authorized powers. Indeed, IEEPA has long allowed a president to completely block all U.S. trade with another country, such as North Korea, Cuba, or Iran, or to impose economic sanctions, such as on Russia over the Ukraine war.

The greater power must include the lesser power. If the president could cut off all imports from China because it poses a national security threat, he can reduce the amount of imports by instituting taxes, licenses, quotas, or other measures. The president could regulate trade with China by limiting the quantity of imports (only so many T-shirts, TVs, and tea), requiring Chinese companies to buy expensive import licenses, or imposing a surcharge on imports. While they are different in form, they are all regulations in substance.

The court below tried to wiggle out of this statutory straightjacket by arguing that IEEPA doesn’t specifically use the word “tariff” in its grant of power. But this ignores the full statutory text. IEEPA includes the power not just to “prohibit” imports but also to “regulate” them. Regulate must mean a power different from a complete blockade on imports. This should include the power to tax, which is a means to lower imports short of an outright embargo. Indeed, the Constitution’s grant of the power to “regulate” interstate commerce does not preclude the lesser tools that Congress may use short of an outright ban. The Supreme Court has long permitted Congress to use a wide range of methods to regulate interstate commerce, including financial penalties and taxes.

Critics further invoke recent Supreme Court cases paring back the power of the administrative state to justify limiting presidential power over tariffs. In striking down the Biden administration’s effort to cancel student loans or its drive to require nationwide Covid vaccinations, for example, the Supreme Court has announced a “major questions doctrine” that counsels against reading vague laws to delegate vast grants of power over major economic or social questions. The major-questions doctrine is a canon of statutory construction that protects a more important constitutional principle: the non-delegation doctrine, which prohibits Congress from delegating too much of its legislative power to the executive.

But IEEPA is no vague statute. It applies only to emergencies. It vests the president with broad economic powers to quickly and decisively address such emergencies. It provides an extensive — even exhaustive — list of powers. Further, the Supreme Court has said clearly that the non-delegation doctrine does not apply in the areas of foreign affairs and national security. In the 1936 ruling U.S. v. Curtiss-Wright, the Supreme Court upheld a law delegating to the president the power to impose an embargo on warring nations. Even though the Court assumed that the same law aimed at domestic affairs would violate the non-delegation doctrine, it held that these limits did not apply to cooperation between Congress and the president in foreign affairs. “The powers of the federal government in respect of foreign or external affairs and those in respect of domestic or internal affairs [are] different, both in respect of their origin and their nature,” Justice George Sutherland wrote for the majority. “The broad statement that the federal government can exercise no powers except those specifically enumerated in the Constitution, and such implied powers as are necessary and proper to carry into effect the enumerated powers, is categorically true only in respect of our internal affairs.” The Court explained that foreign affairs were fraught with danger and uncertainty and called upon the unique speed, unity, and decisiveness of the executive.

Judicial deference to the exercise of broad economic emergency powers is not a matter of speculating about the scope of Curtiss-Wright. In the 1981 case Dames & Moore v. Regan, the Supreme Court addressed a presidential exercise of economic power during an international crisis that fell within a gap in IEEPA’s broad terms. To execute an agreement releasing the Iranian hostages, Presidents Carter and Reagan ordered the suspension of all lawsuits against the Iranian government, the lifting of judicial freezes on Iranian government assets, and the transfer of the cases to a new U.S.-Iran claims tribunal in the Hague. Reagan’s problem was that IEEPA did not provide for the suspension of judicial decisions awarding Iranian assets to American plaintiffs. Nevertheless, the Court upheld the executive orders — it would not allow an unintentional lacuna in IEEPA to prevent the president from taking action he deemed necessary to address a national emergency. “Congress cannot anticipate and legislate with regard to every possible action the President may find it necessary to take,” Justice Rehnquist wrote for the Court. “Enactment of legislation closely related to the question of the President’s authority in a particular case which evinces legislative intent to accord the President broad discretion may be considered to ‘invite’ measures on independent presidential responsibility.” Dames & Moore commands courts to defer to presidential exercises of economic power in foreign affairs when the law may be silent, because Congress has already explicitly delegated broad authority in IEEPA.

Nevertheless, the Court may ultimately strike down Trump’s tariffs if only because it must find some limit on the definition of an emergency that then triggers these broad powers. Limits on what constitutes an emergency are important — without them, future progressive administrations could abuse IEEPA to take over the American economy in the name of climate change or other ideological pet causes. Climate change, like the trade deficit, is a broad economic and social challenge that has developed over decades. It may have a large, though gradual, impact on the economy. Progressives could declare a climate change national emergency and then, under IEEPA, sanction countries that do too little to stop fossil fuel emissions, produce goods deemed by environmentalists to be too “dirty,” or that don’t cooperate in misguided international agreements. A future progressive president could sanction energy companies and impose a carbon taxes on imported goods and services. If “unusual and extraordinary threat” includes the trade deficit, it could plausibly also include climate change. Supporters of Trump’s tariffs would have little grounds on which to oppose a climate change emergency.

While the justices may not deliver the victory that President Trump seeks, their ruling will define how far any future president can go when invoking emergency economic powers. The Court may overturn the lower court’s cramped reading of IEEPA and restore the broad reading that Congress intended for genuine crises. Yet it may also confront the deeper question of whether a long-standing trade deficit can qualify as the kind of “unusual and extraordinary threat” that justifies emergency action. The justices should block the tariffs to preserve emergency powers for when presidents really need them.