Oral Arguments in Tariff Challenge: Supreme Court Finds No Authority Under IEEPA
The Supreme Court has struck down President Trump’s sweeping tariff policies. After declaring a national emergency as to both drug trafficking and trade deficits, the President issued a number of tariffs to deal with the threats on imports from foreign countries, including Canada, Mexico, China to name a few. After these tariffs were challenged, the Supreme Court was tasked with deciding whether or not the President had the authority to impose these tariffs under the International Emergency Economic Powers Act (“IEEPA”). By a vote of 6-3, the Supreme Court found the President does not.
Importantly, Chief Justice Roberts began by stating that the power to tax is clearly vested with Congress and tariffs are very clearly a branch of the taxing power. Never have the framers of the Constitution vested any part of the taxing power in the Executive Branch. Therefore, the President’s alleged authority relies exclusively on the statutory text of the IEEPA.
At the heart of the case is the IEEPA’s language to “regulate…importation.” The Chief Justice, joined by Justices Neil Gorsuch, Amy Coney Barrett, Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson, agreed this does not grant the President the power to impose tariffs under the IEEPA. In focusing on a textual argument and finding a broad definition of “regulate,” the Chief Justice underscores that as broad as it is, the definition still does not include taxation. Further, many statutes use the term “regulate” and yet the Government was unable to identify any other statutes in which the power to regulate included the power to tax.
In part of the opinion, joined only by Justices Gorsuch and Barrett, the Chief Justice found that there was no textual support for President’s reliance on the IEEPA to impose the challenged tariffs under the major questions doctrine. The doctrine provides that in order to support a claim that Congress has granted the executive branch an extraordinary power the executive branch must identify clear authority for that power. Chief Justice Roberts found that when Congress has delegated its tariff powers, “it has done so in explicit terms and subject to strict limits.” The language at issue in the IEEPA, merely to “regulate … importation,” failed to accomplish this, as under the Government’s reading of the statute, the President would have had unilateral authority to impose unbounded tariffs that could result in major economic change and lacked any historical precedent. Under the doctrine, this kind of power cannot be assigned by Congress to another branch without express language supporting that this was Congress’ intent.
In his dissent, Justice Brett Kavanaugh, joined by Justice Samuel Alito and Justice Clarence Thomas, disagreed with the majority’s interpretation of the IEEPA’s language. Justice Kavanaugh found “regulate … importation” did include the power to invoke tariffs, just as much as it allows quotas and embargoes. Justice Kavanaugh relied on the interpretation by Congress and the public of the terms “regulate…importation” at the time the statute was drafted in 1977, which included tariffs. The dissenting opinion also asserts that the major questions doctrine should not apply to statutes dealing with foreign affairs. Additionally, Justice Kavanaugh concluded that the President’s tariff authority still exists under other statutes, and that while his authority to impose tariffs under the IEEPA may be foreclosed, the President may still do so through other means, such as the Trade Expansion Act of 1962, the Trade Act of 1974, and the Tariff Act of 1930.
However, Justice Kavanaugh also warned that the effects of the decision could be substantial in that “[t]he United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs.” The majority opinion did not propose whether or how the federal government should provide refunds to the importers who have paid the tariffs.
It is also worth noting that the various concurrences accompanying the Court’s opinion revealed differences of opinion about the major questions doctrine. For example, Justice Barrett portrayed the doctrine as nothing more than an “ordinary application of textualism,” while Justice Kagan, with Justices Sotomayor and Jackson, contends the doctrine need not be utilized to reach a decision here because “ordinary principles of statutory interpretation lead to the same result.” Justice Gorsuch’s concurrence, on the other hand, provides an analysis supporting the doctrine’s application here and a critique of the concerns raised about the doctrine by the other justices.