From Stanford Prof. Michael McConnell on the Tariff Decisions

Prof. Michael McConnell at the Stanford Law School, a leading constitutional law scholar (and former Tenth Circuit judge), passed this along, and I'm delighted to be able to post it:

Two courts now have ruled that President Trump did not have authority to impose new tariffs on foreign imports under the International Economic Emergency Powers Act of 1977 (IEEPA).  The government has already announced an appeal. The Federal Circuit granted an administrative stay and ordered briefing by June 9. The tariff litigation is shaping up as the biggest separation of powers controversy since Steel Seizure.

A few comments (with the caveat that I was co-author and signatory on an amicus brief in support of the challengers):

[1.] The two courts both concluded that the President has no power under IEEPA to impose tariffs in response to balance of trade problems, and one court ruled, additionally, that President Trump lacked power to imposed tariffs in response to fentanyl trafficking. (For the remainder of this post I will discuss only the former holding.) It is important to stress that the decisions were not based on any criticism of the President's reasons for imposing the tariffs, but went to the existence of a power to do so.

The Court of International Trade (CIT) emphasized the relation between IEEPA and the Trade Act of 1974, holding that the specific procedures and substantive limitations contained in the latter supersede any more general emergency authority under the former. The District Court for the District of Columbia (Judge Contreras) emphasized that IEEPA's delegation of power to "regulate" imports does not include a power to tax imports. The two lines of argument are entirely compatible, but not identical.

The courts differed as to which court has jurisdiction. Both arguments are reasonable, though both cannot be correct. This does not matter for resolution of this controversy, however, because the two courts came to the same conclusion on the merits. Both cases are headed for the Supreme Court. Regardless of which trial court had jurisdiction, the Supreme Court will make the final decision.

[2.] Based on the arguments as they now stand, there is a high probability the decisions will be affirmed, in my opinion. There are no jurisdictional or procedural obstacles to a decision on the merits, as have plagued some of the Trump executive order cases. In its application to the Federal Circuit for a stay, Justice Department lawyers claimed that the CIT decision is "rife with legal errors," but has not said what they are. Perhaps the government will come up with persuasive arguments in its briefs in the Federal Circuit on June 9. As of now, however, the essential points in the courts' analysis are largely unrefuted. IEEPA grants various emergency economic powers, but makes no mention of tariffs, and has never before been used to impose tariffs. Interpreting it as a broad power to impose tariffs whenever the President declares an "emergency" would implicitly repeal the several statutes in which Congress did grant tariff authority, subject to procedural, substantive, and temporal limits not satisfied here.

[3.] What about the politics of the cases? I am not one to assume that federal judges vote according to their political loyalties, but even if they did, the politics here do not favor the Administration. The CIT panel, made up of one Reagan appointee, one Obama appointee, and one Trump appointee, was unanimous. This suggests that the challengers' arguments have bipartisan force. Both appellate courts to which the cases are headed—the Federal Circuit and the D.C. Circuit—have substantial majorities of appointees of Democratic presidents. To the extent that is relevant, it is not a favorable indication for the Administration.

Most important, the arguments of the challengers are squarely based on jurisprudential principles championed by the more conservative members of the Supreme Court: concern about excessive delegation, the major questions doctrine, and a formalist approach to separation of powers. As the CIT court stated, "Both the nondelegation and the major questions doctrines … indicate that an unlimited delegation of tariff authority would constitute an improper abdication of legislative power to another branch of government." These are the very types of argument the Roberts Court used to strike down Biden Administration initiatives such as student loan forgiveness, the covid-era eviction moratorium, mandatory vaccination, and expansive interpretation of the Clean Air Act to cover climate change regulations. Even if the Republican-appointed Justices were inclined to favor President Trump (which I do not think), it would be difficult for them to explain why the arguments that were fatal to Biden overreach do not apply with equal force to the tariff cases.

