On the day before President Donald Trump's next set of tariff hikes is set to materialize, a federal appeals court will grapple with the big, unanswered question underpinning the president's aggressive and unprecedented trade policies.
Does he really have the power to do this?
On Thursday morning, the U.S. Court of Appeals for the Federal Circuit will hear oral arguments in a case that could determine the fate of the Trump tariffs—or clear the way for a huge expansion of executive control over economic affairs. The administration is appealing a May decision from the Court of International Trade (CIT), where judges unanimously sided with a collection of small business owners and state attorneys general who challenged the president's use of emergency powers to impose tariffs on nearly all imports.
At the center of the case is the International Emergency Economic Powers Act (IEEPA), the 1977 law that the Trump administration used in February to slap tariffs on imports from Canada, China, and Mexico. The Trump administration again invoked IEEPA to impose its so-called "Liberation Day" tariffs in early April, which included a universal 10 percent tariff on all imports and higher, country-specific tariffs, some of which are set to go into effect on August 1 after being delayed several times.
In May, the CIT ruled that Trump had overstepped the authority granted by the emergency powers law. "We do not read IEEPA to delegate an unbounded tariff authority to the president," the judges said in a unanimous opinion. "We instead read IEEPA's provisions to impose meaningful limits on any such authority it confers."
The Trump administration appealed that ruling, and the U.S. Court of Appeals for the Federal Circuit placed a temporary stay on the lower court's ruling, allowing the tariffs to remain in force until the appeals court has a chance to review the case.
In its brief to the appeals court, the administration argues that the lower court "erred in concluding that IEEPA did not authorize the [Liberation Day] reciprocal tariffs" and that the president's claim of a claimed emergency—related to the importation of fentanyl—should be sufficient to allow the tariffs on Canada, China, and Mexico.
The court should begin by being quite skeptical of that emergency claim, which rests on the idea that tariffs on legal imports will somehow help to stop the flow of illegal drugs across the border.
Then, the judges should dig into some of the bigger questions raised by Trump's expansive use of the IEEPA law.
"The government asserts that the President has broad and unreviewable power to impose tariffs whenever and however he chooses, merely by declaring an emergency," wrote attorneys working with the Liberty Justice Center to represent some of the plaintiffs in a brief filed with the court. In that same brief, those attorneys (including Ilya Somin of The Volokh Conspiracy) argue that the Constitution clearly gives tariff powers to Congress, and that the IEEPA does not delegate the authority for imposing these sweeping tariffs.
"Nor could a statute grant such unbounded tariff authority without violating the separation-of-powers principles on which our Constitution is based," they conclude.
Indeed, Trump's universal tariffs seem to go well beyond even the more liberal reading of the IEEPA statute. In an amicus brief filed last month, attorneys from the Cato Institute pointed out that the IEEPA law "contains no reference to 'tariffs' or 'duties,' and no President had cited it to impose tariffs in the nearly 50 years since its enactment—until now."
It is true, of course, that Congress has delegated wide swaths of trade policy to the executive branch over the course of many decades—in laws like the Tariff Act of 1922, the Tariff Act of 1930, the Trade Expansion Act of 1962, and the Trade Act of 1974.
"IEEPA, by contrast, was enacted to limit executive power, not expand it," the Cato brief argues. "Courts should not credit interpretations of vague statutory texts that, for the first time in decades, are 'discovered' to confer vast economic powers on the President."
As Reason's Jacob Sullum has previously noted, the arguments made by both the Liberty Justice Center and Cato are rooted in the major questions doctrine, which says the executive branch can only exercise powers that Congress has explicitly granted, and the nondelegation doctrine, which says Congress may not cede its legislative powers to another branch of government.
When it ruled in May, the judges at the CIT also nodded to both of those legal doctrines when explaining their rationale for striking down the tariffs. "Regardless of whether the court views the President's actions through the nondelegation doctrine, through the major questions doctrine, or simply with separation of powers in mind," the judges at the CIT wrote, "any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional."
Ironically, the Trump administration now finds its attempt to greatly expand executive power over the economy at odds with a pair of legal theories that the conservative movement has spent years trying to revive within the federal court system, often as a mechanism to limit executive encroachments into legislative powers and the economic realm.
Regardless of what happens in Thursday's oral arguments or the appeals court's eventual ruling, it seems likely that this case (or another case working its way through a different set of federal courts) will end up in front of the U.S. Supreme Court. Still, this week figures to be a pivotal one, with Trump preparing to levy even more tariffs while the legal and constitutional mechanisms for doing so remain very much in doubt.
The post Can Trump Use Emergency Powers To Tax All Imports? His Tariffs Are Back in Court on Thursday. appeared first on Reason.com.