President Donald Trump’s 10% tariff on imports from around the world took effect on the 5th. Individual tariffs on 'worst-offending countries' with high trade surpluses with the U.S. will be implemented on the 9th, as U.S. corporations and legal entities have begun litigation, forecasting other legal disputes concerning the authority of the administration.
According to the Wall Street Journal (WSJ) on the 6th, the first lawsuit was filed by the Florida-based small business Simplified. The company, which manufactures stationery using materials from China, initiated a constitutional lawsuit, stating that the tariffs imposed on Chinese products are causing significant harm to its operations. Another public interest group, Liberty Justice Center, is also preparing to file a lawsuit.
As a result, whether the president's unilateral authority to impose tariffs is indeed consistent with the Constitution and laws has emerged as a key issue.
Examining the president's authority to impose tariffs, the U.S. Constitution attributes the power to levy taxes, including tariffs, and regulate trade with foreign nations to Congress. However, since the 1930s, Congress has gradually delegated some of that power to the administration, thus expanding the authority of the president.
In particular, President Trump cites the International Emergency Economic Powers Act (IEEPA) as the basis for increasing tariffs. This law allows the president to broadly regulate economic relations with foreign nations in the event of an 'unusual and extraordinary threat' to national security or the economy. President Trump has defined issues such as the smuggling of fentanyl from China, illegal immigration, and trade imbalances as 'unusual and extraordinary threats.' According to the WSJ, past presidents have utilized this law for sanctions such as freezing the assets of foreign terrorists. This is the first time the law has been applied to increase tariffs.
◇ "Inadequate legal basis for tariff policy... Unilateral legislation by the administration is unconstitutional"
The core issue is whether the courts will recognize the IEEPA as the basis for the tariff policy. The IEEPA does not explicitly authorize tariffs. In response, the Simplified side argues that this action is an abuse that deviates from the purpose of the law.
Additionally, there is a possibility that this measure could be deemed unconstitutional under the 'Major Questions Doctrine.' The Major Questions Doctrine is a principle in U.S. administrative law, which states that regulations concerning economically or politically significant matters should be decided by Congress. Previous actions by the Biden administration, such as student loan forgiveness and mandatory Covid-19 vaccination measures, were discarded under this standard.
Ilya Somin, a professor at George Mason University preparing the lawsuit against the administration for the Liberty Justice Center, pointed out, "Legislative power is a unique authority of Congress under the Constitution, and the president cannot exercise it unilaterally."
◇ The administration is likely to argue, "The president's determination of urgency is an overreach by the judiciary"
On the other hand, officials from the Trump administration are likely to argue that the IEEPA encompasses tariff imposition. Furthermore, the judiciary is expected to assert that it cannot interfere with the president’s judgment of 'a sufficiently urgent circumstance to implement tariff policy,' according to the WSJ. They may also justify the tariff policy as part of the president’s authority to conduct foreign policy.
According to the WSJ, the past administration of Richard Nixon also imposed a 10% import tariff in 1971 due to a decline in export competitiveness caused by the surge in the dollar. At that time, the court recognized the IEEPA as the basis for increasing tariffs. However, President Trump’s tariffs exceed 50% and are expected to last longer than those during the Nixon administration, which may lead to a different court ruling.
The WSJ noted, "Considering the significance of the matter, the court may expedite hearings, potentially elevating the case to the Supreme Court within months," quoting Noah Feldman, a Harvard University professor who predicted, "The current conservative Supreme Court is unlikely to easily intervene."