Appeals Court Briefs Say Trump's Tariffs Are Based on a Statute That Does Not Authorize Tariffs at All
The Cato Institute and the New Civil Liberties Alliance urge the Federal Circuit to extend the logic of a decision against the president's far-reaching import taxes.
In May, the U.S. Court of International Trade (CIT) ruled that President Donald Trump exceeded his statutory authority when he invoked the International Emergency Economic Powers Act (IEEPA) to impose stiff, wide-ranging tariffs aimed at reducing drug trafficking and bilateral trade deficits. The Trump administration is now asking the U.S. Court of Appeals for the Federal Circuit to reverse that decision. But in two briefs filed on Tuesday, the Cato Institute and New Civil Liberties Alliance (NCLA) argue that the CIT should have gone further by ruling that the IEEPA does not authorize tariffs at all.
The CIT decision in VOS Selections v. Trump dealt with two sets of tariffs: the import taxes on Chinese, Mexican, and Canadian goods that Trump presented as tools to coerce greater cooperation in the war on drugs and the "Liberation Day" tariffs on goods from nearly all countries, which he said would help reduce the gap between U.S. imports and exports. In both cases, the problems that Trump claimed to be addressing were longstanding: Drug-related deaths had been rising for decades, and the U.S. has not run a trade surplus since 1975. Yet in both cases, Trump asserted an "unusual and extraordinary threat" that constituted a "national emergency" under the IEEA, which he said justified his tariffs.
In separate lawsuits, a dozen states and several businesses argued that Trump was wrong about that. Addressing both lawsuits, a three-judge CIT panel unanimously agreed, saying neither set of tariffs was authorized by the IEEA. "We do not read IEEPA to delegate an unbounded tariff authority to the President," the judges said. "We instead read IEEPA's provisions to impose meaningful limits on any such authority it confers."
Cato and the NCLA agree that the statute does not give the president "an unbounded tariff authority." In fact, they argue in their Federal Circuit briefs, the IEAA does not give the president any tariff authority.
"The Constitution vests the power to impose tariffs solely in Congress," the Cato brief notes. "For over a century, Congress exercised that power directly and in exhaustive detail, even during times of war and economic crisis. When Congress has chosen to delegate limited authority to the Executive to vary tariffs, it has done so explicitly and with clear statutory limits."
By invoking the IEEPA "as a source of unilateral tariff authority," Cato says, Trump "breaks with this tradition and misreads the statute." That law "contains no reference to 'tariffs' or 'duties,' and no President had cited it to impose tariffs in the nearly 50 years since its enactment—until now. Congress knows how to grant tariff authority when it chooses to, as it did in the Tariff Act of 1922, the Tariff Act of 1930, the Trade Expansion Act of 1962, and the Trade Act of 1974. IEEPA, by contrast, was enacted to limit executive power, not expand it. Courts should not credit interpretations of vague statutory texts that, for the first time in decades, are 'discovered' to confer vast economic powers on the President."
That argument alludes to the major questions doctrine, which says the executive branch can exercise such powers only when Congress has unambiguously granted them. This case also implicates the nondelegation doctrine, which says Congress may not cede its legislative powers to another branch of government. Both doctrines aim to reinforce the separation of powers between the legislative, executive, and judicial branches.
The NCLA, which represents the plaintiffs in another lawsuit challenging Trump's tariffs, agrees that the appeals court "should not merely affirm the decision by the Court of International Trade." The NCLA argues that the Federal Circuit "should issue an even stronger opinion unreservedly holding that any tariffs imposed through the [IEEPA] are unlawful, as it is not a statute that provides for tariffs." The court "could reach this conclusion," the NCLA says, by "determining that the plain meaning of the statute does not provide for tariffs and that such a reading ends the matter."
