(Independent Institute)—The United States Court of International Trade (USCIT) has issued a sweeping ruling against the Trump administration’s so-called “liberation day” tariff policies. The ruling holds that Trump exceeded his statutory authority by unilaterally imposing tariffs under the International Emergency Economic Powers Act (IEEPA) of 1977. It further held that the president’s “Tariff Orders will be vacated and their operation permanently enjoined.” In effect, the courts just liberated the United States from the White House’s protectionist trade war.
The USCIT ruling comes out of a challenge filed by the Liberty Justice Center and George Mason University law professor Ilya Somin. It was the first of many concurrent cases that challenged Trump’s claimed IEEPA authority, and constitutes a major setback for the administration.
Briefly, the issues with IEEPA tariffs stem from their unconstitutional implementation. The U.S. Constitution grants “Power To lay and collect Taxes, Duties, Imposts and Excises” to Congress alone. Tariffs are a form of taxation covered by this clause, meaning they cannot be imposed by a unilateral decree of the president. Previous court rulings dating back to the 1920s have allowed Congress to delegate its tariff powers to the executive branch in certain specific circumstances, such as the counteracting of alleged “dumping” from abroad or for national security reasons connected to specific products or industries. While the wisdom of these delegations is questionable in its own right, the courts have upheld them so long as there is an “intelligible principle” defined in the accompanying statute.
IEEPA has no such intelligible principle for delegating the tariff power to the president. In fact, it does not even mention the word “tariff.” Trump and his legal team invented and claimed an IEEPA tariff power out of thin air, and then proceeded to act as if it allowed him to set tariff rates at his own personal discretion. In fact, Trump recently claimed on a Truth Social post that “I am empowered to ‘SET A DEAL’ for Trade into the United States if we are unable to make a deal, or are treated unfairly.”
Not so fast, Mr. President. As the USCIT ruling shows, you do not possess that power. Only Congress does.
For those of us who have been following the ongoing trade war, the court’s ruling illustrates that bad economics are not the only problem with Trump’s tariffs. They are also at odds with our entire system of constitutional government.
Last month, our Anti-Tariff Declaration, signed by hundreds of top economists and other scholars, called attention to the legal defects of the administration’s position:
The “Power To lay and collect Taxes, Duties, Imposts and Excises” was constitutionally reserved to Congress as the direct and explicit representatives of the people. The April 2 tariffs have been imposed without that body’s consent, and without any intelligible guiding principle. Instead the judgment and rightful power reserved to Congress, and so to the people, has been replaced by unilateral executive decrees, justified by improvised claims of emergency under a statute that does not even contemplate authorizing tariffs. This seizure of power is unconstitutional.
As of this writing, the court’s ruling orders the immediate termination of the existing IEEPA tariffs. The White House is almost certain to appeal, seeing as this outcome effectively takes away the president’s favorite new toy.
A lengthy appellate battle is likely in the months ahead, and will probably require a U.S. Supreme Court ruling before the IEEPA tariff menace is banished. Let May 28, 2025, serve as our true Liberation Day—a day that our economy was freed from punitive taxation and government by arbitrary executive decree.
Author: Phillip Magness