The Court didn’t rule that presidents could never use tariffs for regulatory purposes — only that Congress would first need to give the president that power.
This is the third installment of my series on today’s big tariff decision — see here and here for the first two. Much of the result was predetermined by the majority’s resolution of the “how” questions: Rather than defer to the president because tariffs touch on foreign policy, Chief Justice John Roberts and the two justices who joined him (Barrett and Gorsuch) applied the skeptical standard of the major questions doctrine to conclude that IEEPA would be read to include a power to impose emergency tariffs only if it was clear from its language that it did so. Of course, it’s not clear at all — and the three liberals, without joining the major questions section because they dislike a doctrine that constrains Democratic presidents from reading laws creatively, agreed that IEEPA grants no tariff power.
The Court began, as has every court to consider this question and every justice in the case, by noting that IEEPA never mentions tariffs, duties, customs, or any common synonym for them. Thus, the government’s argument came down to two words in the statute: “regulate” and “licenses.”
While the power to “regulate” can sometimes include the power to tax for regulatory purposes, as it has been read in the Commerce Clause context (though not by Roberts in the famous Obamacare case, when he ruled that the individual mandate wasn’t a regulation under the commerce power, but rather a tax under the taxing power), the Court simply wouldn’t let its use in the statute alongside several other verbs be read so broadly as to hand over vast tariff powers:
The power to “regulate . . . importation” does not fill that void. “Regulate,” as that term is ordinarily used . . . captures much of what a government does on a day-to-day basis. . . . [But] if “regulate” is as broad as [Justice Brett Kavanaugh’s] dissent suggests . . . then the other eight verbs in [IEEPA] are simply wasted ink. But the facial breadth of “regulate” places in stark relief what the term is not usually thought to include: taxation. The U. S. Code is replete with statutes granting the Executive the authority to “regulate” someone or something. Yet the Government cannot identify any statute in which the power to regulate includes the power to tax. The Government concedes, for example, that the Securities and Exchange Commission cannot tax the trading of securities, even though it is expressly authorized to “regulate the trading of . . . securities.”. . . We are therefore skeptical that in IEEPA — and IEEPA alone — Congress hid a delegation of its birth-right power to tax within the quotidian power to “regulate.”
Taxes, to be sure, may accomplish regulatory ends. . . . But it does not follow that the power to regulate something includes the power to tax it as a means of regulation. Congressional practice suggests as much. When Congress addresses both the power to regulate and the power to tax, it does so separately and expressly. . . . [T]he power to regulate commerce is “entirely distinct from the right to levy taxes. . . . Tariffs . . . are different in kind, not degree, from the other authorities in IEEPA. [Citations and quotations omitted; emphasis added.]
In fact, the Court added, the part of IEEPA that allows presidents to “regulate” exports would be unconstitutional if it included a tariff power, given that taxing exports is explicitly banned by the Constitution. This is not really a persuasive point, given the background assumption that nobody thinks of creating a power to tax exports, but it’s not really necessary to the Court’s conclusion.
Those ’70s Shows
The Court dispensed with the statutory arguments that sought to invoke the Algonquin and Yoshida precedents from the eve of IEEPA’s passage. As to Yoshida, a lower court precedent not binding on the Court, the majority observed that “while this Court sometimes assumes that Congress incorporates judicial definitions into legislation, we do so only when the term’s meaning was well-settled before the adoption [of the statute]. . . . A single, expressly limited opinion from a specialized intermediate appellate court does not clear that hurdle.” Moreover, Yoshida was based on a war-powers statute, but IEEPA governs peacetime tariffs and was invoked against countries with whom we are at peace — even our allies in ongoing wars.
As for Algonquin, the Court not only distinguished its language but gave the back of its hand to its loose, mid-’70s Thurgood Marshall reasoning:
[In Algonquin,] we held that Section 232(b) of the Trade Expansion Act of 1962, which allows the President to “adjust the imports” of particular goods to protect national security, includes the power to impose “license fees.”. . . But that holding bears little on the meaning of IEEPA. As a textual matter, Section 232(b) authorizes the President not only to “adjust . . . imports,” but (as the Government emphasized in Algonquin) to “take such action . . . as he deems necessary” to adjust the imports of a good…IEEPA does not contain such sweeping, discretion-conferring language. As for context, Section 232(a) states that “[n]o action shall bet aken” to “decrease or eliminate” an existing “duty or other import restriction” if doing so would threaten national security. . . . This explicit reference to duties preceding Section 232(b) renders it natural for Section 232(b) itself to authorize duties. Thus, we decline to extend Algonquin’s expressly “limited” holding any further. [Citations and quotations omitted; emphasis in original.]
Finally, Roberts (as he was at argument) was unusually prickly at Kavanaugh’s invocation of Dames & Moore v. Regan (1981), a case granting broad presidential powers dealing with sanctions in the Iranian hostage crisis — an opinion that everyone seems to assume Roberts drafted as a law clerk. Stressing with multiple quotations how narrow that opinion made its holding, Roberts added, “This is not quite ‘no, no, a thousand times no,’ but should have sufficed to dissuade the principal dissent from invoking the case . . . with respect to the quite distinct legal and factual issues present here.”
Where We Go From Here
The Court didn’t rule that presidents could never use tariffs for regulatory purposes — only that Congress would first need to give the president that power. Has the Court foreclosed Trump from using tariffs? Not at all, but neither did it join Kavanaugh in drawing up a roadmap for how to do so, leaving Trump free to try but without advisory guidance from the Court: Kavanaugh “surmises that the President could impose ‘most if not all’ of the tariffs at issue under statutes other than IEEPA. . . . The cited statutes contain various combinations of procedural prerequisites, required agency determinations, and limits on the duration, amount, and scope of the tariffs they authorize. . . . We do not speculate on hypothetical cases not before us.”
Of course, any future tariffs will be prospective only. Trump may yet be able to defend agreements he made with other countries under the hammer of IEEPA. But his tariff regime now goes back to the drawing board. He should have listened to the people warning him from the rooftops all last year that the IEEPA tariffs were an act of Bidenesque hubris.