Trump's interpretation of the IEEPA relies on a broad understanding of the president's authority under that statute to "regulate…importation." In 1975, the government's lawyers note, the Court of Customs and Patent Appeals (which has since been supplanted by the Federal Circuit) construed the same phrase in the Trading With the Enemy Act (TWEA) to allow a 10 percent import surcharge that President Richard Nixon had briefly imposed in 1971. But the NCLA argues that "the most logical way to construe the phrase 'regulate…importation' in IEEPA is different and narrower than the use of that phrase in the TWEA."
That conclusion is consistent with the CIT decision, the NCLA says, because that court held that the IEEPA does not give the president "unbounded tariff authority," which it said "would constitute an improper abdication of legislative power to another branch of government." Since "there are no scope limitations" in the IEEPA provision authorizing the president to "regulate" imports, the NCLA reasons, reading that phrase to include tariffs would raise the same problem. Such a grant of authority "would be unconstitutional because it is unlimited in scope."
It therefore follows that the provision on which Trump is relying "does not authorize any tariffs at all," the NCLA argues, "because courts are not constitutionally authorized to infer or to add the limits that would be necessary to render a grant of tariff authority constitutional. The major questions doctrine prevents courts from inferring limitations
not clearly stated in the text. And the nondelegation doctrine uncontroversially prevents courts from relying on limitations not contained in the text."
In other words, the NCLA says, the logic of the CIT decision "goes further than the court below noticed. It establishes that, because IEEPA cannot be construed to grant unlimited tariff authority, and because IEEPA does not limit any authority that it grants, IEEPA cannot be construed to grant any tariff authority whatsoever."
The statute, as it was understood prior to Trump, "provides for sanctions, asset freezes, and other forms of regulation," the NCLA says. "It does not provide for tariffs. The text of IEEPA does not use the word 'tariffs,' the Constitution treats tariffs differently, and tariff-related portions are found in other sections of the United States Code."
In light of that evidence, the NCLA adds, "it is unsurprising" that a federal judge in another case concluded that the IEEPA "does not authorize tariffs at all." In that case, Rudolph Contreras, a judge on the U.S. District Court for the District of Columbia, emphatically rejected the government's claim that Congress, in enacting the IEEPA, "repealed by implication every extant limitation on the President's tariffing authority."
It is not clear whether the Federal Circuit will be inclined to go as far as Cato and the NCLA urge. But the NCLA suggests a couple of other ways in which the appeals court could uphold the CIT's ruling.
"Even if this Court determines that delegating the authority to raise tariffs would not violate the nondelegation doctrine and that the language used in IEEPA should be construed in the same way that similar language [in the TWEA] was construed" in the 1975 decision involving Nixon's tariffs, the NCLA says, that case was different from this one in a crucial way. Nixon "suspended executive actions that had lowered some tariff rates beyond the background tariff rate approved by Congress." Trump, by contrast, dramatically raised tariffs above the congressionally approved level, meaning "he was acting at the nadir of his constitutional authority." The NCLA backs up that claim by reviewing the history of U.S. tariffs, which it says shows that "Congress has delegated authority to the President solely for the purpose of negotiating lower tariff rates."
In case the Federal Circuit does not buy that alternative argument, the NCLA offers another one. "The tariffs imposed in this case are substantially different" from Nixon's, it says, because the latter included "limitations" that "are absent in the ones at issue here." In this case, "the challenged executive orders do not acknowledge any limitations on the president's tariff authority."
That power grab is breathtakingly broad. As the business plaintiffs in VOS Selections v. Trump note, "the government claims the President may impose tariffs on the American people whenever he wants, at whatever level he wants, against whatever countries and products he wants, and for as long as he wants—merely by declaring longstanding U.S. trade deficits a national 'emergency' and an 'unusual and extraordinary threat,' declarations the government insists are unreviewable."
As the CIT recognized, that assertion of sweeping authority based on vague language in the IEEPA that has never been interpreted this way before is both implausible and contrary to the constitutional design. "Regardless of whether the court views the President's actions through the nondelegation doctrine, through the major questions doctrine, or simply with separation of powers in mind," the CIT said, "any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional."
