Two Courts Have Ruled Against Trump's Tariffs—but Not for the Same Reasons

Both are wins for free trade, but only one vindicates the separation of powers.

On Wednesday, the U.S. Court of International Trade (CIT) permanently enjoined President Donald Trump's tariff orders that invoke the International Emergency Economic Powers Act (IEEPA). On Thursday, the U.S. District Court for the District of Columbia also enjoined Trump's tariffs, but it did so on different grounds. How these cases proceed through their respective circuits will determine whether these free trade victories will also be a win for the separation of powers.

In V.O.S. Selection v. U.S., the CIT found that the president has some tariff authority under the IEEPA. However, the CIT ruled that Trump's tariffs exceeded the statutory authority of the law because the IEEPA does not grant "unbounded tariff authority to the President." The U.S. District Court for the District of Columbia went further in Learning Resources v. Trump, ruling that the IEEPA grants the president no authority to modify the harmonized tariff schedule whatsoever.

In another disagreement between the two courts, the CIT ruled that the IEEPA's provisions "impose meaningful limits on any such [tariff] authority it confers." Judge Rudolph Contreras of the U.S. District Court for the District of Columbia found that the IEEPA does not include "language setting limits on any potential tariff-setting power." Contreras rejects entirely "that, in enacting IEEPA, Congress repealed by implication every extant limitation on the President's tariffing authority."

Contreras' statements suggest agreement with the constitutional argument against Trump's tariffs in an IEEPA lawsuit filed by the New Civil Liberty Alliance (NCLA). In their case, Simplified v. Trump, the NCLA argues that, if the IEEPA delegates Congress's tariff authority to the president, it does so without an "intelligible principle" circumscribing its usage, in which case the law violates the nondelegation doctrine prohibiting Congress from transferring to other branches of government "powers which are strictly and exclusively legislative." The plaintiffs in Learning Resources also mount a nondelegation argument, but Contreras says that his decision does not address it.

In yet another disagreement, the CIT claimed exclusive jurisdiction over IEEPA cases. Contreras emphatically disagreed. Contreras acknowledged that, while the CIT has exclusive jurisdiction over civil action against the U.S. government stemming from those laws that provide for tariffs, the "IEEPA is not a 'law…providing for tariffs,' [so] this Court, not the CIT, has jurisdiction over this lawsuit." Contreras' ruling emphasizes that the IEEPA does not mention "tariffs" or its synonyms; has never before been invoked to impose tariffs in the five decades since it was enacted; and that no prior CIT case has cited those sections of the IEEPA invoked by the Trump Administration to impose recent tariffs. Meanwhile "hundreds of district court cases cite IEEPA Sections 1701 and 1702": those sections that Trump cites in his executive order enacting so-called "reciprocal" tariffs.

Reason's Eric Boehm celebrated the CIT ruling as "a win for the rule of law and the separation of powers." John Vecchione, senior legal counsel for NCLA, tells Reason "there's no reason not to celebrate [the CIT ruling] if all you care about is tariffs rather than separation of powers."

Still, it may be too early for supporters of free trade to declare victory. On Thursday, the Court of Appeals for the Federal Circuit stayed the CIT's ruling as it considers the government's appeal. The court is giving plaintiffs until June 5—and the Trump administration until June 9—to file briefs. The government has also appealed Contreras' decision to the Court of Appeals for the D.C. Circuit.

Whatever the outcome of these cases might be, those who care about the separation of powers should hope that any split between the Federal and D.C. Circuits on the IEEPA is resolved in agreement with Contreras: Congress granted no tariff-making authority to the president in the IEEPA whatsoever.