The U.S. Supreme Court today ruled 6 to 3 rejecting tariffs imposed by the Trump Administration under the International Emergency Economic Powers Act (IEEPA). The decision holds that the IEEPA law does not give the President the authority to, in the Court’s words, “unilaterally impose tariffs of unlimited amount, duration, and scope.”
Six justices held that the statute does not authorize the power. Three of those justices (Roberts, Gorsuch, and Barrett) further invoke the view that Congress does not delegate major powers in vague language (the major questions doctrine) and that it did not do so here. Three other of those justices (Kagan, Sotomayor, and Jackson) further cite legislative history as evidence that Congress did not intend a presidential power to impose tariffs. Three justices (Kavanaugh, Thomas, and Alito) dissented, persuaded that the scope of existing statutes and past action by President Nixon justifies the current tariffs.
Tariffs involved cite fentanyl trafficking on Canada, Mexico, and China; Liberation Day 10% tariffs on most countries in the world; reciprocal tariffs on certain countries; and some higher tariffs on China. The decision does not affect steel and aluminum tariffs imposed under Section 232 of the Trade Expansion Act of 1962, and tariffs responding to China trade practices under Section 301 of the Trade Act of 1974.
NTU Foundation’s Taxpayer Defense Center submitted a brief in the case, highlighting an NTU letter signed by 463 economists, including nine Nobel laureates, contending that trade deficits do not represent an extraordinary threat to the United States. (My colleague Tyler Martinez and I also accurately predicted where each justice ended up in the case.)
The majority opinion, authored by Chief Justice Roberts and joined by Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson, makes the following points:
- The Constitution gives taxing power, including tariff power, to Congress and not to the President. Any presidential imposition of tariffs in peacetime must therefore depend on an act of Congress. IEEPA’s power to “regulate . . . importation” cannot give the President “the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time” with “dizzying array of modifications at will.”
- When Congress delegates regulation or taxation it must specify so “separately and explicitly.” If that was not true, the IEEPA statute is partly unconstitutional because IEEPA allows regulation of exports but taxing exports is forbidden by the Constitution. When Congress authorizes tariffs, “it does so clearly and with careful constraints” and did not do so here.
- IEEPA does not encompass taxes. IEEPA authorizes the President to investigate, block, regulate, direct and compel, nullify, void, prevent or prohibit importation or exportation. The Court holds that taxes may accomplish regulatory ends but are different from regulations. The power to regulate does not automatically include the power to tax. IEEPA’s specificity (such as sanctions on foreigners, prohibiting transactions, blocking imports) suggests “Congress did not intend for regulation to include the revenue-raising power” and “the fact that no President has ever found such power in IEEPA is strong evidence that it does not exist.” Even if tariffs are “less extreme” than the power to prohibit, they are a branch of the taxing power and outside of the regulatory spectrum.
- The dissent’s claim that the President can use other statutes to impose most of the tariffs anyway is not persuasive, since those “statutes contain various combinations of procedural prerequisites, required agency determinations, and limits on the duration, amount, and scope of tariffs they authorize.” Additionally, that is a hypothetical argument “not before us.”
- Wartime or national security powers do not authorize “expansive peacetime tariff power” because this relies on “a series of inferences drawn from scant legislative history.” The Algonquin decision (1976) allowing President Ford to impose license fees on oil imports as part of a statutory power “to adjust imports” (Section 232(c) of the Trade Expansion Act) does not extend further to tariff duties because only Section 232(b) authorizes duties. The Dames & Moore decision (1981) deferentially allowing President Carter to freeze Iranian assets was narrow “and did not involve tariffs at all.”
- Arguments about economics or foreign affairs are not relevant for the Court. “We claim no special competence in matters of economics or foreign affairs. We claim only, as we must, the limited role assigned to us by Article III of the Constitution.”
- The case is concluded, with the Federal Circuit decision affirmed and the DC Circuit opinion remanded with instructions to dismiss. This means questions of refunds will be left for future cases, but Justice Kavanaugh in dissent acknowledges the refunds may be in the billions of dollars.
