Trump’s Tariffs Will Withstand the Supreme Court

Anyone hoping that US President Donald Trump’s reciprocal tariff regime might be struck down by a US Supreme Court decision will be disappointed — irrespective of what verdict the court reaches.

The Supreme Court is expected to release its decision in November. Even if the court rules that the administration’s use of the International Economic Emergency Powers Act (IEEPA) to implement the tariffs exceeds or otherwise violates the Act, the administration has a variety of other means at its disposal to essentially reconstitute the reciprocal tariff regime under one or more different authorities.

This state of affairs is reflective of a governance evolution. The Executive Branch possesses these broad powers despite the fact that the Constitution unambiguously gave Congress the primary responsibility for managing trade. According to Article I, Section 8, Clause 3, Congress has the power to “regulate Commerce with foreign Nations”. Over recent decades, however, Congress has delegated much of that authority to the Executive Branch, leaving a variety of potent tools to levy tariffs in the hands of the President.

By the second half of the 20^th century, it had become increasingly clear that it simply was not practical for Congress to act as a unitary trade negotiator. The divergent interests of 535 members of Congress made it impossible to arrive at unified positions on every micro-trade issue, to say nothing of carrying out successful trade negotiations with foreign countries. Instead, what was needed was a single executive authority to act as the US’ lead trade negotiator.

In recognition of these realities, Congress began ceding trade and tariff authority to the Executive Branch. Congress sought to establish a prominent role for itself in oversight and stipulate regular consultations with the executive branch in which Congressional concerns would need to be factored in. However, the nexus of trade authority was clearly being shifted from Congress to the other end of Pennsylvania Avenue. The current case under consideration is IEEPA, a 1977 statute which provides the President with wide powers to take actions to address undefined international economic, security, or foreign policy emergencies.

There is little point in attempting to prognosticate which way the Supreme Court will rule. The arguments on both sides are plausible. The statute does not specify what constitutes an “emergency” and arguably therefore leaves the authority for determining an “emergency” in the hands of the executive.

Some may view Congress’s decades-long delegation of trade authority to the Executive Branch as a sensible and pragmatic acknowledgement of the realities of conducting trade policy in the modern world. Others may view it as a dangerous concentration of power in the hands of the executive.

On the other hand, it is hard to imagine that the original intent of the law was to vest such sweeping powers to essentially remake the entire US tariff regime in the hands of one individual, namely the President. 

In any case, beyond IEEPA, the President has other instruments at his disposal. Section 232 of the Trade Expansion Act of 1962 provides the Executive Branch with similarly broad and undefined powers to take actions, including tariff actions, to address US national security concerns. The Trump administration has demonstrated a broad interpretation of its authority to apply tariffs under this act. To the administration, even relatively benign manufacturing sectors, such as kitchen cabinets, are deemed as matters of national security.

Another powerful tariff tool vested in the hands of the Executive Branch is Section 301 of the Trade Act of 1974, which gives the President authority to use a variety of means, including tariffs, to respond to the unfair trade practices of foreign partners.

Additional delegations of authority are sprinkled throughout federal law, including the power to apply tariffs in response to damaging import surges. The US, along with most other countries in the world, also maintains anti-dumping (AD) and countervailing duty (CVD) laws which allow for the application of tariffs in cases where US commercial interests have been harmed as a result of foreign products that are sold at unfairly low prices or have benefited from subsidisation.

These measures, however, are generally more deliberative and hence would have been more burdensome for the Trump administration to use in implementing its sweeping reciprocal tariff regime. Typically, there are mandated investigations and specified methodologies and time frames that need to be adhered to. In some cases, such as Section 301, negotiations with the foreign partner to attempt to reach a resolution are part of the process. In other cases, such as AD/CVD, tariffs are imposed once there is a determination that a violation and material injury have taken place. The advantage of IEEPA – and presumably the reason it was used – is that it allows the President to move quickly and without a lot of procedural “baggage”.

Using other authorities to reconstruct the reciprocal tariff regime — should it be necessitated by an adverse Supreme Court ruling — would be significantly more cumbersome. It might even be necessary to use different authorities for different countries or even different product sectors. This would require the use of a more piecemeal approach rather than operating under a blanket authority. But it would be possible.

Some may view Congress’s decades-long delegation of trade authority to the Executive Branch as a sensible and pragmatic acknowledgement of the realities of conducting trade policy in the modern world. Others may view it as a dangerous concentration of power in the hands of the executive. In either case, the simple fact is that the current administration has been vested with sufficient authority to implement its far-reaching tariff policies. That will continue to be the case irrespective of what the Supreme Court rules in November. Indeed, it is fair to surmise that Trump’s trade officials have already mapped out contingency plans for using different tools to achieve largely the same result, should that be necessary.

2025/341