Trump’s Tariffs Could Put the Supreme Court in a Major Bind
Earlier this month, President Donald Trump announced that he would impose major tariffs against most of the United States’ top trading partners. He later put a 90-day “pause” on some of the most eye-popping tariffs, but America is now levying a 10 percent tariff on all countries—and 145 percent on China. The stock market has spiraled. Businesses in nearly every sector are prepping for price hikes and layoffs. Foreign investors are withdrawing capital from the American economy at unprecedented rates. A recession is now more likely than not.
Was “Liberation Day,” as the Trump administration framed it, actually legal? Two new lawsuits argue in the negative. Plaintiffs ranging from a libertarian legal group to the state of California have filed separate challenges to Trump’s tariffs, invoking legal and constitutional doctrines that should—at least in theory—be well-received among the Supreme Court’s conservative majority.
At issue is the administration’s interpretation of the International Emergency Economic Powers Act, which the White House cited as the source of the president’s authority for the myriad tariffs he has imposed this year. Congress enacted IEEPA in 1977 as a comprehensive update of various laws that since the 1910s had allowed presidents to regulate some aspects of international trade, initially during wartime and later during national emergencies.
Under IEEPA, presidents have broad powers to regulate foreign currency exchanges, investigate and suspend international bank transfers, and to “investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit” any foreign property sales or transactions within U.S. jurisdiction. These powers can only be invoked, according to the statute, to “deal with any unusual and extraordinary threat ... to the national security, foreign policy, or economy of the United States” that is at least partly foreign when the president declares a national emergency.
What counts as a “national emergency,” however, is entirely up to the president’s discretion. Congress may have originally intended the Cold War–era law to be used against serious threats to national security from foreign adversaries. Trump has interpreted it far more loosely to target some of the United States’s closest allies and trading partners. When, during Trump’s first term, then-Canadian Prime Minister Justin Trudeau asked him about the national-security rationale for steel tariffs against Canada, Trump reportedly replied, “Didn’t you guys burn down the White House?”—a reference to the War of 1812.
Trump’s has declared national emergencies to justify tariffs during his second term as well. In February, Trump cited the fentanyl epidemic when imposing tariffs on Canada, China, and Mexico. “This was done through the International Emergency Economic Powers Act (IEEPA) because of the major threat of illegal aliens and deadly drugs killing our citizens, including fentanyl,” he wrote on his private social-media website at the time. “We need to protect Americans, and it is my duty as president to ensure the safety of all.”
In its “Liberation Day” announcement this month, the White House simply said that “foreign trade and economic practices” allowed him to invoke IEEPA. An administration fact sheet argued that the “large and persistent trade deficit that is driven by the absence of reciprocity in our trade relationships and other harmful policies like currency manipulation and exorbitant value-added taxes (VAT) perpetuated by other countries” amounted to a “national emergency” that justified the tariffs.
One of the lawsuits, VOS Selections v. Trump, comes from a coalition of small businesses that say they will be severely impacted by the new tariffs. The plaintiffs include a wine and spirits distributor in New York that imports bottles from around the world, a Utah pipe-fitting company that relies on raw materials and equipment from various Asian countries, and other small businesses that say they can’t reasonably obtain the goods from U.S. sources.
The lawsuit challenges the tariffs on two levels. First, they argued, Trump’s actions were illegal because IEEPA does not actually authorize the president to impose tariffs. Under Article I of the Constitution, Congress has the sole power to “lay and collect taxes, duties, imposts and excise” from “foreign commerce,” and nothing in IEEPA’s text indicates that Congress broadly granted that power to presidents. They cited other statutes where Congress had narrowly granted presidents the power to raise and lower tariffs in certain circumstances as proof that it had not done so with IEEPA.
The VOS Selections plaintiffs also disputed that the “national emergency” that Trump cited was a national emergency at all. “Trade deficits are not unusual or extraordinary—the United States has run a net trade deficit at most times since World War II, and consistently since the 1970s,” they explained. “Nor are trade deficits an emergency or even necessarily a problem; they simply mean that some other country sells lots of things Americans want to buy, or that its people are unwilling or unable (often because of poverty) to purchase many American goods.”
Alternatively, the plaintiffs challenged IEEPA on constitutional grounds, in the event the court disagrees with their statutory ones. They argued that if IEEPA does grant Trump the sweeping power over foreign trade that he has claimed, then it violates the nondelegation doctrine. That largely moribund constitutional principle generally forbids one branch of government from delegating its powers to another branch.