A portion of Chief Justice Roberts’s opinion was joined only by Justices Gorsuch and Barrett:
- A reading of IEEPA to encompass tariffs violates the major questions doctrine, as Congress would not have delegated a highly consequential power with ambiguous language. The President must point to clear congressional authorization.
- This is true even for presidentially-declared emergencies or foreign affairs. The Court has rejected claims by Presidents Truman and Biden that vague language in statutes authorize unbounded delegations.
- Congressional delegations on tariffs are explicit and subject to strict limits. All have procedural prerequisites, caps on amount and duration, and involve the phrase customs “duty.” This includes Section 232 of the Trade Expansion Act, which requires separate investigations into specific articles.
- Only one President (Nixon) has invoked IEEPA or its predecessor to impose tariffs, and only as a post-imposition justification when it was challenged in court (United States v. Yoshida International, Inc.). The tariffs in that case were smaller in magnitude (10% or less) and duration (5 months) than here. The dissent’s claim that Congress intended IEEPA to encompass tariffs because it “knew of” the Yoshida decision “falls well short of the broad and unquestioned judicial consensus” that must exist to reach such a conclusion.
Justice Gorsuch wrote a separate concurring opinion:
- He joins the majority opinion in full, rejecting the claim that the President has “the power to impose tariffs on practically any products he wants, from any countries he chooses, in any amounts he selects.” This power, he writes, is lodged “in Congress alone.” “Americans fought the Revolution in no small part because they believed that only their elected representatives (not the King, not even Parliament) possessed authority to tax them.”
- He defends the major questions doctrine in response to Justice Kagan’s criticism. He notes that Justices Kagan, Sotomayor, and Jackson would have upheld broad delegations from vague statutes under the Biden Administration, so their opposite view here must rely on some larger principle such as here where the action “will affect the entire national economy.”
- To uphold separation of powers, courts must scrutinize delegations carefully because it is a one-way ratchet: “Once this Court reads a doubtful statute as granting the executive branch a given power, that power may prove almost impossible for Congress to retrieve.” A ruling for the President here would allow future Presidents to “impose tariffs on gas-powered vehicles to respond to climate change” or “on virtually any imports for any emergency any President might perceive”; “What President would willingly give up that kind of power?”
- He responds at length to Justice Barrett’s opinion on whether the major questions doctrine is an independent doctrine or just an element of statutory interpretation.
- He says the dissent “engages in a little grade inflation” when applying the major questions doctrine and rejects their proposed foreign affairs or emergency exception as too broad. He characterizes Justice Thomas’s opinion as suggesting “that Congress may hand over most of its constitutionally vested powers to the President completely and forever.”
Justice Barrett wrote a separate concurring opinion stating that the major questions doctrine is not a separate canon but merely textual interpretation that uses background legal conventions, common sense, constitutional structure, and other context to inform the meaning of the text.
Justice Kagan, joined by Justices Sotomayor and Kagan, disagreed with the major questions doctrine argument but wrote that statutory interpretation reaches the same result. They wrote that IEEPA says nothing about tariffs or taxes, the surrounding language deals with regulations not revenues, lacks the specific language about “duty” used in all other congressional delegations of tariff power, and has not been used in this way by previous presidents. Additionally, the legislative history of the law is silent on taxes.
Justice Jackson wrote a separate concurring opinion, citing legislative history to show Congress did not intend for IEEPA to authorize tariffs.
Justice Kavanaugh, joined by Justices Thomas and Alito, authors the principal dissent.
- They note that debates on tariff policy are not for the judiciary to resolve.
- They write that Congress has repeatedly delegated tariff imposition authority to the President. President Nixon used the predecessor to IEEPA to impose a global 10% tariff, and President Ford used it to impose license fees on oil imports, and that was upheld in the Algonquin decision that the Court today does not overrule.
- They argue that IEEPA’s power to block all imports sensibly includes a power to use other tools such as quotas, embargoes, and tariffs.
