On Wednesday, President Donald Trump’s “Liberation Day” collided with deliberation day in the courts, and it did not go well. The Court of International Trade ruled that the President lacks the authority to impose his massive tariffs worldwide.
But all is not lost for Trump’s tariffs.
The three-judge panel held that the International Emergency Economic Powers Act of 1977 (IEEPA) does not give the president “such unbounded authority.”
While some have criticized the court as a “judicial coup,” it is a well-reasoned and good-faith decision from judges appointed by Presidents Ronald Reagan, Barack Obama, and Trump.
While the court, in my view, should have issued a stay pending appeal, a wide array of experts have questioned the authority under the IEEPA, which is designed to address a national emergency. The authority does not mention tariffs and has never been used for tariffs. There’s a good chance the Supreme Court upholds the ruling.
The Trump administration is now appealing and pushing for a stay to prevent this ruling from having a disruptive impact on the nearly completed array of trade deals.
Rejecting Trump’s authority under IEEPA does not mean he lacks all authority for tariffs. The administration is correct in arguing that Congress has repeatedly deferred to presidents on tariffs, granting them sweeping authority.
For example, the ruling does not affect Trump’s “sector tariffs” under the Trade Expansion Act, which impose 25% levies on steel, aluminum, and auto imports.
Likewise, the court acknowledged that Trump has the authority under Section 122 of the Trade Act to impose tariffs of up to 15% for 150 days to address “fundamental international payment problems,” including trade deficits. After conducting further investigation into these problems, he can then impose long-term tariffs under Section 232 of the Trade Expansion Act of 1962.
But Congress may have to act if it wants to allow the Trump administration to continue to use tariffs as a trade strategy. A court just removed the stick Trump used to force other nations to the negotiating table.
Absent congressional action, it may even be possible for companies to seek reimbursement for past payments under the Trump tariffs. Both the suspension of tariffs and the risk of reimbursement could exacerbate the current deficit. The revenue from the tariffs was factored into the projections behind Trump’s “Big Beautiful Bill.”
Congress will need to demonstrate that it is nimble enough to operate effectively in this fast-paced market. It will also have to decide whether it wants to give Trump time to close his deals. Whether you agree with Trump’s gamble or not, we already have chips on the table.
Moreover, there is strong support for reciprocal tariffs to match the costs and barriers placed on our goods by other countries.
Congress has already indicated that it is willing to block Democratic measures to derail the negotiations. Recently, the Senate rejected an effort to undo Trump’s tariffs on most U.S. trading partners in a tied vote of 49 to 49 (with three Republican senators voting with the Democrats).
Trump may find that his razor-thin margin will not last much longer. Polls indicate that the public is wary of the impact of the tariffs. Many of us view tariffs as a tax on consumers and generally a poor idea.
Nevertheless, Trump was right about the market barriers and unfair treatment shown by other countries, including some of our closest allies. The resulting deals will be good for the United States and could represent the most significant move toward open markets in a generation.
These are difficult issues, and we need to tamp down the rhetoric. These judges are not the enemy. Neither is Trump. Trump is trying to use every possible law to achieve historic reforms. These judges are trying to guarantee that such priorities do not take precedence over the rule of law.
Just as Congress needs to be more nimble, so does the president. He can appeal this case while using less controversial means to maintain the tariff pressure on these countries as we work toward these bilateral trade agreements.
In the meantime, the Senate should use its leverage at this moment to not only push the administration for a fast resolution of these trade talks, but far greater reductions in federal spending.
Trump has shocked a long-comatose system in Washington. However, it has been more shock than therapy without free trade deals and deficit reductions.
Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University and the author of “The Indispensable Right: Free Speech in an Age of Rage.”