President Donald Trump’s administration filed a notice to appeal to the United States Court of Appeals for the Federal Circuit regarding the ruling striking down Trump’s tariffs for a dozen countries.
(I’m writing this in a noisy airport. I hope it makes sense!)
The U.S. Court of International Trade struck down Trump’s tariffs, stating he exceeded his authority under the International Emergency Economic Powers Act (IEEPA).
(This court is located in New York City. It covers any civil actions regarding international trade laws, obviously including tariffs.)
Five businesses sued the administration: V.O.S Selections, Plastic Services and Products, Microkits, FishUSA, and Terry Precision Cycling.
Eleven states joined the lawsuit: Oregon, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, and Vermont.
The Court pointed to U.S. Const. art. I, § 8, cl. 1, which states that the power to develop and collect taxes, duties, imposts, and excises belongs to Congress.
The tariffs targeted in the lawsuit:
It is important to know there are two types of tariffs.
The judges explained they read the “IEEPA’s provisions to impose meaningful limits on any such authority it confers,” mainly two of them:
First, § 1702’s delegation of a power to “regulate . . . importation,” read in light of its legislative history and Congress’s enactment of more narrow, non-emergency legislation, at the very least does not authorize the President to impose unbounded tariffs. The Worldwide and Retaliatory Tariffs lack any identifiable limits and thus fall outside the scope of § 1702.Second, IEEPA’s limited authorities may be exercised only to “deal with an unusual and extraordinary threat with respect to which a national emergency has been declared . . . and may not be exercised for any other purpose.” 50 U.S.C. § 1701(b) (emphasis added). As the Trafficking Tariffs do not meet that condition, they fall outside the scope of § 1701.
The panel went with the plaintiffs’ argument that “regulate…importation” in 50 U.S. Code § 1702 – Presidential authorities, specifically (a)(B), have a narrow interpretation.
Citing Jennings v. Rodriguez, courts can “adopt an alternative” interpretation if statutory language might lead to multiple interpretations, including one “that raises serious constitutional doubts.
That means the judges interpreted the section to mean that “under any construction that would comport with the separation-of-powers underpinnings of the nondelegation and major questions doctrines, does not authorize anything as unbounded as the Worldwide and Retaliatory Tariffs.”
They justified the reasoning using The Federalist: “Thus, this court reads ‘regulate . . . importation’ to provide more limited authority so as to avoid constitutional infirmities and maintain the ‘separate and distinct exercise of the different powers of government’ that is ‘essential to the preservation of liberty.’ The Federalist No. 51 (Alexander Hamilton or James Madison).”
The judges claimed Congress passed the IIEPA, which replaced the TWEA (you can read more about that here), to limit presidential power.
Relying on precedent, the judges said “regulate…importation” has a narrow meaning regarding “the power to impose any tariffs whatsoever.”
“Congress’s enactment of Section 122 of the Trade Act of 1974…grants the President authority to impose restricted tariffs in response to ‘fundamental international payment problems,’ including ‘large and serious balance-of-payments deficits,’ and unfair trading practices, thereby limiting any such authority in the broader emergency powers under IEEPA,” the judges wrote.
At first, I thought the panel agreed that the Worldwide and Retaliatory Tariffs matched Section 122 since Trump imposed them “in response to balance-of-payments deficits.”
But the House International Relations Committee once narrowed Section 122’s interpretation even more:
The legislative history surrounding IEEPA confirms that Congress cabined any presidential authority to impose tariffs in response to balance-of-payments deficits to a narrower, non-emergency statute. To prevent IEEPA from becoming another “essentially . . . unlimited grant of authority,” the House International Relations Committee suggested that “whenever possible, authority for routine, non[-]emergency regulation of international economic transactions which has heretofore been conducted under [TWEA] should be transferred to other legislation,” and further stated that IEEPA “does not include authorities more appropriately lodged in other legislation . . . .” H.R. Rep. No. 95-459 at 7, 10–11. This reflects that in enacting Section 122, Congress narrowed the President’s emergency authority to impose tariffs in response to balance-of-payments deficits. The words “regulate . . . importation” within IEEPA do not, therefore, permit the President to impose tariffs in response to balance-of-payments deficits.
Therefore, these tariffs do not fall under the narrow Section 122 interpretation and falls out of Trump’s authority.
The judges agreed with the plaintiffs that these tariffs do not satisfy 50 U.S.C. § 1701, especially the part that the tariffs do not meet the “unusual and extraordinary” condition.
Trump’s administration argued with the “political question doctrine,” meaning it questioned the power of the federal courts to hear cases based on a political question. The principle states that “political questions” belong to the legislative and executive branches.
The panel disagreed, stating:
The court concludes, however, that the question of the scope of § 1701 is (1) a justiciable question of statutory construction that (2) resolves in favor of Plaintiffs’ contention that the Trafficking Tariff Orders do not “deal with an unusual and extraordinary threat.” 50 U.S.C. § 1701(b). Those Orders thus lie outside the bounds of Congress’s delegation of authority to the executive branch.
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