“Even if IEEPA did grant the President the broad, standardless discretion he claims—which it does not—and had done so clearly enough to satisfy the major questions doctrine—which it has not—it would be an unlawful delegation of legislative authority without any intelligible governing principle,” they argued. “If there are any constitutional limits to delegation at all, they apply here, in a case where the executive claims virtually limitless authority to impose massive tax increases and start a worldwide trade war.”
Where those limits fall is a recurring issue in modern constitutional law. While the Supreme Court used the doctrine to strike down some laws in the early twentieth century, it has not struck down a law on nondelegation grounds since invalidating some of the New Deal legislation in the 1930s. Since then, the justices have fallen back on Chief Justice William Howard Taft’s reasoning in a 1928 case that upheld Congress’s delegations of regulatory power so long as lawmakers lay out an “intelligible principle” to guide the executive branch.
Some conservative legal scholars and jurists have urged the Supreme Court to revive the doctrine and widen its scope to dismantle the federal regulatory agencies that they describe as the “administrative state.” A few of the justices have also seemed interested in this project at times. But it has yet to command five votes even on this iteration of the high court, perhaps because of the severe consequences that a revived nondelegation doctrine would bring.
Liberal justices have frequently warned that enforcing a hardline boundary between the executive and legislative branches would have serious consequences. In a 2019 case involving a federal sex-offender law, four of the court’s conservative members supported invalidating the authority Congress had given to the attorney general on nondelegation grounds. Justice Elena Kagan countered in her majority ruling that if the law in question “is unconstitutional, then most of government is unconstitutional.”
The high court has not seriously considered a nondelegation argument since then despite many requests to do so in petitions for review. But it has worked to achieve the same goal through different means. In recent years, the Supreme Court has blocked a variety of rules and regulations by invoking what it calls the “major questions doctrine.” The newfangled tool allows the court to invalidate a federal regulation if it thinks Congress did not “speak clearly” enough to authorize it by statute. The doctrine’s premise is that lawmakers must be unambiguous if they intend to let agencies regulate on questions of “vast economic and political significance.”
Since Congress often writes laws in broad terms, the conservative justices have granted themselves a vague, freestanding veto over federal regulatory powers if five justices wish to split enough hairs about an agency’s statutory authority. The major-questions doctrine is best understood as a conservative ideological project than a legitimate method of reading federal laws. I noted in January that the court had invoked it to block regulations under the Obama and Biden administrations, but not during Trump’s first term—and it certainly wasn’t for lack of opportunities.
Will that change this term? In a separate lawsuit filed on Thursday, the state of California also sought to challenge Trump’s IEEPA tariffs. “These tariffs have disrupted supply chains, inflated costs for the state and Californians, and inflicted billions in damages on California’s economy, the fifth largest in the world,” Governor Gavin Newsom’s office said in its announcement. Its central argument was that Trump’s tariffs violated the major-questions doctrine.
“In our constitutional system, the President may not rule by fiat,” the state argued in its complaint. As with the VOS Selections lawsuit, California argued that Trump had gone far beyond what Congress had authorized. “President Trump cites IEEPA as the basis for his authority to issue the IEEPA Tariff Orders,” it explained. “But IEEPA does not authorize President Trump to issue the tariffs he has imposed. Rather, IEEPA was enacted by Congress as part of a series of reforms to limit presidential authority and to prevent presidential abuse of power.”
California also quoted from Biden-era rulings on executive power to argue against Trump’s claimed authority. “The ‘economic and political significance’ of the highly novel tariffs that President Trump has imposed is ‘staggering by any measure,’” the state argued. “And the proposed tariffs of such a scale represent an ‘unheralded’ and ‘transformative expansion’ of presidential authority.” Indeed, it would be hard to imagine a more “vast” instance of vague executive power than the massive tariffs Trump imposed on a whim this month.
The lawsuit itself does not mention the major-questions doctrine but it unmistakably invokes it. California’s approach is also much narrower than the VOS Selections lawsuit, which raises nondelegation questions that the justices have recently sought to avoid. Either case would give them the opportunity to reaffirm their ideological approach to the separation of powers, this time at the request of small businesses and the most liberal state in the nation.
In theory, these arguments should prove highly persuasive for a Supreme Court that has often second-guessed the executive branch in favor of business interests. The only question is whether the justices—and, in particular, the conservative justices—are willing to confront Trump on one of his flagship domestic policies when the cases reach them. How the court approaches urgent disputes over birthright citizenship and Salvadoran gulags should shed more light on how far its willing to let Trump go.