Trump’s Tariff Fantasy Just Exploded
President Donald Trump’s sweeping, global “Liberation Day” tariffs are dead. The outcome wasn’t tough to foresee — Trump had already lost twice in the lower federal courts, and the Supreme Court clearly leaned against him at oral argument – but the ruling hits the administration like a bomb.
The cross-ideological composition of the majority here stands as a sharp rebuke both to Trump and to those who glibly bemoan that this conservative Court always gives Trump everything he wants. In the six-Justice majority, three conservatives — Chief Justice John Roberts and Justices Neil Gorsuch and Amy Coney Barrett – joined forces with liberal Justices Elena Kagan, Sonia Sotomayor, and Ketanji Brown-Jackson. Gorsuch and Barrett — two of the three Justices appointed by Trump himself – stood against him here. (The third, Justice Brett Kavanaugh, joined fellow conservatives Clarence Thomas and Samuel Alito in spirited dissent.) The president lost two-to-one among his own appointees.
The Court’s opinions run over 170 pages in total. Here’s the gist: the Constitution gives the tariff power solely to Congress. But Congress can choose (and has chosen at various points in history) to delegate some of that tariff authority, through legislation, over to the president.
Here, Trump invoked the 1977 International Emergency Economic Powers Act (“IEEPA”) to impose tariffs on nearly every other country on the globe – some as low as 10 percent, others as high as 49 percent (subject to frequent, massive, spontaneous revisions).
But, the Court held, the IEEPA simply doesn’t work here. First, as the Court noted, that law says nothing specifically about tariffs — and no president before Trump had ever attempted to use the IEEPA to impose tariffs. And, under the recently-recognized “Major Questions” doctrine, if Congress intends to give the president (any president) the power to take actions of massive economic or political import, then Congress must say so specifically in the text of the law. The IEEPA contains no such authorization for global tariffs.
This was a what-goes-around moment for the Court and the presidency. The Court had, in recent years, deployed the same Major Questions principle to strike down vital Biden administration initiatives, including student debt relief and environmental regulation. It would’ve taken Olympic-level contortions to differentiate between the Biden-era programs and Trump’s tariffs — which, if anything, have even greater reach. Roberts, Gorsuch, and Barrett chose to remain consistent in applying the principle across partisan and policy lines. (The liberal justices disdained “Major Questions” doctrine when it undercut Democratic policy priorities, but they’re seemingly fine with it now, though they avoided expressly endorsing it in the tariff decision; the same goes for Thomas, Alito, and Kavanaugh, in reverse.)
Trump took his loss graciously and in stride. Kidding; he flipped out. The president immediately called the ruling a “disgrace” and decried “these f***ing courts.” (As I write this, we haven’t yet seen the inevitable furious social media post, but you know it’s coming.)
This isn’t over. Two major crucibles lie ahead.
First, Trump already has vowed that he will try again, turning to “Plan B” to impose new tariffs under different laws. He certainly can try, but other laws that permit presidential imposition of tariffs are generally limited in scope and duration, and often require consultation with Congress. Trump will find no statute that empowers him to unilaterally impose massive, global tariffs like those he sought to enact under the IEEPA. And tariff opponents, emboldened by today’s win, surely will charge right back into the federal courts to challenge any new tariffs.
Second, what happens with the hundreds of billions of dollars in tariffs already paid by U.S.-based importers? As of mid-December, the government had collected over $130 billion pursuant to Trump’s tariffs, and the number likely exceeds $200 billion now. We currently have no answer. The majority in today’s ruling dodges the question altogether (although it did come up repeatedly at oral argument). And Kavanaugh notes in dissent that the process will be “a mess.” He’s surely correct.
The most likely scenario is that U.S.-based importers who have paid tariffs – like Learning Resources, Inc., the lead challenger whose name will live in history on this case caption – will file a slew of lawsuits seeking refunds in federal district courts. Those cases will make their way up through the various circuit courts of appeals and, potentially, all the way back to the Supreme Court for a round two of sorts.
Trump loves his tariffs. “Tariff” is “the most beautiful word,” he kvells. And, in typically self-congratulatory, factually-dubious fashion, he credits his tariff policy for creating an “American economic miracle.” But like so many miracles, this one was illusory.
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