25/11/05
US high court questions Trump's tariff powers
Washington, 5 November (Argus) — President Donald Trump's legal rationale for
tariffs targeting major US trading partners ran into a skeptical review during a
Supreme Court hearing on Wednesday, including from the justices appointed by
him. The high court heard an appeal of two decisions by lower courts that found
Trump's administration has overstepped its authority by placing emergency
tariffs on most goods imported into the US. Trump has cited a 1977 law called
the International Emergency Economic Powers Act (IEEPA), which previous
presidents only used to impose targeted economic sanctions, to impose tariffs on
all US trading partners. IEEPA omits references to tariffs. But the Trump
administration justifies imposing them by citing two words in the text of the
law — that "regulation" of "importation" is among the possible measures that the
president can take to address an economic emergency. Tariffs are a foreign
policy issue, which the Constitution delegates to the executive branch,
solicitor general John Sauer argued on behalf of the administration. Tariffs are
not a tax but a regulatory tool, Sauer said. The revenue from tariffs is
incidental to the exercise of Trump's regulatory power in foreign policy domain,
Sauer said. Both liberal and conservative justices challenged those arguments.
Trump's reliance on a law never before used to impose tariffs raises the "major
questions doctrine", said Chief Justice John Roberts, a conservative. Roberts
was referring to recent Supreme Court decisions, which state that it is up to
Congress to decide prominent questions of economic significance. The president
has a constitutionally granted authority over foreign policy but in this case,
he exercised it by imposing "taxes on Americans, and that has always been the
core power of Congress," Roberts said. The possibility that future presidents
would use tariffs to advance unrelated policy priorities featured prominently in
questions from the bench. "Could the president impose a 50pc tariff on
gas-powered cars and auto parts to deal with the 'unusual and extraordinary
threat' from abroad of climate change?", conservative justice Neil Gorsuch
asked. Sauer acknowledged that the scenario was "highly likely", albeit not
under Trump, as "this administration would say 'that's a hoax.'" The legal
argument advanced by Trump means that former president Joe Biden could have
declared a climate emergency, imposed tariffs and then used the tariff revenue
for his student loan relief program, liberal justice Sonia Sotomayor said.
"That's all Biden would have had to do with any of his programs." Gorsuch also
challenged the government's argument that Congress can at any time remove the
power of the president to impose tariffs under emergency authorities. "Congress,
as a practical matter, can't get this power back once it handed it over,"
Gorsuch said. An extension of presidential powers can be enacted with a simple
majority but has to be removed by a veto-proof majority, Gorsuch said. "It's a
one-way ratchet toward the gradual but continual accretion of power in the
executive branch and away from the people's elected representatives." The legal
cases before the court pit the Trump administration against a group of private
companies and, separately, a coalition of states, who argued that IEEPA does not
explicitly authorize Trump to use the tariffs he imposed. Conservative justice
Brett Kavanaugh indicated that he would be open to defending the presidential
authority to impose tariffs in at least some specific emergency situations,
citing Trump's imposition of a 25pc tariff on imports from India in a bid to
stop Indian purchases of Russian oil. Next steps The Supreme Court could take
weeks, if not months, to make a decision. Trump's preferred outcome is for the
high court to overturn the lower courts' decisions and keep the tariffs he
imposed in place. "With a Victory, we have tremendous, but fair, Financial and
National Security," Trump posted ahead of the hearing. "Without it, we are
virtually defenseless against other Countries who have, for years, taken
advantage of us." If the Supreme Court decides to keep the lower courts'
decisions in place, Trump's administration would have to immediately lift the
so-called "fentanyl" tariffs affecting Canada, Mexico and China and the
so-called "reciprocal" tariffs of 10pc and higher, in place since 5 April on
nearly every US trading partner. The courts' decisions will not affect tariffs
Trump imposed on imports of steel, aluminum, cars and auto parts, as the
administration has used other, unequivocal legal trade authorities. The Supreme
Court would separately have to decide what to do about the revenue collected
from emergency tariffs. One of the lower courts ordered that the defendants who
challenged tariffs in courts must receive refunds, while another court ordered
that all importers must receive refunds. The US government's tariff revenue ran
at about $30bn/month as of August, according to an estimate by the Federal
Reserve Bank of New York. By Haik Gugarats Send comments and request more
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