(Courthouse News Service)—A Court of International Trade panel ruled Wednesday that President Donald Trump did not have the authority to levy blanket tariffs against foreign trade partners under a Nixon-era statute intended to define the executive’s role over economic transactions during a national emergency.
“The question in the two cases before the court is whether the International Emergency Economic Powers Act of 1977 delegates these powers to the president in the form of authority to impose unlimited tariffs on goods from nearly every country in the world,” the panel wrote in the per curiam opinion. “The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder.”
The three-judge panel, made up of U.S. judges Gary Katzmann and Timothy Reif, a Barack Obama and Trump appointee, respectively, and Senior U.S. Judge Jane Restani, a Ronald Reagan appointee, separated Trump’s tariffs into two buckets: the 25% “trafficking tariffs” imposed on Jan. 20 for Mexican and Canadian products and 20% for Chinese products over apparent fentanyl trafficking; and “worldwide and retaliatory tariffs,” a blanket 10% imposed on 57 countries, with additional rates ranging from 11% to 50%.
Wednesday’s ruling does not impact the “trafficking tariffs,” as they fall outside the cases brought to the panel.
Wednesday’s ruling stems from two lawsuits brought by a coalition of small businesses — led by V.O.S. Selections Inc., a New York-based wine and spirits business that imports its many of its products — and 12 state attorneys general, led by Oregon.
They argued that only Congress has the authority to levy tariffs under the statute, which only conferred to the president emergency powers for conduct such as increasing inspection at ports.
White House spokesman Kush Desai said in an emailed statement that foreign countries’ “nonreciprocal treatment” of the U.S. has increased trade deficits.
“These deficits have created a national emergency that has decimated American communities, left our workers behind and weakened our defense industrial base — facts that the court did not dispute,” Desai said. “It is not for unelected judges to decide how to properly address a national emergency. President Trump pledged to put America first, and the administration is committed to using every ever of executive power to address this crisis and restore American greatness.”
At oral arguments, the business coalition’s attorney Jeffrey Schwab of the Liberty Justice Center argued that allowing Trump’s tariffs to stand would amount to an impermissible delegation of congressional power and would allow him to impose tariffs “on any country at any time, for virtually any reason.”
Further, Schwab argued the tariffs should be struck down because it invoked the major questions doctrine — under which the Supreme Court has required clear congressional authorization for federal agencies to act on issues of “vast economic and political significance” — and Congress made no clear indication in IEEPA granting the president tariff authority.
Justice Department attorney Eric Hamilton asserted that the IEEPA had sufficient limitations: the president must declare a national emergency, the emergency expires after one year without renewal, the emergency must be declared in response to an “unusual and extraordinary threat,” and must only apply to property a foreign country or nation has an interest in.
The panel was not convinced the conditions had been met.
“An unlimited delegation of tariff authority would constitute an improper abdication of legislative power to another branch of government,” the panel wrote. “Regardless of whether the court views the president’s actions through the non delegation doctrine, through the major questions doctrine or simply with separation of powers in mind, any interpretation of IEEPA that delegates tariff authority is unconstitutional.”
Immediately following the ruling, the Trump administration appealed the decision to the United States Court of Appeals for the Federal Circuit in Washington.
Trump has touted his tariffs as a central to his economic agenda and as an effort to tamp down trade deficits between the United States and the rest of the globe, starting with a blanket 10% tariff on all imports on April 2 before issuing a 90-day pause when the stock markets melted down.
During a so-called “Liberation Day” event, Trump introduced a set of reciprocal tariffs set at different percentages for certain trading partners — including several uninhabited islands — with higher rates for those with purportedly higher trade deficits.
In his executive order imposing the blanket tariffs, Trump declared a national emergency regarding the trade deficits, painting them as a threat to the nation’s national security and economy.
Author: Ryan Knappenberger