[4.] Justice Department lawyers have not attempted to claim any free-standing constitutional authority for the President to impose taxes—which would be difficult in light of the explicit grant of this power to Congress in Article I, Section 8—but President Trump himself has done so. On Truth Social, the President scoffed at the notion that the power to impose tariffs should rest with the legislative branch. "In other words, hundreds of politicians would sit around D.C. for weeks, and even months, trying to come to a conclusion as to what to charge other Countries that are treating us unfairly," he wrote. "If allowed to stand, this would completely destroy Presidential Power—The Presidency would never be the same!"

As I explain in my book, The President Who Would Not Be King, the Founders intentionally vested "hundreds of politicians," the representatives of the People, with the power to impose taxes, including tariffs. The idea that taxation could be a unilateral executive power would have been anathema. Readers may consult The Federalist, No. 58, for details. And although the President has substantial independent authority in the field of foreign affairs, the Founders gave Congress important foreign policy powers as well, including the power to regulate trade with foreign nations. Congress may delegate tariff-setting power to the executive, but it must do so explicitly, and only subject to an "intelligible principle" that guides and limits presidential authority.

[5.] Even if affirmed, these decisions leave the executive with substantial delegated authority over tariffs, under trade laws passed specifically for that purpose, and subject to congressionally-imposed limits of various kinds. The most broad-ranging, the Trade Act of 1974, might well support a new version of President Trump's 10% across-the-board tariff, if adopted through proper procedures. But it would not permit a permanent change to tariff levels or trade policy. Tariffs under the Trade Act are limited to 15% and to a duration of 150 days. If President Trump thinks we should return to a high-tariff policy like that of the 1800s, he will have to persuade the representatives of the People to go along.

Comments

[Area Man]

“In other words, hundreds of politicians would sit around D.C. for weeks, and even months, trying to come to a conclusion as to what to charge other Countries that are treating us unfairly.” –Trump

Yeah, it’s called a republic. The People choose others from amongst them who then go and deliberate and debate the policies of the day. Pretty sure that’s what We signed up for, and what most of us still want.

“If allowed to stand, this would completely destroy Presidential Power—The Presidency would never be the same!” –Trump

You promise? Because I would love to end the New Deal conception of the presidency. Maybe if we reduced the power of the presidency, we wouldn’t be on the verge of jumping off a cliff every election.

[Stupid Government Tricks]

It goes back to Wilson. The only reason the worse 1920-21 recession didn’t turn into the Greater Depression was because Wilson’s stroke left no on in charge. The Fed was too new, and all it tried to do was prevent the natural fall in prices after the war. (https://economics-charts.com/chart-of-consumer-price-index-1800-2005/ shows that prices increased during wartime and decreased afterwards.)

[Supremacy Claus]

We are sick of these lawyers over-ruling the elected President. They are dirty proponents of the Chinese Commie Party economic interests. They should be investigated for their ties to China and arrested if any is found.

[jb]

If you’re going to bot it up, at least try to do so where it seems like you’re responding to the previous comment.

[Riva]

You’re awfully sensitive, even for a pathetic little troll. Maybe you’re in the wrong business?

[Stupid Government Tricks]

“We”? Maybe you are. What I am sick of is immortal, coercive, monopolistic government, and I’d rather have judges who mistakenly overrule a President once in a while than have no checks whatsoever on a king, elected or not.

[MaddogEngineer]

Seconded! You’re making a point similar to what I’ve posted on several recent blog entries.

[Riva]

I’d sure like to know how that panel of trade court judges was chosen. There are reports that the judges were specifically selected, not randomly chose. No one seems particularly concerned into asking questions of a rather opaque process. So much for transparency. And of course, we have the oddly lightning fast determination issued after hours. One might begin to suspect the process was rigged.

