Trump invoked the International Emergency Economic Powers Act (IEEPA) to impose tariffs on all countries, upending the long-standing US policy of free trade. This was challenged in court. This is my notes after listening to the oral arguments in the Supreme Court.

When analyzing Supreme Court decisions, it’s essential to consider the various legal doctrines that justices may employ in their reasoning. Legal doctrines serve as guiding principles that help justices interpret statutes and constitutional provisions. Here are some of the major doctrines that are mentioned in cases involving executive power and statutory interpretation. They were mentioned often.

Major Question Doctrines

This doctrine holds that courts should be skeptical of executive actions that have vast economic and political significance unless Congress has clearly authorized such actions. It can’t be some vague and/or ambiguous wording in a statute interpreted by the court into granting unintended powers, when the stake is very high. In the context of Trump’s tariffs, where the stake to the economy is surely high, the question would be did the Congress intended to allow the president to impose tariffs with such economic significance? I think in this case, regulate importation doesn’t seem sufficient to allow trillions worth of tax/tariff being imposed.

Non-Delegation Doctrine and Intelligible Principle

This doctrine asserts that Congress cannot delegate its core powers to the executive branch. You simply can’t abdicate from your constitutional duty as a legislative body by giving the executive branch too much of your law-making authority. In practice though, it is somewhat a necessity for Congress to delegate executive branch to implement laws as regulations. So there’s some tension in this doctrine itself, as delegation is normal part of law implementation process. Then comes the “intelligible principles”, which says that when Congress does delegate, it needs to provide clear guidance on how such power should be exercised. So I guess the more “core” the power Congress is delegating, the more careful it needs to make its intention abundantly clear. On the flip side, if the power so delegated, also intersect with presidential power, less scrutiny’s applied. That’s why president gets a lot of leeway when it comes to foreign policy and wars.

The question in this particular case is whether the statutes granting tariff authority to the president provides sufficient guidance. And in this case, “regulate importation” is about the only thing you can find, and thus can’t be considered an intelligible guidance in my opinion.

IEEPA and TWEA

The question at the center of this controversy, is the IEEPA (International Emergency Economic Powers Act), and as a legislative history, the TWEA (Trade With Enemy Act) before it. Basically, TWEA was enacted during World War I to give the president broad authority to regulate trade with enemy nations. Being a wartime measure, it’s extremely broad, allowing president to do pretty much anything when it comes to trade relationship with enemy nations and their nationals. It was subsequently expanded to cover other national emergency during the New Deal era, to any emergencies so declared by the president, and FDR used it (well, it was created for FDR) to close banks and ban gold hoarding in 1933. By the time of Nixon, US had been technically in emergencies continuously for over 40 years1. So Congress finally decided in 1977, enough is enough, and enacted IEEPA to limit the president’s emergency trade powers.

The Arguments

Textual Arguments

So what does IEEPA actually say? What would a textualist think about this case? The statute provides the following powers to the president during emergency (ignoring the procedure and triggered aspects for now):

“by means of instructions, licenses or otherwise” … “investigate, regulate, or prohibit” … “investigate, regulate” … “importation or exportation” …

This distills into three verbs and one noun: prohibit, regulate, importation, and licenses. The word prohibit establishes the power to embargo, the regulate importation is what’s being invoked to grant tariff authority, and licenses is discussed as being synonymous in effect to tariff. The administration’s key point is that tariff is the “quintessential” form of regulation of importation, from the founding of this republic.

To me, it is not out of the questions to say the president has the authority under IEEPA to impose tariffs, as to me regulate importation seems lead straight to tariff. But the power to tax and tariff is squarely the realm of Congress, so the reading of IEEPA to grant tariff power runs straight into the non-delegation doctrine. Was Congress really intended to delegate such core power?

To get away from Non-Delegation Doctrine, the administration argued that in the context of foreign affairs, the president has broad inherent Article II powers. This weakens the non-delegation doctrine. There was discussion around context: e.g. in war, or occupation, the president’s power is broader. The court had upheld president’s power to impose duties in such context (Lincoln, Philippines), during war or in conquered territories. So the question is whether the context of foreign affairs is sufficient to broaden the president’s power to impose tariffs, which I doubt is the case, as there’s just way too supporting evidences.

