Today’s biggest news is the decision of the full, en banc Federal Circuit striking down the bulk of Donald Trump’s tariffs. The court is right. Let’s consider why, and what happens next. Because the court’s order does not go into effect until October 14, it is likely that the case (like today’s Ninth Circuit decision in the Venezuelan immigration case) will be on the Supreme Court’s doorstep before Trump is compelled to comply with any order. Moreover, because the court’s remedy (unlike that of the Ninth Circuit) is based on the equitable powers of courts, it remanded the case to the Court of International Trade to consider the scope of possible remedy under Trump v. CASA Inc.
The main decision striking down the tariffs in May came from the CIT. That decision was appealed to the Court of Appeals for the Federal Circuit. These are Article III federal courts with life-tenured, Senate-confirmed federal judges, but they are specialized courts that do their business in sleepy, technical cases; they are unaccustomed to the national spotlight. The CIT hears trade disputes. The Federal Circuit has a polyglot docket of appeals from three main areas: trade cases from the CIT, federal contracting and takings-of-property cases from the Court of Federal Claims, and patent cases from across the country. As a result, its judges include both trade-law specialists and specialists in its other disparate areas of jurisdiction, such as patent lawyers. The court, with all of its active judges participating, ruled 7-4 against Trump. Judge Pauline Newman, age 98, did not participate, due to her still-controversial and recently upheld suspension, but her vote would not have been decisive.
Tariffs are taxes; they are also trade policy and foreign policy. As such, they implicate a vast array of competing interests in our economy. They also need to be predictable in order that businesses can plan around them. These are all sound reasons why Congress, not the president, decided tariff questions for most of our history, dating back to the Tariff Act of 1789 and the McKinley Tariff of 1890. It’s why Article I, Section 8 begins its enumeration of the powers of the legislative branch by stating that “Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises” — while Article II, listing the powers of the president, says nothing about taxes, tariffs, or foreign trade. As a result, as our editorial laid out in May when the first decisions came down on court challenges to the tariffs, Trump has only those powers in the tariff area that Congress has properly delegated to him by statute.
The bulk of Trump’s headline-grabbing tariffs (the global 10 percent tariff, the country-by-country “Liberation Day” tariffs, and the specifically drug-trade-related tariffs against Canada, Mexico, and China in spite of our existing trade agreements with those countries) were justified by the administration by invoking emergency tariff powers under the International Emergency Economic Powers Act of 1977 (IEEPA). The three judges of the CIT found unanimously, with good reason, that the worldwide and retaliatory tariffs “lack any identifiable limits” and are “unbounded . . . by any limitation in duration or scope” and thus did not fit IEEPA’s statutory definition of an emergency tariff. The decision striking down the fentanyl-trafficking tariffs, while fairly well-reasoned, was by no means as obviously persuasive.
Trump supporters have argued that Congress has delegated broad authorities to the president to set tariffs under a variety of statutes. But each such delegation has different conditions and limitations; what matters is that these tariffs have been justified and defended in court as national emergencies under IEEPA. The courts have been unpersuaded that we live in a state of permanent national emergency that is global in scope and decades-long in duration, requiring swift executive action on the theory that Congress could never assemble in time to address the issue.
As the court noted, it’s not even obvious that the statutory language delegates any tariff power at all. Consider what the statute empowers the president to do:
investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, with-holding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.
As the court observed:
Notably, when drafting IEEPA, Congress did not use the term “tariff” or any of its synonyms, like “duty” or “tax.” There are numerous statutes that do delegate to the President the power to impose tariffs; in each of these statutes that we have identified, Congress has used clear and precise terms to delegate tariff power, reciting the term “duties” or one of its synonyms. In contrast, none of these statutes uses the broad term “regulate” without also separately and explicitly granting the President the authority to impose tariffs. The absence of any such tariff language in IEEPA contrasts with statutes where Congress has affirmatively granted such power and included clear limits on that power.
The administration argued that its authority to impose tariffs comes from “the term ‘regulate . . . importation,’ but it is far from plain that ‘regulate . . . importation,’ in this context, includes the power to impose the tariffs at issue in this case. . . . 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.’” (This is a big red flag before Chief Justice John Roberts.) As the court noted, there are all manner of statutes by which Congress granted the executive branch regulatory powers while retaining to itself the taxing power.
Because “tariffs are a core Congressional power,” it should not be lightly presumed from vague language that the president was given broad discretion in that area. This is a distinct set of reasons from those cited by the CIT, but no less persuasive. Three concurring judges, while joining the opinion, added their concern that Trump’s “interpretation of IEEPA would be a functionally limitless delegation of Congressional taxation authority,” which would present serious constitutional questions — a position for which they invoked the views of Justice Neil Gorsuch.
Nearly half of the 127-page length of the opinion was taken up with the views of the four dissenters, who agreed that the court could properly hear the case but vigorously disagreed with its view of the legality of the tariffs. The dissenters argued that the tariffs “meet the preconditions IEEPA sets for the exercise of the presidential authorities that IEEPA grants—requiring that measures adopted be imposed to deal with an unusual and extraordinary threat, having foreign sources, to the national security or foreign policy or economy of the United States, the threat declared as a national emergency (lasting one year unless renewed).” The dissent is a grab bag of justifications that will deserve more extended discussion another day, but it is grasping at straws to justify an open-ended “national emergency” power of the sort that should be disfavored in our laws unless it is granted in terms far more explicit than these.