[Noscitur a sociis]

For what it’s worth, Prof. Jack Goldsmith offers a more critical view of the decisions.

https://executivefunctions.substack.com/p/the-weaknesses-in-the-trump-tariff

[ah....Clem]

A very puzzling take from Goldsmith. He states “…I think the major questions doctrine will be the central issue before the Supreme Court when these cases reach it. ” I’m not exactly a fan of the MQD, but if it’s going to be applied here it seems like a slam-dunk that the legislature did not provide “broad plain-text authorization” for the president to unilaterally impose tariffs in the IEEPA.

He does bring up the question of whether the MQD applies to the president – previous applications have been to agencies of the executive branch, not the president itself. Seems to me that exempting the president, but not the rest of the executive branch, from the MQD is basically anointing him as king.

McConnell’s take seems much more on-point.

[MaddogEngineer]

I think this focus on the president doing it is mistaken. MQD is a restriction on Congress’s ability to delegate. It doesn’t matter who in the executive branch is trying to go beyond the statutory delegation, it’s whether the delegation is constitutional and authorized by law.

It wouldn’t make the tariff impositions here any less suspect if it were the secretary of commerce (or treasury) making this emergency declaration to set tariff rates (at the behest of a presidential executive order) or the president himself authorized by statute.

[TheAmazingEmu]

There is no logic to applying the Major Questions Doctrine to agencies rather than the President himself. Agencies are part of the Executive Branch so the same logic applies to all of it, not just some departments. If we’re going with the Unitary Executive theory, the agencies are just acting under the authority of the President, so the President would be equally bound. Arguably, the President should be more restricted, not less. He is not subject to rule making procedures and required to explain his decision-making. At least there are some procedural protections on agencies acting in excess of Congressional delegation.

Although, I suspect, with the death of Chevron, the Court won’t care about the Major Questions Doctrine anymore.

[Supremacy Claus]

This is all lawyer gibberish in support of Chinese Commie interests. These little Deep State tyrants should be removed, investigated and arrested for any ties to China.

[Stupid Government Tricks]

So far all you’ve done is rant. Do you have any actual relevant rants saved up for later, or are you binging the same one over and over?

[ah....Clem]

There is no logic to applying the Major Questions Doctrine to agencies rather than the President himself.

Agree with you and MDE about the lack of logic, but apparently McConnell doesn’t:

…it is an open question whether the MQD applies to congressional authorizations to the president. Every Supreme Court decision involving the MQD has involved agency action, and lower courts are split on whether the MQD applies to presidential authorizations. The district court relied on the MQD without facing this question. And it is not easy to answer. (emphasis mine)

[TheAmazingEmu]

It seems very easy to answer. I’d love to hear a good counterargument.

[Voize of Reazon]

MQD concerns how explicitly Congress must speak when it delegates a power, not whether the power can be delegated.

[David Nieporent]

MQD is a restriction on Congress’s ability to delegate.

No, it isn’t. The nondelegation doctrine is a restriction on Congress’s ability to delegate. The MQD is just a canon of statutory construction: should statute X be interpreted as granting this particular power?

(That having been said, you’re absolutely correct that it applies the same way to an agency or to the president.)

[jb]

A few things about Goldsmith’s analysis:

1) He acknowledges that he’s basically the only person in the “commentary” with this take.

2) I think the reason for this is that basically his entire argument rests on the idea that “Nixon did it too” (under a different law with the same language) and the Court of Customs and Patent Appeals affirmed Nixon’s use in US v Yoshida. But reading the various decisions here, I think the more recent decisions are more compelling than the CCPA in Yoshida in trying to get at what it means to “regulate” imports. Also, the CCPA based much of their support for Nixon’s tariffs on the limited nature of those tariffs–specifically that they still heeded specific tariff rates set by Congress and that they only applied to items that had been the subject of previous tariff concessions.

