The Trump administration must cross a minefield without a misstep in order to uphold its tariffs.

W ith the Supreme Court ordering on Tuesday evening that it is taking up the Trump tariffs case on an accelerated timeline, it is worth stepping back to assess the strength of the arguments and how they may be received by the Court. Andy McCarthy has argued that the Federal Circuit’s decision was not the rout for Trump that it appeared. While I agree with Andy’s cautions about overconfidence in predicting how the case will shake out at the Court, I have a somewhat different take on how little Trump’s lawyers may be able to salvage out of that opinion as it reaches the Court.

On to the Merits

First, it’s important in any high-profile case that reaches the Court to ask whether we are skipping too hastily over procedural barriers that might lead the justices to end up ducking the merits question, which in this case is whether Trump has the legal authority to impose the tariffs at issue. Some of the justices, such as Chief Justice John Roberts and Justice Amy Coney Barrett, are particular sticklers about not skipping over matters of process to hastily reach the legal merits of big decisions if there’s a case to be made that the courts are overstepping their bounds. Reviewing the posture of this case, however, it is likely that the Court will reach the merits of whether the International Emergency Economic Powers Act of 1977 (IEEPA) gives the president the powers he claims.

There’s no serious question of standing to sue, what with the tariffs being challenged by companies directly affected by them, and none of the judges below (eleven Federal Circuit judges, three on the Court of International Trade (CIT), and one federal district judge in D.C.) thought that standing was a problem. The same is true for whether the case involves a nonjusticiable political question or one that could not be remedied by the courts. This isn’t, say, a question of presidential war powers; because presidents have no power to tax unless Congress gives it to them, the case is about the scope of a congressional delegation of taxing power. Reading statutory powers is the very heartland of what courts do.

One issue that was hotly contested in the lower courts was jurisdiction: Does a federal statute direct that this case belonged in the CIT because it involves tariffs? That question divided the lower courts: The CIT and the Federal Circuit said yes, but the district court concluded that it had jurisdiction. They can’t both be right — but it is extraordinarily difficult for the administration to argue simultaneously that they are both wrong and jurisdiction is . . . nowhere. The Court, by granting certiorari in the appeals from the CIT and district court cases together, has boxed in the administration’s ability to maneuver on jurisdiction.

To the extent there is a looming process issue in the case, it’s the one that concluded the Federal Circuit’s opinion: the scope of any injunction, which must proceed from the equitable powers of the federal courts that were limited by the Court in Trump v. CASA, Inc. But if the Supreme Court decides that the tariffs are unlawful, it is of little practical importance whether it enters a nationwide injunction, because it has settled the legal question; anyone who objects to paying the tariffs can easily get relief.

Finally, there’s one question I confess I haven’t yet looked into, which is what remedies would be available for companies that have already paid the tariffs to get a refund. But it’s unlikely that the Court would say much on that issue, which is apt to generate follow-on litigation if the administration loses.

The Yoshida Problem

Now, the merits. Andy argues that the breadth of the Federal Circuit’s ruling has been overstated by reporting on the case:

Yes, the Trump tariffs “lost” the case, 7–4. But guess what? If you hold my position that [IEEPA] . . . endows presidents with no tariff authority, the court ruled against you, 7–4. . . . The split is elucidated by the concurring opinion (held by four judges: three Democratic appointees and one Republican appointee), which concluded that the IEEPA contains no presidential tariff authority, full stop. These four judges combined with three others (all Democratic appointees) who rejected the Trump tariffs even though they reasoned that the IEEPA may in fact provide the president with tariff authority. The quarrel of this trio was not with the concept of IEEPA-based tariffs; it was with the arbitrariness and scope of the Trump tariffs — any amount, any time, any duration, suddenly surged, just as suddenly slashed or postponed, and utterly bereft of process.

Much of the confusion on this point turns on the Federal Circuit majority’s reading of United States v. Yoshida Int’l, Inc. (1975), a decision by the Court of Customs and Patent Appeals (CCPA; the predecessor to the Federal Circuit) upholding Richard Nixon’s 1971 “emergency surcharge” on foreign trade. (The Federal Circuit refers to the Yoshida decision as Yoshida II to distinguish it from the lower court decision in the case; for simplicity, I just refer to it even in quotes from that court as Yoshida).

The short history here is that Nixon declared an emergency based upon a “balance of payments” deficit — effectively, an argument similar to Trump’s invocation of the trade deficit as an emergency — and slapped a temporary global tariff of up to 10 percent, under the title of a “surcharge.” The predecessor to the CIT struck that down, but the appeals court upheld it. As is the case here, the statute invoked by Nixon, the Trading with the Enemy Act (TWEA), spoke of presidential power to “regulate” trade and did not explicitly authorize tariffs or any synonym for tariffs.

