"Using History to Help Settle the Question of Presidential Tariff Powers" (Philip Zelikow)

My Hoover Institution colleague Philip Zelikow was kind enough to pass this along; he is an emeritus history professor at the University of Virginia, but also a lawyer:

As a lawyer and historian who also served in five administrations of both parties, including much involvement with wars and emergencies, it was interesting to read the clashing opinions of the Federal Circuit decision in the tariffs case, now before the Court. That clash was recently rehashed in the Executive Functions substack by Jack Goldsmith and Bob Bauer. I am on an amicus brief in that case, supporting the view that the presidential tariffs are unconstitutional. Like Goldsmith and Bauer, both sides in the appellate court pick at pieces of the history here, but miss much of the broader context. Understanding that history of how Congress has handled trade makes the case much clearer.

With tariffs, the need to balance domestic concerns and foreign affairs flexibility was already apparent when the Constitution was written and the tariff power was explicitly assigned to Congress. Also, the debate has missed the deep way in which the President's actions in April 2025 junked the entire tariff approach that both pro-tariff and anti-tariff sides in America had adopted more than a hundred years ago, an approach founded on the principles of reciprocity, equal treatment, and non-discrimination.

Understood in its historical context, IEEPA makes sense, especially in the context of the historic Trade Act of 1974 that complemented and substantially replaced the previous landmark Trade Expansion Act of 1962. Congress had covered all the bases, including concerns of balance of payments or national security worries about sectoral protection.

Once the history is understood, it seems obvious that Congress, in passing IEEPA in 1977, did not mean to empower a president to disregard it all, something no president—including Nixon in 1971—had done. This point carries over to those concerned about flexibility in foreign affairs, since—as in 1787—tariffs set at executive whim had the foreseeable danger, even more present today, of introducing impractical chaos into foreign affairs and the terms of trade even with America's friends.

Originalism

Tariffs or imposts or taxes on imported goods were a central feature of American political debate before and after the republic was founded. At the time the Constitution was written the United States had been wrestling over how to allocate such authorities. At the Founding, all understood the need to balance concerns about authority over foreign affairs with the authority to address the needs of American consumers and merchants. It was a difficult choice. The Founders chose, quite firmly and clearly, to assign that tariff power to Congress.

From 1787 to before the First World War, the usual pattern was that America had tariff rates determined by Congress. European countries had discriminatory trade policies. They had their empires and sometimes set imperial or colonial preferences in their tariff rates. They offered lower rates if you had a trade agreement with them. Congress set tariff rates and if the U.S. wanted a trade deal it negotiated a treaty on commerce and navigation with a country. That treaty had to be ratified by the Senate. A concession given to one country did not apply to any others. The old approach invited discrimination against American products.

In 1919 the Republicans were a pro-tariff party. The Democrats were against tariffs. Tariff issues were mainly matters of domestic policy. Democrats—especially in the rural South and West—wanted lower prices for goods and free trade for farm products. Republicans wanted industrial protection and more federal revenue. Leaders in both parties agreed, however, that the incoherent patchwork of tariff rates and country-by-country trade agreements had become unworkable for the advanced America of 1919.

Influenced by a landmark report of the bipartisan U.S. Tariff Commission, Democratic and Republican leaders, pro and anti-tariff, chose a new approach. The historian Douglas Irwin calls this 1919 report "one of the most influential government documents on trade since Alexander Hamilton's Report on Manufactures." (Irwin, 362) The argument was that, as a practical matter, the US could not realistically have a country-by-country trade policy anymore. Instead, the Commission argued, the US should pursue an approach of equality of treatment among nations.

"It can not be too much emphasized," the Commission wrote, "that any policy adopted by the United States should have for its object, on the one hand, the prevention of discrimination and the securing of equality of treatment for American commerce and for American citizens, and, on the other hand, the frank offer of the same equality of treatment to all countries that reciprocate in the same spirit and to the same effect. The United States should ask no special favors and should grant no special favors. It should exercise its powers and should impose its penalities, not for the purpose of securing discrimination in its favor, but to prevent discrimination to its disadvantage." (US Tariff Commission, 'Reciprocity and Commercial Treaties,' 1919, 18) "Most favored nation" status would mean reciprocal equal treatment, whatever the tariff rate set for one or another product.

Once they regained the Presidency and Congress in 1921, Republicans adopted the new approach in their tariff bills, especially the Fordney-McCumber tariff law of 1922. Section 317 of that law gave the president power to punish, with tariffs up to 50%, any country which refused equal treatment and discriminated against the United States. America's trading partners moved to accept this approach, which enshrined reciprocal unconditional "most favored nation" treatment. Trade partners might or might not have tariffs. But if there were tariffs, the tariffs were applied equally to all.