- They state that the Supreme Court has never before applied the major questions doctrine in the foreign affairs context, and in matters involving foreign affairs such as this one, the Court should not put “a thumb on the scale against the President.”
- They argue that the Court’s decision may be of little consequence because numerous other federal statutes authorize the imposition of tariffs, these laws do not violate the separation of powers, and the President can just utilize those. The President does not claim unilateral authority to impose IEEPA tariffs without congressional authorization and acknowledges the judiciary has the final word on his authority.
- They warn that refunds of billions of dollars may have to be issued “even though some importers may have already passed on costs to consumers or others.” Additionally, the decision could generate uncertainty regarding ongoing trade deal negotiations.
- They note that no member of the Court relied on the nondelegation doctrine, which they argue does not apply in foreign affairs.
Justice Thomas dissented, holding that IEEPA authorized the tariffs. He writes that there is no separation of powers violation if Congress delegates the power to impose tariffs to the President because nothing prevents Congress from delegating its own powers unless it threatens life, liberty, or property. He also writes that there is no constitutional right at issue because “[i]mporting is a matter of privilege” not a right.
Not Addressed:
- None of the justices discuss the reviewability of the President’s power to declare emergencies in invoking IEEPA. This case involved declared emergencies relating to fentanyl and trade deficits, whose relationship to tariff actions are debatable.
- Refunds are not addressed, with the Court majority simply affirming one case and remanding the other to be dismissed. Refunds will therefore be resolved by future cases.
What's Next:
- The President, as expected (and predicted by Justice Kavanaugh), will utilize existing statutory authorities to further his tariff policies as a “Plan B.” This may include:
- Section 122 of the Trade Act of 1974. Section 122 allows for temporary tariffs of up to 15% to address fundamental international payments problems. These tariffs expire after 150 days (June 20) unless they are extended by Congress. The United States does not currently have a fundamental international payments problem.
- Section 201 tariffs. Section 201 of the Trade Act of 1974 allows the President to impose temporary “safeguard” tariffs to protect industries threatened with serious injury by imports following an investigation by the U.S. International Trade Commission.
- Section 301 tariffs. Section 301 of the Trade Act of 1974 was the basis of President Trump’s China tariffs during his first term. Section 301 requires an investigation by the Office of the Office of the U.S. Trade Representative (USTR) into potentially unfair foreign trade practices. A review of the tariffs conducted by USTR during the Biden Administration found that the Section 301 tariffs largely failed to achieve their goals.
- Section 232 tariffs. Tariffs imposed under Section 232 of the Trade Expansion Act of 1962 can be used to restrict imports that threaten to impair U.S. national security following an investigation led by the Secretary of Commerce. President Trump earlier used Section 232 tariffs to address the national security threat allegedly posed by imports of kitchen cabinets.
- Section 338 of the Trade Act of 1930 allows for tariffs of up to 50% on countries that discriminate against U.S. commerce. Tariffs have never been imposed under Section 338, and some legal experts have questioned whether it may still be legally used to restrict imports.
- Apart from these avenues, President Trump might also ask Congress to impose tariffs or attempt to impose import licensing fees.
Future tariffs must be submitted to Congress for consideration or use existing procedures under existing laws, rather than be imposed in a sweeping manner through executive action. The next step is that billions of dollars must now be refunded to taxpayers.
If left in place, the tariffs would have cost $2.5 trillion over the next 11 years, the equivalent of more than $1,600 a year for every American household. At a time when many Americans are struggling to pay their bills and afford basic necessities, this ruling will provide taxpayers with welcome relief.
The benefits of terminating the tariffs include increased economic growth, lower input costs for our farmers and manufacturers, increased exports, better relations with U.S. allies, and increased foreign investment in the United States. This ruling thwarts a massive tax increase, bolstering the Trump Administration’s ongoing efforts to cut taxes and regulations.
The cases are Learning Resources, Inc. v. Trump, No. 24-1287; and Trump v. V.O.S. Selections, Inc., No. 25-250.