Now, it’s important to recall a few things about Yoshida. First, it’s an appellate court opinion, so the Supreme Court isn’t bound by it as a precedent. In fact, as the Federal Circuit noted, its own internal rules do not require it, when sitting en banc with all of its active judges, to follow precedents of a panel of the CCPA. Second, the case involved a different statute, the TWEA, with distinct language, and today’s Supreme Court does not read statutes in the same open-ended way that appeals courts did in the 1970s. Both of those considerations cut against the Court caring very much about Yoshida.

The government’s stronger argument for relying on Yoshida is not that the courts should respect it as a precedent, but that the IEEPA was enacted two years after the Yoshida decision by a Congress that was clearly aware of Yoshida and thus arguably ratified its reasoning. That, at least, is a legitimate theory for taking Yoshida seriously. But it doesn’t get the administration where it needs to go.

Yoshida was broad in its language, but modest in its facts. The court framed the statutory question as “whether Congress, having itself regulated imports by employing duties as a regulatory tool, and having delegated to the President, for use in national emergencies, the power to regulate imports, intended to permit the President to employ the same regulatory tool, and what, if any, limitations lay upon his use thereof.” Much of the court’s answer to that question derived from tracing the history of the TWEA, enacted in 1861, and its amendment in 1933 and 1941. But it also hung its conclusion heavily on the catchall statutory phrase “or otherwise”:

If the phrase [regulate] “by means of instructions, licenses or otherwise” [in the TWEA] defines the nature and mode of the regulatory authority intended to be delegated to the President, it does so very broadly indeed. The phrase appears to us to be expansive, not restrictive. The words “or otherwise,” if they mean anything, must mean that Congress authorized the use of means which, though not identified, were different from, and additional to, “instructions” and “licenses.” Congress, by its use of “or otherwise,” signaled its intent not to bind the President into “instructions” or “licenses,” or into any other pre-specified means which might preclude his dealing with a national emergency and defeat the purpose of the legislation. . . .

We do not find it surprising that Congress did not specify that the President could use a surcharge in a national emergency. Having left the battlefield, it would hardly do to dictate all the weapons to be used in the fight. [Quotations omitted.]

Now, first of all, as we saw in Fischer v. United States, today’s Court doesn’t read the word “otherwise” quite so broadly anymore. But also, IEEPA doesn’t include the crucial term; it empowers the president to “investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit” any of the types of foreign transactions it lists. [Emphasis added.]

As in Fischer and other statutory-construction cases, that argues against reading “regulate” in such a broad fashion that it renders the whole rest of the list of specified means of regulation redundant.

By contrast, the Yoshida court looked at what Nixon had actually done in considering the constitutionality of his actions. Notably, the Yoshida court found that there was an “intelligible principle” permitting the delegation — as required by the nondelegation doctrine — simply in the fact that it applies only in declared emergencies. That conclusion that would be unlikely to hold much water these days. The Yoshida court, however, also protested that its holding was limited to what Nixon did, and that “the declaration of a national emergency is not a talisman enabling the President to rewrite the tariff schedules, as it was not in this case.”

Those facts were considerably more closely tethered than here to tariffs enacted by Congress. Nixon simply went through congressionally enacted tariffs that had been scaled back by trade agreements, and restored the congressional rates. The court found that this favored a finding of constitutional fidelity to what Congress had previously done:

The surcharge was limited to articles which had been the subject of prior tariff concessions and, thus, to less than all United States imports. . . . With respect to some articles the surcharge could result in the precise statutory duty set by the Congress. . . . With respect to those articles on which no concession had been granted, the congressionally established rates remained untouched. . . . Far from attempting, therefore, to tear down or supplant the entire tariff scheme of Congress, the President imposed a limited surcharge, as “a temporary measure” . . . which is quite different from imposing whatever tariff rates he deems desirable. [Quotation and citation omitted.]

It’s not terribly principled to uphold delegations of authority that are used reasonably in ways anticipated by Congress, but strike down those that take the delegation and run the length of the field with it. Either the delegation is proper, or it is not. But if it’s not principled, it’s very human. Trump, unlike Nixon, has not given the courts even a fig leaf with which to cover his assertion of power.

What the Federal Circuit Majority Did

I think Andy’s framing of the Federal Circuit’s breakdown overstates a bit how warmly the seven-judge per curiam opinion received the argument that IEEPA contains any tariff authority at all. To start with, the four concurring judges who concluded that it does not contain such a power joined the per curiam opinion in its entirety. They didn’t only write separately to argue as a textualist matter that IEEEPA contains no tariff power; they also added the argument that the per curiam opinion didn’t address that if IEEPA did delegate such powers, it would be unconstitutional in violation of the nondelegation doctrine. But the fact that they joined the majority without reservation suggests that it’s not so inconsistent with their principled argument.