When the Republicans again raised tariffs in 1930, in the famous Smoot-Hawley law, section 338 of that bill reenacted the same section 317 penalty. Senator Reed Smoot (R-UT) had long been a major proponent of equal treatment. Anti-American trade discrimination faded. The tariff power to penalize discrimination was never used. Other statutes eventually covered specific worries about trade deficits, national security, and "unfair trade practices."

Tariffs target Americans—importers directly; other businesses and consumers indirectly. Taxation is not an area in which the President has independent constitutional authority of his own.

Sanctions, or embargoes, targeted foreigners. The distinction is crucial. Sanctions were, fundamentally, refusals to trade with threatening foreign governments. They empower the President where he has his own independent constitutional powers of national defense. Sanctions are quite explicitly discriminatory, singling out bad governments. Under the American approach adopted after 1919, tariffs did not discriminate. In contrast, a fundamental sanctions authority was the Trading with the Enemy Act (TWEA) of 1917 which granted a power to "regulate … importation" of foreign property, until IEEPA supplemented and partly replaced it in 1977, using the same language.

Pro-tariff Republicans, writing Fordney-McCumber in 1922 or Smoot-Hawley in 1930, would never have dreamed of arguing that they could just get their tariffs by asking their president to use the language of the 1917 TWEA. None of these leaders thought the Congress had already handed their constitutional power over tariffs to the president even though—in both those cases—the Republicans had a president in power from their own party and thought they were responding to economic emergencies that had partly foreign causes.

Crisis and Response in the 1970s

During the cold war the U.S. tended to enjoy favorable trade conditions as Europe and Asia recovered and grew. Sectoral concerns, like a desire to protect American manufacturing on national security grounds, was handled by Congress in section 232 of the cold war-era 1962 trade law. Jack Goldsmith originally made his arguments for broad interpretation of legislative grants of trade authority to the president mainly in this context, of defending the use of 232 authority in borderline cases where the real motives were more suspect. His arguments may be right—in that context.

By the beginning of the 1970s the favorable postwar conditions had changed, for reasons both domestic and foreign. U.S. policymakers faced what they regarded as a balance of payments crisis. This was a rather novel kind of problem that arose in the context of the Bretton Woods international financial system created at the end of the Second World War. It threatened a drain of gold reserves or rapid depreciation of the dollar.

There was no obvious congressional authority to empower a presidential response to this emergency. In August 1971 President Nixon abandoned the Bretton Woods system and placed a temporary surcharge on imports. His administration eventually claimed that TWEA gave them the authority for this. The surcharge ended four months later as the White House negotiated the first in a series of agreements to restore stability to the international financial system.

A key point to note is that Nixon's 1971 move, as radical as it was, was still non-discriminatory. All countries covered by the surcharge were treated alike. The principle of 'most favored nation' status remained good. The basic congressional approach to tariffs enshrined since 1922 remained intact. Meanwhile, in 1974, Nixon's surcharge was declared unconstitutional by the predecessor to the current Court of International Trade.

Responding to this crisis, Congress enacted the landmark Trade Act of 1974. It clarified authority on all the outstanding issues. The beginning of the Act laid out how presidents should do trade deals, which required congressional approval. Huge efforts were later expended to sometimes seek "fast track authority" to expedite that process. No one in those intense debates over grants of 'fast track authority' argued that they were really all wasting their time because (didn't they know?) presidents already had plenary tariff-setting emergency power in IEEPA.

The apparent gap in authority in 1971, the fear of sudden "balance of payments deficits," was closed with section 122 and with section 201 of that Trade Act. Both sections 122 and 201 were plainly meant to handle emergency situations. Section 122 was meant to deal with current account deficits or surpluses that messed with the value of the dollar. Section 201 was meant to deal with a situation where countries were trading fairly with us but we needed to deal with a sudden surge of imports.

If countries weren't trading fairly with us we have separate provisions for anti-dumping and countervailing duties (sections 1671-1677n of the 1930 law as amended), discriminatory barriers targeting American products (section 338 of the 1930 Act), or unfair trade practices (section 301 of the 1974 act, as amended).

 

All of this was in a general tariff system in which all U.S. tariffs, whatever their authority, were non-discriminatory, unless the country was unfairly trading with us in one of the specified ways.