In addition, Goldsmith dismisses the fact that Congress passed the Trade Act to give the President the power to impose tariffs in response to trade deficits, by saying that it’s not an exclusive mechanism. However, part of the CCPA’s rationale for upholding Nixon’s use of the tariffs is that there was no other mechanism for him to address the balance of trade issue:

Reliance by the Customs Court on Youngstown Sheet Tube, as quoted above, is misplaced. We do not have here, as was the case in Youngstown, what the Customs Court described as “legislative acts providing procedures prescribed by the Congress for the accomplishment of the very purpose sought to be obtained” by a Presidential Proclamation. The surcharge did not run counter to any explicit legislation. We know of no act, other than the TWEA, “providing procedures” for dealing with a national emergency involving a balance of payments problem such as that which existed in 1971.

3) Even he acknowledges that Trump’s approach is likely to run into issues with the Major Questions Doctrine. The court rulings so far haven’t found the need to get to the Constitutional issues because they found that Congress did not, in fact, delegate the power to enable these tariffs. But the CIT noted that if that interpretation won out, it would be unconstitutional.

[GKHoff]

Maybe the Administration should argue that particular tariffs may be imposed by the President as ancillary to his broad authority to set and control foreign policy.

[Glaucomatose]

The Constitution says nothing about such a “broad authority.” The most it says on point is that the President can make treaties and appoint ambassadors, but even in those cases it explicitly requires the consent of the legislature. Meanwhile, Article I explicitly states that it’s Congress’s job to regulate Commerce with foreign Nations.

[Stupid Government Tricks]

Oh boy!

* Tariffs are a domestic tax. They are not foreign policy.

* Why does the Constitution delegate tariffs to the Congress, and not the President, if the President’s foreign policy power can institute tariffs? Following that logic, the President can also declare war all by himself.

* Would you be happy with the President unilaterally closing every single port, every single border crossing, and every single international airport? That sounds like foreign policy too.

[ah....Clem]

Following that logic, the President can also declare war all by himself.

Perhaps not the best example, since congress hasn’t declared war since WWII, or over 80 years ago.

De facto, the president can declare war all by himself.

[Stupid Government Tricks]

This is a legal distinction under discussion. Your de facto is meaningless. The President can also take a dump in foreign countries, or throw up on a prime minister, or trip on stairs.

[ah....Clem]

The point being that the US has gone to war in Korea, Vietnam, Iraq (twice), and Afghanistan without the legislature ever voting to declare it, as per Article I.

[Stupid Government Tricks]

Yes, that’s all true, and many more little wars all over the globe for two centuries. But that’s a different fudge and a different argument. The point is, the President might have made war, but he didn’t declare war. It’s a silly distinction, but the courts and Congress allow it.

[JoeFromtheBronx]

To authorize the use of United States Armed Forces against those responsible for the recent attacks launched against the United States.

https://www.congress.gov/107/plaws/publ40/PLAW-107publ40.pdf

[David Nieporent]

The president has no “broad authority to set and control foreign policy.” He has the exclusive authority to actually negotiate with foreign governments, but no other special power not given to him by Congress.

Also, tariffs aren’t foreign policy. That doesn’t mean that they don’t have an impact on our relations with foreign countries; obviously they do. But so do lots of things that are nonetheless obviously domestic policy. (No Republican would accept “Climate change is a matter of global concern about which the president is constantly speaking with world leaders; therefore, the president can unilaterally and arbitrarily set rules on carbon emissions.”)

[F.D. Wolf]

Whether or not decisions of the Court of Appeals for the Federal Circuit (and its predecessor, the Court of Customs and Patent Appeals) are correct, they are, nevertheless, binding precedent on the Court of International Trade, and, in this case, it is difficult not to conclude that the CIT ignored clear, binding precedent. (Said precedent probably being the reason Trump chose to use this route to impose tariffs, rather than any of the dozens of other clear congressional delegations of tariff authority to the President, which he will almost certainly do now.) The CIT and McConnell’s attempts to distinguish the cases are weak and unconvincing.

