“Held: IEEPA does not authorize the President to impose tariffs.”
That is what the Supreme Court found in today’s ruling. It’s a glorious statement — but hardly glorious enough.
To truly rein in Trump’s taxing by executive fiat, the Court should have looked beyond the statutory question of whether Congress meant to delegate tariff power in the 1977 IEEPA law — which it most certainly did not, so kudos for making the right call there. It should have hit on the deeper constitutional question at issue and revived the long-dormant nondelegation doctrine, ruling that Congress cannot surrender its enumerated taxing power to the president even when it wants to.
Sadly, Justice Neil Gorsuch is alone among the justices in wanting to resurrect nondelegation, which undergirds enormous swaths of U.S. administrative law. The rest seem content to uphold the long-standing delegation standard that has effectively hollowed out the doctrine. It is that Congress can delegate legislative power to the executive branch so long as it attaches an “intelligent principle” in the statute to guide the exercise of that power. This principle has allowed Congress to pass several laws over the last 95 years or so that expressly authorize the president to impose tariffs on endlessly elastic grounds, which presidents like Trump are keen to exploit.
I wrote about how this works in practice just over a year ago for the Stanford Daily, before Trump was inaugurated:
The first Trump administration collected $89 billion from tariffs on foreign products. President Biden raised another $144 billion by keeping Trump’s tariffs in place and creating new ones. Yet neither president received congressional approval for any of these taxes. They imposed them unilaterally, contradicting the plain text of the Constitution.
Article I of the Constitution grants Congress, not the president, the sole power to “lay and collect Taxes, Duties, Imposts and Excises.” How, then, could the president raise tariffs (another word for duties) on his own? The answer is that Congress delegated broad swaths of tariff-setting authority to the executive branch in a series of 20th century laws. That is why, although Congress has not increased import duties since 1930, the list of federal tariffs now contains over 4,440 pages.
Such laws are stunningly vague in outlining which circumstances trade barriers may be imposed. Section 301 of the 1974 Trade Act empowers the president to slap tariffs on countries that enact “unreasonable” or “unjustifiable” policies that “burden U.S. commerce.” Crystal clear. Section 232 of the 1962 Trade Expansion Act permits him to raise duties on imports which “threaten to impair U.S. national security.” Trump successfully applied this precise criteria to steel and aluminum imports in 2018, despite the fact that U.S. military consumption of each material accounts for a whopping 3% of domestic production.
This delegation of taxing power is made possible by longstanding court precedent that Congress may give the president the power to raise tariffs, so long as it attaches a guiding “intelligible principle” to which he is required to conform. But the rules which supposedly “guide” the president are usually so indefinite as to be unintelligible.
What exactly qualifies as a threat to “national security”? What constitutes a “burden” on American commerce? Nobody knows — and therefore, nobody can refute the president when he claims to know.
Trump still has these statutory tools at his disposal — plus several others containing equally broad language. (Section 122 is to address “large and serious” balance-of-payment deficits; Section 338 covers “unequal impositions or discriminations” against U.S. commerce; Section 201 is to facilitate the “positive adjustment” of industries to import competition — whatever any of that means.) The president has used these laws prolifically to slap tariffs on certain import categories, such as steel and automobiles, as well as on particular nations like China. Now that the basis for most of his second-term tariffs has been obliterated, he is likely to begin flinging them around madly.
Under most of these statutes, the only burden to implementation is that a department in the executive branch must “investigate” a certain set of imports to see whether they qualify for tariffs. The findings are then treated as legally authoritative and are rarely subject to judicial scrutiny. So, all Trump has to do is ask Commerce Secretary Howard Lutnick or U.S. Trade Representative Jamieson Greer to cough up a farcical justification for what he already wants to do. This, by the way, is how we now have tariffs on kitchen counters for “national security” purposes.
As the great trade economist Scott Lincicome writes, today’s ruling is “the end of the beginning of the tariff war.” From here on out, expect a lot more chaos, a far more complicated patchwork for importers to navigate, and many more specious justifications for tariffs.
Given the utter uselessness of our legislative branch, we’re probably stuck with this arrangement until the Court finally issues the holding I said it should have made a while back: “The Constitution permits only Congress to raise taxes. Last time we checked, tariffs are indeed taxes and the president is not Congress.”