Cato Institute Challenges Trump’s Tariffs

The Cato Institute has raised concerns that the federal government is overstepping its bounds by employing President Donald Trump’s emergency tariffs. They are expressing hope that the courts will intervene.

In a recent Amicus brief, Cato argues that the administration has exceeded its authority under the International Emergency Economic Powers Act (IEEPA) by imposing abrupt tariffs on imports from nations such as China, Mexico, and Canada.

The think tank, known for its libertarian stance, believes this action disrupts the intended separation of powers. They argue it extends trade enforcement too far, something Congress did not plan for.

“This is a significant case about whether the president can impose tariffs at will,” said Brent Skollup, a legal fellow at Cato, in an interview. “There are legal restrictions, and this administration is not adhering to them.”

As the appeals court holds back lower court verdicts, the Trump administration manages to block contested tariffs.

“The tariff rates have jumped to as high as 145% on some Chinese products,” Skollup noted. “The president’s legal team failed to provide clear limitations. Essentially, it seems the administration thinks there aren’t any real boundaries, and that’s a concern.”

Cato is urging the Court of Appeals to affirm a lower court decision determining that these tariffs exceed what the president is allowed to do. Earlier this year, the U.S. International Trade Court stated the President’s reliance on IEEPA was not legally supported, clarifying that tariffs cannot be used broadly against issues like drug trafficking or trade discrepancies.

Skolup remarked that the administration hasn’t been able to establish clear constraints on its powers under IEEPA. “They didn’t offer a solid rationale,” he commented. “The law doesn’t mention tariffs or customs; that’s Congress’s role.”

On the other hand, the administration defends its decisions, arguing that IEEPA provides the necessary authority to respond swiftly in a national emergency, citing the fentanyl epidemic and trade vulnerabilities as driving factors.

Skollup acknowledges that there’s no doubt about the existence of an emergency. However, he emphasized that justifying global tariffs or declaring a national emergency to address domestic trade issues extends far beyond what most Americans consider an appropriate use of emergency powers.

He also pointed out the larger question: how much leeway Congress actually grants to the President in the first instance. “This isn’t just a partisan issue. Past presidents from both parties have twisted vague laws to expand their reach, and Congress shares the blame for crafting them that way,” he explained.

For small businesses like VOS Selection, the unpredictability of tariffs can lead to severe financial strains. Skollup shared that companies dependent on imports, such as VOS, are finding it hard to plan strategically due to the erratic nature of tariffs.

“VOS Selection imports wine and spirits, and an unexpected hike in tariff rates can disrupt their ability to deliver products to distributors,” he said. “Other industries face similar challenges, like pipe importers or specialized manufacturers. These businesses simply can’t adjust to sudden cost changes overnight.”

If the Court of Appeals grants the administration this power, it could set a precedent that significantly expands presidential authority regarding trade policy. Skollup cautioned that such a ruling could empower future presidents to operate with minimal oversight.

“Essentially, Congress would be giving up considerable economic power to the President,” he noted. “This undermines the constitutional separation of powers that is meant to be upheld.”

A decision from the Court of Appeals is anticipated later this year.

The White House has not responded to requests for comment regarding this situation.