Can the president unilaterally impose tariffs on imports from other nations through executive orders? The U.S. Supreme Court heard arguments on this fundamental question this week. Though sometimes framed as a showdown on the power of President Donald Trump (a perception heightened by the president’s musing that he might attend the oral argument), the scope of presidential power is a perennial issue, and the precedents that might be most significant involve assertions of power by presidents of both parties.
At the oral arguments, the justices seemed skeptical of the administration’s argument that the president has that kind of power.
The two consolidated cases involve challenges by small business owners to executive orders issued by President Trump that raised taxes on imported goods. The rationales for the tariffs have been the need to control the flow of illegal drugs into the United States and the need to address trade imbalances between the U.S. and other nations. The business owners challenging the orders argue that they are harmed by the increased costs of doing business imposed by the tariffs, as their companies rely on products and manufacturing in other nations.
Of course, the Constitution does not necessarily prohibit policies that impose higher prices, so the legal question in this case is actually who has the power under the Constitution to set tariffs.
The administration’s argument is that the president has broad power to set tariffs for two reasons. First, it argues that Congress authorized the president to exercise authority granted by the International Emergency Economic Powers Act (IEEPA), enacted in 1977. This law provides that in the case of a national emergency, the president can “investigate, regulate, or prohibit” certain international financial transactions. Second, the administration argues that the presidential powers related to national security and foreign affairs justify executive control.
The alternative argument is that the Constitution specifically grants only to Congress the authority to “lay and collect Taxes, Duties, Imposts and Excises.” Some of those arguing against the presidential power asserted in this case argue that the IEEPA did not actually give the president broad tariff power because it only provides authority to “regulate” some transactions, not impose taxes. Additionally, they argue that Congress “cannot delegate its responsibility to set the fundamental policy of the law and make substantive judgments. Congress must make those decisions itself.”
The constitutional principles likely to apply to the questions of delegation arise from prior assertions of presidential power. For instance, in the recent Loper-Bright case, federal administrative agencies argued that courts must defer to executive interpretations of the law. However, the Supreme Court clarified that the judiciary has a duty to determine the best reading of a law and cannot delegate that to a bureaucratic agency. The Court also recently rejected a claim that President Joe Biden could cancel student loans based on an extremely broad reading of a statute.
Tariffs are important and have real impacts on businesses, consumers, job markets, and international relations. More importantly, though, are the deeper questions raised by this dispute. What authority does the Constitution delegate to the different branches of the government? What respect must the different branches give to the authority of the others? Are there issues that are important enough that they justify ignoring the constitutional principle of separation of powers?
These are not new questions, but they are essential ones. The Supreme Court has had to address them before. Although it is not an enviable responsibility, it is an inescapable one. The justices are capable of and authorized to determine how the Constitution applies to this particular dispute. Their dedication to getting this right will influence whether we draw closer to or further from the benefits the Constitution’s Framers sought to bequeath to us.