The Arguments Around Less Power

It is clear and generally accepted that the president can embargo trade with certain countries (the verb prohibit). It then stands to reason that lesser power, like imposing tariffs would naturally follow as a less dramatic measure. Though one other kind of lesser power, such as quota are generally allowed, but tariff’s more controversial, due to its revenue-raising nature. Remember the Boston tea party!

I think this is a plausible argument, but quota seems to be clearly the preferred, or intended lesser power for the president to leverage, not tariffs.

Around Licenses

It is argued that the noun licenses in the statute allow the collection of fees, which is functionally equivalent to tariff. This is not convincing because first, the licenses is used as a noun to enable subsequent verbs. And historically, issues licenses do not always involve fees. As a matter of fact, it seems in most, if not all cases when license requirement’s imposed in IEEPA, there is no fee involved.

Foreign Tax vs Domestic Tax

Due to the president’s Article II power in foreign affairs, there’s discussion around if taxation power can be delegated in the foreign context. From what I can tell, the court gave presidents leeway in actual war and occupation context, but haven’t done so in foreign trace context, at least not yet.

Regulatory Tariff vs Revenue-Raising Tariff

To get away from the non-delegation doctrine (of taxation power), the administration argued that the tariff imposed is regulatory in nature, not revenue-raising. Basically calling it not a tax, any revenue generated are incidental. They claim that the goal is to protect domestic industries, that the best case is when zero tariffs are collected, if people just go buy domestic goods instead of foreign goods. I think there’s some interesting theory here, but in practice this is a smokescreen. Well, Lutnick says otherwise, bragging about trillions of dollars of revenue raised.

The One-Way Ratchet

There’s concern that delegating power to president is a one way ratchet. Once congress delegates, or interpreted by the court to delegate, it is hard to take back, as the president can always veto legislation to get it back. So realistically, for Congress to take back such delegation, you will need a super majority to override a presidential veto, which is a very high bar. This is another way of saying the non-delegation doctrine, but if there are two ways of saying the same thing and brought up by various justices, it shows how important this concern is.

And there was discussion around defunct practice of legislative veto, where one chamber of Congress can veto by passing a resolution, thus making getting back power easier for Congress. This practice was struck down by the court in the 1980s, on the ground that the only proper way to legislate as defined in the Constitution was to pass a law (legislative veto is one form of law making) through both chambers and present to the president for signature or veto.

Is the Emergency Powers Inherently Broad?

There is an argument that emergency powers are inherently broad, as in the emergency situation, you want to give the executive branch enough power to address emergency. On the other hand, emergencies begets emergencies, someone lamented before. As a result, the statute for emergency power tend to be broad, but constrained in other ways, such as limited in time (150 days), in intensity (10% tariff), for example, in Trade Expansion Act.

In The Court Room

Fireworks began from the very beginning. Every justice piled on the solicitor general with questions, showing their skepticism.

The justices sometimes didn’t know details. This is both surprising and unsurprising to me. It’s unsurprising as the whole point of US’s adversarial legal system is that opposing sides have the best incentives to do their homework and present the best arguments, much better than any judge could do on their own. On the other hand, it is still surprising to me, as I guess I still think unconsciously, the justices should know everything about the case. It’s also interesting to see some justices who are more prepared with facts. While it’s good to be prepared, those who are prepared, tend to do so with the aim to swing other justices’ opinions, thus often appear to have an agenda, which I don’t like.

The solicitor general Sauer knows how to twist words, and put on an impressive show, I think, in an otherwise skeptical court. Government went first, and I was impressed and got the impression maybe there is more to this story. Though later when I checked his claim, such as IEEPA is not there to limit presidential emergency power, I found it to be false. Such half truth claims weakens his credibility in my opinion. Another of such case is the claim of Nixon imposed tariff under TWEA, the predecessor of IEEPA. That was a half truth again, as while Nixon did impose tariff, it was under a different statute. When it was challenged in court, the administration retroactively used TWEA as justification. And while intermediate court did mention their interpretation of regulate importation as authoring tariff, the precedent was not established at Supreme Court level.

My Prediction

  1. I think the court will rule against the administration, by a near unanimous vote, if not unanimous vote. There are just too many avenues for each justices to find a path to arrive at that conclusion.
  2. I think they would probably only provide prospective relief for non-parties to the suits, as to not to be too disruptive to the existing tariff regime.

  1. Congressional Report: The International Emergency Economic Powers Act: Origins, Evolution, and Use, link ↩︎