National Taxpayers Union Free Trade Initiative Director Bryan Riley on Friday responded to the May 7 ruling by the United States Court of International Trade that tariffs imposed by the Trump Administration based on Section 122 of the Trade Act of 1974 were unauthorized by law.
“This is a significant win for taxpayers, consumers frustrated by inflated prices, and the division of powers established in the U.S. Constitution. The ability to impose taxes and tariffs is a power of Congress, not the president,” Riley said.
The Section 122 tariffs were proclaimed on February 20, immediately after the United States Supreme Court rejected tariffs that had been imposed under the International Emergency Economic Powers Act (IEEPA).
In January, Riley wrote that any attempt to impose tariffs under Section 122 would not be lawful.
Following their imposition, Riley and Joe Bishop-Henchman, Executive Vice President at NTU Foundation, observed “there is no overall balance of payments deficit” as required to impose tariffs under Section 122.
The Court of International Trade reached a similar conclusion in its opinion:
“Nowhere does Proclamation No. 11012 [imposing Section 122 tariffs] identify balance-of-payments deficits within the meaning of Section 122 as it was enacted in 1974,” according to the ruling.
The Court’s opinion referenced the variety of sub-accounts that make up the overall U.S. balance of payments.
“As previously noted, the ‘balance of payments’ as an accounting principle always nets to zero. To the extent that is the case, if the President has the ability to select among the sub-accounts to identify a balance-of-payments deficit, unless every sub-account is balanced, the President would always be able to identify a balance-of-payments deficit.” (emphasis added) It concluded: “Proclamation No. 11012 is invalid, and the tariffs imposed on Plaintiffs are unauthorized by law,” according to the ruling.
However, the Court determined that universal injunctive relief is not merited, meaning that importers who did not participate in the case must continue to pay the tariffs unless they sue individually or the decision is appealed to a higher court which issues universal relief.
The group “We Pay the Tariffs” calculates that Section 122 tariffs cost $8.3 billion in March alone. The failure to provide a universal injunction against tariff collections until any appeals are exhausted means the tariffs will continue to burden Americans. IEEPA tariffs are just now beginning to be refunded, more than two months after the Supreme Court decision.
“Tariffs are undermining the Trump Administration’s affordability agenda. Rather than continuing to impose duties based on dubious interpretations of the law, NTU urges the Administration to recalibrate its approach and to pursue a trade policy based on reciprocal, zero-tariff trade,” Riley said.