Tariffs and Trade Regulations
A federal judge in Washington recently decided that the president lacks the authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). This case, reported as Learning Resources v. Trump, indicates that while IEEPA allows the president to “regulate imports,” it falls short in not explicitly using terms like “customs duties,” “duties,” or “taxes.” While courts can block imports, they can’t impose charges unless Congress clearly defines it.
This distinction faces serious challenges from informed sources. Chad Squitieri, a professor at Catholic University and a former clerk for Judge Neil Gorsuch, shared insights in a recent issue of the Harvard Journal of Law & Public Policy. This journal, historically linked with the Federalist Association, serves as a platform for legal arguments that might eventually reach the Supreme Court. Squitieri’s analysis is intended more for legal considerations than for gaining media attention.
Interpreting “Import Regulations” is crucial, and this isn’t a vague sentiment. For over 200 years, American lawmakers have relied on tariffs to generate revenue and guide trade policies. When established, Congress aimed not just to fund the government but also to boost domestic manufacturing. Figures like James Madison advocated for this approach, and Justice Marshall acknowledged it in Gibbons vs. Ogden. Joseph Story labeled it a “common means” of regulating duties.
The interplay of taxation and regulation is evident. Squitieri highlights that customs duties have historically served both taxation and regulatory functions. The Constitution allows for such overlap, and Congress has always legislated with that understanding. Essentially, laws giving the president power to regulate imports don’t necessarily need to stipulate specific “customs duties.”
The real concern is not whether customs duties are a requirement but whether courts will acknowledge that traditional tools, long in use, remain available under contemporary power delegations.
The President’s Diplomatic Flexibility
This becomes particularly significant in diplomacy. Historically, the courts have afforded the president broader international powers compared to domestic ones. The landmark case, Curtis Wright, established that Congress could grant greater leeway in matters of diplomacy, trade, and national security. Even Judge Gorsuch, a proponent of strict delegation limits, has acknowledged that diplomacy operates differently and often falls within the scope of the executive branch.
IEEPA falls into this category. It doesn’t give the president unchecked power. Instead, it allows for action in emergencies linked to foreign interests, which includes provisions for personal communication, informational content, and humanitarian assistance. The president has the authority to act through regulations, guidance, or licensing, structured sufficiently to satisfy the court’s requirements. The law provides direction: specify a target, outline a process, and establish constraints. Decades of precedent support this framework.
What about the “major questions doctrine”? Squitieri also addresses this. This doctrine stipulates that Congress must clearly articulate when delegating significant powers, and IEEPA’s mandate to “regulate imports” is particularly relevant since tariffs have historically been a standard method. If the doctrine aims to prevent unexpected grants of authority, it leads back to historical context. The president has been regulating trade through tariffs for over two centuries—often under laws less explicit than IEEPA. During the 1971 financial crisis, Nixon’s import surcharge was upheld on similar statutory grounds. This isn’t a novel exercise of power but a continuation of established practice.
This reasoning goes beyond mere legal maintenance. If the court sides with the district ruling, the president would lose a vital and agile tool in responding to global economic crises. Customs duties serve more than just raising costs; they’re about defining conditions. They enable the U.S. to counteract predatory trade, impose sanctions on hostile entities, or recalibrate dependencies. Without them, emergency economic measures could resemble a travel ban or merely strong rhetoric.
The market impact is unmistakable. If this ruling stands, the ability to implement tariffs in emergencies diminishes, hampering flexibility and deterring costs. Alternatively, if Squitieri’s perspective prevails, the White House would retain the capacity to influence global trade dynamics swiftly and decisively. Investors, exporters, and foreign leaders should tread carefully: the legal debates surrounding Trump’s tariff application under IEEPA aren’t unprecedented. They represent a fundamental argument rooted in historical context, precedents, and constitutional authority.