The dissent in the Federal Circuit decision in the current tariffs case, by Judge Taranto, argued that section 122 did not address President Trump's national security claims about dangers to American manufacturing or agriculture. What Judge Taranto did not mention was that the Trade Act of 1974 did not need to address such sectoral concerns because they had been covered by the national security authorities already granted in section 232 of the 1962 act. Those are the authorities Professors Curtis Bradley and Goldsmith have defended, (on pages 1787-89, 1796-97) and where the evident congressional intent invites an interpretation of broader delegation as it combines with an area of independent presidential power. Those are the authorities President Trump has already used in sectors like steel and automobiles.

Those 232 authorities, and those tariffs, are limited and non-discriminatory, like all tariff authorities Congress has granted since 1922.

IEEPA Did Not Codify a Permanent State of Exception to Normal Tariff Authorities

In 1975 the appellate court that was the predecessor to today's Federal Circuit overturned the 1974 decision invalidating the Nixon surcharge. We should have a heart and extend some empathy to the appellate judges facing that case.

The August 1971 surcharge was long gone. It had ended in December of that year. The Nixon administration had faced a desperate balance of payments emergency and had not known where to find authority to take some temporary action. As time passed the administration came up with the idea of using the TWEA "regulate … importation" argument. The only issue in 1975 was whether to force the government to pay back the importers.

The appellate court chose to give the government a one-time pass. It reversed the district court and accepted the TWEA argument. It then tried to wall off this decision and make it clear the pass was for one time only. It noted how section 122 of the Trade Act had addressed the problem. The court told all future readers, in effect, "Don't, please don't, see our decision as granting broad tariff authority to the president." It stressed that it was not trying to amend the Constitution's grant of tariff authority to Congress.

The Trump administration, of course, now argues that the appellate court did all these things it said it was not doing. It is far more plausible to argue that, in 1977, Congress did not think it was doing any of these things because it thought the problem had been solved.

The Trade Act of 1974 had stitched up the remaining seams of explaining the scope of congressional authority to cut trade deals or do tariffs. The TWEA-style language could go back to what it had always done—empower sanctions against wicked foreigners.

Action against such foreigners was exactly the issue when the Supreme Court visited the IEEPA language in the Dames & Moore case in 1981. Different language was in play; IEEPA was used to freeze Iranian assets after American diplomats were taken hostage in 1979. The case arose when the U.S. negotiated the Algiers Accords to get the hostages back in exchange for putting the assets into a prolonged arbitral process. The plaintiffs had their own complaints against Iran and wanted a piece of the assets. The Court protected the government's right to do its deal, while also stressing the case should not be used as a precedent.

Nothing has indicated that IEEPA was meant even to allow future temporary surcharges of the kind the Nixon administration had employed in 1971. Congress has covered how to do trade deals, how to protect sectors of national security importance, and how to handle balance of payments emergencies.

The issue in the tariffs case is far larger. Taxation of Americans is not an area where there is independent presidential constitutional authority. His actions also go against generations of manifest congressional intent. By decree, President Trump has entirely overthrown the trade policy of 'equal treatment' and non-discrimination that set up the whole structure of U.S. trade law and 'most favored nation' status that emerged from the bipartisan compromises laboriously enacted between 1919 and 1922 and have been followed ever since.

Even if Congress had noticed or approved of the appellate court decision in 1975 on Nixon's surcharge, it is hard to infer that it thought IEEPA could be used to overthrow the whole tariff system, a structure that had coexisted with the earlier TWEA, and allow the president to set up his own taxation and revenue system. This is a prime situation where the major questions doctrine would seem to limit presidential overreach.

On his own authority President Trump has returned the United States to the patchwork that prevailed before the First World War, the patchwork that seemed unworkable in 1919. But he has done so with a singular difference. Before 1919, the problem was the difficulty in making trade agreements because all the presidents obeyed the Constitution. Congress set tariff rates and ratified trade treaties. Now, the chaos is compounded by the disregard of any meaningful governing authority, constitutional or statutory.

This approach would have appalled past pro-tariff Republicans. Tethered only to one man's whims, this approach to tariffs and taxes will probably also be found to violate the Constitution. Thus, compounding the chaos, the U.S. government is likely to be required to refund to Americans, with interest, the tens of billions of dollars already collected under the unlawful use of emergency powers—a liability that grows by hundreds of millions of dollars every day that system stays in place. Meanwhile the administration invites a whole new era of uncertainty and discrimination against American products, as countries compensate with new kinds of trade arrangements.

The President should make his tariffs case to Congress and the American people. Regardless of what they decide, they should heed the lessons that even the advocates of tariffs had drawn from their experience in a growing world economy of the late 19th and early 20th centuries. If tariffs are to be good policy, they should be practical, predictable, and retain the principle of equal treatment.