In 1971, President Nixon declared a national emergency under the Trading with the Enemy Act (TWEA), imposing an additional 10% tariff on imports. An importer challenged the tariff. The question before the court was whether the authority to “regulate… importation” under the TWEA included the power to impose tariffs. The Customs Court (predecessor to the CIT) held it did not. Yoshida Int’l, Inc. v. United States, 378 F. Supp. 1155 (1974). On appeal, the CCPA reversed, holding the power to “regulate… importation” encompassed the power to impose tariffs. 526 F.2d 560 (CCPA 1975).

The operative language in the TWEA:

investigate, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest

Two years AFTER the CCPA’s decision in Yoshida, Congress passed the IEEPA to address national emergencies in peacetime, limiting the TWEA to wartime emergencies. Here is the operative delegation language in the IEEPA:

investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States

So, aware of the Yoshida holding, Congress used the identical language, though, of course, it could have explicitly excluded tariffs if it had wanted to. If anything, this makes Trump’s case much stronger than Nixon’s, because, of course, the Congress that drafted the TWEA, unlike the Congress that drafted the IEEPA, did not have an interpretive court decision to rely on.

So, under the CIT’s logic, we are to believe that “regulate… importation” in the TWEA does allow the President to impose tariffs, but the identical language in the IEEPA does not. Either that, or the CIT ignored clear, binding precedent. I believe this case will ultimately be overturned. Either way, it is a virtual certainty the Supreme Court will have the last word on the subject.

[Stupid Government Tricks]

Could you explain to me exactly what circumstances could require an emergency tariff? It seems an odd beast.

[F.D. Wolf]

No, I cannot, but I didn’t study geopolitics or tariffs; I studied law. I imagine the circumstances that might require an emergency tariff are quite varied and, under current law, are left to the discretion of the President and Congress.

[Stupid Government Tricks]

Nice dodge. If I’d asked about an emergency Santa Claus decree, would you be similarly reticent?

[F.D. Wolf]

Sorry, if my answer wasn’t good enough for you, then I guess you don’t get one.

[Stupid Government Tricks]

You didn’t supply an answer. I didn’t ask for a dodge or a lawyerly quibble. I asked if anyone could think of any reason to have an emergency tariff, because it seems preposterous.

[jb]

I was curious about whether CCPA decisions turned into precedent under the Federal Circuit. It seems reasonable that they might, but is this clearly established? (I’m just curious about this and don’t know the answer.)

I do find the analysis by the CIT more compelling than the Yoshida court, but you’re right that it’s not their place to ignore the precedent here if they disagree with it. Having said that, after reading Yoshida I do think there are some important distinctions that I point to in my post above since they seemed central to the CCPA’s rationale.

[Noscitur a sociis]

They are binding, and ruling that was the first decision that the new circuit court issued. South Corp. v. U.S., 690 F.2d 1368 (Fed. Cir. 1982).

[Noscitur a sociis]

You may not find it persuasive, but the opinion does discuss Yoshida extensively.

[riemannzeta]

“If President Trump thinks we should return to a high-tariff policy like that of the 1800s, he will have to persuade the representatives of the People to go along.”

How could it be otherwise? If words have any meaning at all, then it’s crystal clear that the Constitution grants this authority to Congress, not the President. Any sophistry that purports to conclude otherwise can only be understood as a land grab by those who want a monarchy.

The argument by Goldsmith and others that somehow the Major Questions Doctrine grants the President more leeway to levy taxes by Executive Order than it does Administrative Agencies despite their acknowledgment that the Agencies are an arm of Congress is absurd on its face. Why should the less deliberative act of authority get less scrutiny? Even if words didn’t matter?

[Rog1]

I realize that most of you are smart lawyers (although some of us might consider that an oxymoron), but the fundamental flaw in this whole dispute is Trump’s claim that other countries are “treating us unfairly.” There is no factual basis for this complaint. I appreciate that whether Trump is insane or just stupid is not the subject of this discussion, but it would be much more productive than arguing about the Constitution, which Trump has chosen to ignore.