President Donald Trump’s second term in office has been dominated by his capricious and seemingly random deployment of tariffs as a bludgeon to intimidate and coerce America’s allies and enemies alike. In Reason, J.D. Tuccille considers the possibility of the courts taking away the one tool Trump has been using to get his own way in trade negotiations:
Everybody with a brain knows that tariffs are taxes. And they know that tariffs imposed on goods imported to the United States are largely paid by American businesses and consumers. The big question is whether tariffs unilaterally imposed by President Donald Trump under creative interpretations of emergency executive powers will withstand a federal court challenge. So far, the signs are promising for those hoping that a law intended to rein in the power of the presidency will not be read to permit the president to set trade policy of his own accord.
As CBS News reported this week, the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. heard “oral arguments on Thursday in V.O.S. Selections v. Trump, a case brought by five small business owners and 12 states who allege they have been harmed by President Trump’s import taxes. V.O.S., the lead plaintiff in the case, is a New-York based wine importer.”
Representing the plaintiffs is the free-market Liberty Justice Center, along with co-counsel Ilya Somin, a law professor at George Mason University’s Scalia Law School. The plaintiffs are challenging the Trump administration’s invocation of the International Emergency Economic Powers Act (IEEPA) as the basis for the “Liberation Day” tariffs on much of the world as well as related tariffs on Mexico, Canada, and China.
A Law Intended To Trim Presidential Power, Not Expand It
The plaintiffs maintain that “under that law, the President may invoke emergency economic powers only after declaring a national emergency in response to an ‘unusual and extraordinary threat’ to national security, foreign policy, or the U.S. economy originating outside of the United States. The lawsuit argues that the Administration’s justification — a trade deficit in goods — is neither an emergency nor an unusual or extraordinary threat.”
What’s interesting is that Congress passed IEEPA not to expand presidential power, but to restrict it. According to a 2024 Congressional Research Service report, “following committee investigations that discovered that the United States had been in a state of emergency for more than 40 years, Congress passed the National Emergencies Act (NEA) in 1976 and IEEPA in 1977. The pair of statutes placed new limits on presidential emergency powers”. Under these laws, presidents are required to assess emergencies on an annual basis, extend them if necessary, and report on their status to Congress.
“Some experts argue that the renewal process has become pro forma“, the report acknowledges. “History shows that national emergencies invoking IEEPA often last nearly a decade, although some have lasted significantly longer — the first state of emergency declared under the NEA and IEEPA, which was declared in response to the taking of U.S. embassy staff as hostages by Iran in 1979, is in its fifth decade.”
