Federal Court Appears Receptive to Arguments Against Unilateral Presidential Tariff Power
President Trump’s invocation of emergency powers to impose tariffs faces skeptical judges.
Everybody with a brain knows that tariffs are taxes. And they know that tariffs imposed on goods imported to the United States are largely paid by American businesses and consumers. The big question is whether tariffs unilaterally imposed by President Donald Trump under creative interpretations of emergency executive powers will withstand a federal court challenge. So far, the signs are promising for those hoping that a law intended to rein in the power of the presidency will not be read to permit the president to set trade policy of his own accord.
As CBS News reported this week, the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. heard "oral arguments on Thursday in V.O.S. Selections v. Trump, a case brought by five small business owners and 12 states who allege they have been harmed by President Trump's import taxes. V.O.S., the lead plaintiff in the case, is a New-York based wine importer."
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Representing the plaintiffs is the free-market Liberty Justice Center, along with co-counsel Ilya Somin, a law professor at George Mason University's Scalia Law School. The plaintiffs are challenging the Trump administration's invocation of the International Emergency Economic Powers Act (IEEPA) as the basis for the "Liberation Day" tariffs on much of the world as well as related tariffs on Mexico, Canada, and China.
A Law Intended To Trim Presidential Power, Not Expand It
The plaintiffs maintain that "under that law, the President may invoke emergency economic powers only after declaring a national emergency in response to an 'unusual and extraordinary threat' to national security, foreign policy, or the U.S. economy originating outside of the United States. The lawsuit argues that the Administration's justification—a trade deficit in goods—is neither an emergency nor an unusual or extraordinary threat."
What's interesting is that Congress passed IEEPA not to expand presidential power, but to restrict it. According to a 2024 Congressional Research Service report, "following committee investigations that discovered that the United States had been in a state of emergency for more than 40 years, Congress passed the National Emergencies Act (NEA) in 1976 and IEEPA in 1977. The pair of statutes placed new limits on presidential emergency powers." Under these laws, presidents are required to assess emergencies on an annual basis, extend them if necessary, and report on their status to Congress.
"Some experts argue that the renewal process has become pro forma," the report acknowledges. "History shows that national emergencies invoking IEEPA often last nearly a decade, although some have lasted significantly longer—the first state of emergency declared under the NEA and IEEPA, which was declared in response to the taking of U.S. embassy staff as hostages by Iran in 1979, is in its fifth decade."
Where Is the Emergency? And the Constitutional Authority?
Strictly speaking, if an "emergency" continues for years on end, it's not an emergency; it's just the way things are. Reason's Eric Boehm raised this point last week when he highlighted the administration's postponement of some of its own tariffs to October and asked, "if the administration seriously thinks this is an emergency, why is it responding so slowly?"
And that's a main concern raised by the plaintiffs: "Trade deficits have existed for decades," they emphasize, "and do not constitute a national emergency or threat to security." They add that "IEEPA does not authorize the President to impose across-the-board tariffs—it does not even authorize tariffs at all. Even if the IEEPA did attempt to extend such power to the President, that would be an unconstitutional delegation of Congress's power to impose tariffs."
In an amicus brief filed in the case, the Cato Institute agrees "the Constitution vests the power to impose tariffs solely in Congress…. The government's reliance on IEEPA as a source of unilateral tariff authority breaks with this tradition and misreads the statute. IEEPA 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"
The plaintiffs and their allies argue that the Trump administration is manufacturing a unilateral power to impose tariffs that Congress never granted and that it cannot transfer in wholesale form to the executive branch. The White House's claims, say the plaintiffs, misread the law and violate the principle of the separation of powers.
Courts Have Proven Skeptical to the President's Arguments
These arguments already proved convincing in May to a three-judge panel of the U.S. Court of International Trade. That court found that the president's tariff orders "exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs" and ruled that "the challenged Tariff Orders will be vacated and their operation permanently enjoined."
Further court proceedings, including another decision against the tariffs and a stay of the Court of International Trade ruling, brought the case to the U.S. Court of Appeals for the Federal Circuit. So far, the plaintiffs feel fairly confident that their arguments are finding as receptive an audience at the appeals level as they did in lower courts.
"There seems little, if any, support for the idea that IEEPA grants the president unlimited tariff authority of the kind the administration claims," Somin commented at the Reason-hosted Volokh Conspiracy. "Multiple judges expressed skepticism that the law gives him the authority to rewrite the tariff schedule or to claim 'unbounded authority.' Several judges emphasized, as Judge Reyna noted, that 'IEEPA doesn't even mention the word tariffs.'"
Several of the judges also expressed doubt about letting the president use the word emergency as a blank check for invoking extraordinary powers.
Cato's Thomas Berry concurred, writing in an emailed statement: "Based on the tenor and questions of the arguments, it appears that the challengers have the better odds of prevailing. Several judges peppered the government's attorney with skeptical questions about why a broad term in IEEPA like 'regulate importation' should be read to allow the president to unilaterally impose tariffs."
No matter how the case goes, this isn't the end of the line for the issue. The case will undoubtedly end up before the U.S. Supreme Court. And there are other laws the president can invoke to justify tariffs.
But the proceedings demonstrate that the U.S. isn't quite ready to allow one person to exercise unrestrained power.
