Trump Tariffs Under Legal Fire: What You Need to Know

Two of President Donald Trump’s signature programs are under severe attack. His estranged cost-cutting czar, Elon Musk, called his “big beautiful” tax and spend package a “disgusting abomination.” The nonpartisan Congressional Budget Office said the bill would add $2.4 trillion to the national debt over the next decade. As for the Trump tariffs, the nonpartisan Organization for Economic Cooperation and Development (OECD) projected that his tariffs would slow U.S. growth and raise inflation.

Besides being bad policy, Trump’s flagship reciprocal tariff program is of dubious legality. Last month, a panel of three judges on a little-known federal court, the Court of International Trade (CIT), which reviews civil actions arising under U.S. trade laws, ruled that most of his sprawling tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), were effectively illegal and permanently enjoined them. Peter Navarro, the White House trade advisor, dismissed the ruling, insisting the president had such authority. But the next day, a federal district court in the District of Columbia reached the same conclusion about IEEPA for different reasons, issued a preliminary injunction, and then stayed its own hand pending appeal. The U.S. Court of Appeals for the Federal Circuit stayed the CIT order. It will now deal with the case on an emergency basis, as the D.C. Circuit will likely respond to the government’s appeal of the district court’s decision. The appeals are expected to be heard on a fast track.

IEEPA grants the president a number of emergency authorities, one of which is the authority to “regulate…the importation or exportation…of… any property in which any foreign country or a national thereof has any interest by any person.” It further provides that the president may exercise this authority “to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.” There is no requirement that the president have a basis for the threat or that there is, in fact, a national emergency. No matter how hyperbolic, what the president says generally goes and, up until now, has been generally unreviewable.

Nowhere in IEEPA does the word “tariff” or “duty” appear. Basically, the plaintiffs in these cases argued that Congress, not the president, has the power under the Constitution to impose tariffs. They also argued that Congress is jealous of its authority to impose tariffs. Whenever Congress delegates that authority to the president, it does so with guardrails and procedural constraints. The president saw IEEPA as authorizing him to impose a Trump tariff on any country in the world at any time in any amount without any rationale, evidence, rhyme, or reason—and without any procedural safeguards.

The CIT opinion does not go so far as to rule that IEEPA never gives the president tariff authority. Instead, the court focuses on the so-called reciprocal tariffs, a 10-percent across-the-board tariff on every country with the option of still higher tariffs on some 60 additional countries. Beginning in April, Trump cited foreign threats that caused global trade imbalances and imposed a 10 percent duty on all imports from all trading partners, country-specific higher rates (up to 50 percent) for 57 nations, and changed import duties on China. The stated reason for the reciprocal tariffs, the U.S. trade deficit, is absurd. We put tariffs on the tiny landlocked African country of Lesotho, with a per capita income of $2.44 a day. The tariff will not force Lesotho to buy Buicks.

Then, the second set of tariffs was imposed on Canada, Mexico, and China, resting root and branch on fentanyl imports. The court called these “Trafficking Tariffs.” Trump determined that the import duties dealt with this “unusual and extraordinary threat” to national security and the American economy, which had sources “outside the United States.”

There, the court found no direct connection between Trump’s “emergency,” if any, and the tariffs imposed on imports ranging from lumber to children’s toys to MAGA hats. You can’t use tariffs as leverage to deal with something unrelated to what you claim is the problem. As the court noted in a footnote, tongue in cheek, the tariffs do not change the duty rate for the smuggled drugs themselves.

It is well worth noting that the CIT decision is limited to tariffs under IEEPA. There are still tariffs under the Tariff Act’s national security and unfair trade practices provisions. However, these provisions have rarely been used, and some require investigative fact-finding before they can be slapped on Hyundais and Champagne. What Trump could readily do, however, is expand existing tariffs already in place, as he did with tariffs on steel and aluminum.

The bottom line is not what the appellate courts do with the decision to vacate the tariffs, but what the Supreme Court does with it. The Court has consistently said that the president runs foreign policy, and it is unlikely to interfere when he claims he needs the tariffs to leverage China or other countries’ trade policies, which undermine national security.

The ultimate legality of Trump’s IEEPA tariffs probably depends on applying the judge-made Major Questions Doctrine (MQD), which will be the core issue before the Supreme Court when these cases arrive on its doorstep. As Chief Justice Charles Evans Hughes said about the Constitution: “We are under a Constitution, but the Constitution is what the judges say it is.” The CIT and the district court failed to analyze this issue in depth.

The MQD requires the government to “point to ‘clear congressional authorization’” to justify exercises of “highly consequential power beyond what Congress could reasonably be understood to have granted.” The Court sometimes says the clear authorization requirement is triggered when agency action has immense “economic and political significance.”

The district court concluded, “[i]f Congress had intended to delegate to the President the power of taxing ordinary commerce from any country at any rate for virtually any reason, it would have had to say so.”

This centers on the central issue that the Supreme Court must confront: whether the MQD will allow the Trump tariffs to rest on a first-time-in-50-years interpretation of IEEPA’s “regulate… importation” language.

The issue is whether the reciprocal tariffs under IEEPA are a “major question.” Trump’s tariffs doubtless have enormous economic and political significance. Just look at their sheer volume. We do not know how the MQD applies in this context.

Next, it is unsettled whether the MQD applies to congressional authorizations to the president. Every Supreme Court decision involving the MQD has involved agency actions, and lower courts are divided on whether the MQD applies to presidential authority. The district court relied on the MQD without facing this question.

It is also unclear whether and how the MQD applies to “foreign affairs” delegations to the executive branch. Commentators have harshly criticized the Court for invoking the MQD to strike down progressive executive actions such as tobacco and environmental regulation, student loan forgiveness, and a vaccine mandate.

IEEPA tariffs are ideal for the court to tell us whether MQD applies in every context. The Court will surely think twice before narrowing IEEPA powers that presidents can rely upon as a foreign policy tool.

There is no precedent for applying MQD to the IEEPA tariffs. The CIT sidestepped the MQD, and the district court invoked it in passing while avoiding the challenging issues about its applicability to Trump’s tariffs. If the MQD applies, it is hard to argue that Congress delegated IEEPA authority to the president when they didn’t even use the words “tariff” or “duty.” Congress is unlikely to have delegated to any president authority without guardrails.

Trump is sailing on thin legal ice. If he claims he can impose reciprocal tariffs because IEEPA grants him the power to regulate imports or exports, he has violated Article One, Section Nine of the Constitution, which prohibits taxes or duties on exports.

The reciprocal tariff regime has no clear precedent as it relies on IEEPA. The only thing we can say is that when the Supreme Court rules on this Trumpian mess, they will have a case for the ages.

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