The majority took pains — many of them quoted at length in my column, and Dominic’s, and our editorial — to explain how IEEPA omits the words one finds in statutes granting the power to impose tariffs, and why the statutory term “regulate” does not necessarily incorporate the power to tax:

Taken together . . . other statutes indicate that whenever Congress intends to delegate to the President the authority to impose tariffs, it does so explicitly, either by using unequivocal terms like tariff and duty, or via an overall structure which makes clear that Congress is referring to tariffs. This is no surprise, as the core Congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution; when Congress delegates this power in the first instance, it does so clearly and unambiguously.

Contrary to the Government’s assertion, the mere authorization to “regulate” does not in and of itself imply the authority to impose tariffs. The power to “regulate” has long been understood to be distinct from the power to “tax.” In fact, the Constitution vests these authorities in Congress separately. . . . While Congress may use its taxing power in a manner that has a regulatory effect . . . the power to tax is not always incident to the power to regulate. [Citations omitted.]

“Even in the context of international trade,” the court added, “apart from the decision in Yoshida, the Government has not pointed to any statute or judicial decision that has construed the power to regulate as including the authority to impose tariffs without the statute also including a specific provision in the statute authorizing tariffs.”

Given the emphatic and persuasive terms in which this argument was presented by the per curiam opinion, why did it nonetheless open by insisting that the court was not “deciding whether IEEPA authorizes any tariffs at all?” Why did its analysis keep going? One reason is because the court cited the major questions doctrine as support, and presidential power to impose some very limited or short-term tariffs might not be a major question, but tariffs this large and open-ended are. But the larger reason seems simply to be that the per curiam majority was bending over backwards to explain why “today’s case does not require us to decide whether to overrule Yoshida.”

Judges and lawyers sometimes lay it on too thick when they are distinguishing a precedent that they aren’t willing to openly overturn or disregard. The Federal Circuit might have believed that Yoshida was wrong, but it was focused on explaining why it didn’t think that it mattered even if Congress in the IEEPA was somehow endorsing Yoshida. That’s the most likely reason why the court would say something like this:

Even if we assume, as the Government urges, that Congress intended to ratify Yoshida when it enacted IEEPA, we still must consider what it is that Congress ratified. Yoshida does not broadly conclude that “regulate . . . importation” must be read to include any type of tariff imposition. In fact, it held the opposite. The CCPA’s reasoning in Yoshida was expressly premised on the limits of President Nixon’s Proclamation….The CCPA explicitly contrasted presidential conduct it found permissible within the power granted by TWEA — a temporary measure, calculated to help meet a particular national emergency that is limited in scope and amount — with conduct it found impermissible under TWEA — imposing whatever tariff rates the President deems desirable.

The Government would have us define “regulate . . . importation” to include only the portion of Yoshida authorizing tariffs and ignore the rest of its holding. But if . . . we are to presume that Congress intended for the holding of Yoshida to apply to the newly enacted IEEPA, then we must presume that it intended for the court’s entire holding to apply, not just the portion favorable to the Government. And because Yoshida was explicit in its view that an unbounded tariff authority would not be permitted, that understanding must be attributed to Congress as well.

Accepting the Government’s argument as correct — that Congress ratified Yoshida’s conclusion that “regulate . . . importation” could include the power to impose tariffs — we still must conclude that the Challenged Executive Orders in this case exceed the authority provided by that interpretation of IEEPA. Both the Trafficking Tariffs and the Reciprocal Tariffs are unbounded in scope, amount, and duration. . . . The Trafficking and Reciprocal Tariffs assert an expansive authority that is beyond the express limitations of Yoshida’s holding and, thus, beyond the authority delegated to the President by IEEPA.

This was unnecessary, but at no point does the per curiam opinion even hint that “regulate” includes the power to impose tariffs, as a textual matter. It just argued that even if you don’t overrule Yoshida and even if you assume that IEEPA incorporates Yoshida into its background assumptions of delegated presidential power (notwithstanding that the statute was part of a series of limitations on the Nixon-era emergency powers of the presidency), it still doesn’t get Trump where he wants to go.

None of this carries any persuasive force that is apt to get votes with any justices other than possibly Justice Elena Kagan (whom Andy is right to peg as the one liberal who may be sympathetic to broad claims of executive power) and maybe Justice Brett Kavanaugh.

As for the rest of the justices? The other two liberals are hardly in a mood to side with Trump. Roberts, a great believer in administrative process, is unlikely to warm to the idea that the president has been given the power to set tariffs by whim. And the conservatives would have to go back on their textualist principles for no better reason than to venerate the jurisprudence of the 1970s. Justices Neil Gorsuch and Clarence Thomas, in particular, are rarely inclined to embrace vast delegations of unconstrained powers to the executive branch.

After all of that, there remains not only the concurrence’s nondelegation arguments but also the CIT’s distinct conclusion that the president can’t just declare an open-ended, worldwide emergency based upon decades-old trade deficits. It may be that the conservatives are tempted to defer to the president’s judgment of what is and isn’t a foreign emergency — but the desire to avoid second-guessing that may be an even further spur to stick to their textualist guns, as did the Federal Circuit’s per curiam opinion.