Did SCOTUS Just Reveal Its Line in the Sand?

The surprising oral arguments in the tariff cases showed the justices aren’t always prepared to go to bat for Trump.

Photo courtesy of ABC News

On Tuesday, I wrote to warn that, with oral argument set for Wednesday, the Supreme Court could plunge us into authoritarian rule by green-lighting Trump’s tariffs. After all, the tariffs were all predicated upon “national emergencies” that were not in fact emergencies. There is no fentanyl crisis with Canada; the decades-old trade deficit isn’t suddenly an emergency that needs sky-high tariffs; Brazil doesn’t actually pose a national security threat. If they just shrugged this off, it would deal a body blow to our democracy: Rule by emergency decree is a favorite play by authoritarians, and if Trump weren’t stopped, we could soon find ourselves tumbling into a dictatorship.

Despite that grim warning, I left open the possibility that SCOTUS might actually rule against Trump this time:

Before we completely panic, there remains a distinct possibility that the Court could decide not to touch the radioactive question of whether Trump’s invocation of emergency powers under IEEPA [International Emergency Economic Powers Act] was lawful.

That’s because there is a threshold question: Did Congress actually delegate the power to impose tariffs to the President in IEEPA, and if so, was that delegation constitutional?

If there was no lawful delegation of tariff authority by Congress, then the Supreme Court need not address the more troubling question, i.e., whether Trump alone can declare whatever he wants to be an emergency, even if it clearly is pretextual. They won’t reach that question because they will have found that the tariffs were improper out of the gate.

Perhaps the justices will see the dangerous rocky shores on the horizon, and at least five will answer, “Not today, no thank you,” and then steer the ship elsewhere.

After yesterday’s oral argument, I have some happy news. I am much more confident in the above positive outcome, and I am now raising my bet to six justices finding the tariffs illegal and void. If I’m correct, along with most other legal observers, this is a big “whew” moment for our nation.

And there’s a bonus here: Combined with other recent rulings, it appears we may also have cracked the code on how best to get the Court to protect the separation of powers, the rule of law and democracy.

But first, a quick explainer of what the justices grappled with, alongside a discussion of how the justices signaled their skepticism.

Trump can’t impose tariffs by invoking IEEPA

Let’s look at that “threshold” question I mentioned earlier.

Whether Trump had the power to invoke IEEPA in the first place is hotly debated. That’s because 1) tariffs are a tax on U.S. consumers, despite what Trump says; 2) the power to tax is assigned by the U.S. Constitution to Congress, not the White House; and 3) there is no specific authorization in IEEPA from Congress to the White House to levy tariffs.

Let’s break these three points down and review how the justices addressed them.

Tariffs are a tax on U.S. consumers

Plaintiffs’ counsel were out the gate with the idea that tariffs are a tax on Americans. In fact, those were the first words out of Supreme Court attorney Neal Katyal’s mouth: “May it please the Court: Tariffs are taxes.”

John Sauer, who was once Trump’s personal attorney and is now the Solicitor General, tried to argue for the government that the tariffs were “regulatory” rather than “revenue-raising”—and I’ll get to why he went this route later.

But Justice Sotomayor wasn’t having it. “You say tariffs are not taxes, but that’s exactly what they are,” she said to Sauer at one point.

A frustrated Chief Justice John Roberts was skeptical. As Sauer fell back repeatedly on the broad power of the President over foreign affairs, Roberts brought the question back to what was really going on here.

“Yes, of course, tariffs deal with foreign powers, but the vehicle is imposition of taxes on Americans,” Roberts reminded Sauer, “and that has always been the core power of Congress.” Roberts noted that this seemed “to kind of at least neutralize” any claimed executive power.

When Sauer insisted that “foreign producers” shoulder the tariffs, the Chief Justice cut to the chase. “Well, who pays the tax?” Roberts asked. “If a tariff is imposed on automobiles, who pays them?” Sauer ultimately admitted that U.S. consumers pay between 30 and 80 percent of the tariffs’ costs.

The power to tax belongs to Congress

The question of whether the White House could simply usurp Congress’s role in imposing taxes was on the mind of Justice Neil Gorsuch, whose skepticism during oral arguments proved a key surprise to many observers.

“You say we shouldn’t be concerned because this is foreign affairs and the president has inherent authority,” Gorsuch said. “If that’s true, what would prohibit Congress from just abdicating all responsibility to regulate foreign commerce—for that matter, declare war—to the president?” Could Congress decide that “we’re tired of this legislating business” and “hand it all off to the president?”

After Sauer acknowledged that Congress could not simply perform “abdication” of its duties (which, by the way, it has in many respects), Justice Gorsuch responded wryly, “I’m delighted to hear that.”

Gorsuch then flipped the question with a liberal bogeyman hypothetical. “Could the president impose a 50 percent tariff on gas-powered cars and auto parts to deal with the unusual and extraordinary threat from abroad of climate change?” Gorsuch asked. Sauer admitted that he probably could, even while getting in a cringeworthy dig about the “hoax” of climate change. “I think that has to be the logic of your view,” Gorsuch warned, indicating that he did not like the prospect of a climate change emergency tariff at all.

Gorsuch then raised a question that cut straight to the heart of our current constitutional crisis. If, as the White House argues, Congress has ceded to the executive branch absolute power over tariffs, then “what president is ever going to give that power back” by signing a bill that reins it in? He noted, “As a practical matter, in the real world,” Congress “can never get that power back.”

Gorsuch called this a “one-way ratchet” that would give the White House ever more authority, because after supposedly ceding such power, Congress would need a supermajority sufficient to override a presidential veto to ever claw it back.

IEEPA doesn’t actually say “tariff” anywhere in it

On this question of whether IEEPA actually authorized tariffs, Justice Amy Coney Barrett, who considers herself a strict textualist, led the charge with an assist from Justice Sonia Sotomayor. The government had been trying to hang its hat on the words “regulate importation” in IEEPA, claiming this grants wide authority to impose the tariffs.

Barrett wasn’t buying what Sauer was selling. “Can you point to any other place in the code, any other time in history, where that phrase together—‘regulate importation’—has been used to confer tariff-imposing authority?”

Sauer mentioned a predecessor to IEEPA that President Richard Nixon used to impose a 10 percent tariff in 1971. But Barrett noted that that statute was replaced by IEEPA in direct response to Nixon’s actions. So, Barrett wondered, is there any other example? Sauer hemmed and hawed, prompting Sotomayor to interrupt.

“Could you just answer the Justice’s question?” she demanded. He had no answer for Barrett.

Sotomayor had another devastating text-based question to ask. Sauer kept citing the power to “regulate … importation,” but as Sotomayor noted, the text actually says “regulate … importation or exportation.” Why would that language suggest the power to “tariff” if “exportation” would not ever involve any tariffs? Again, there’s no ready answer for this.

Justices Alito and Kavanaugh tried to save Sauer by arguing that if the president has the power to embargo a nation under IEEPA, then he surely has the power to impose tariffs, which are a lesser sanction.

But that’s just it. Tariffs are still taxes, and if Congress wanted to cede to the White House its core power, it would have said so. Instead it authorized a bunch of other powers, none of which allows the executive to levy taxes on the public under the Act.

Major questions moment

As I wrote on Tuesday, the Chief Justice keeps trying to make the “major questions” doctrine happen:

Understand first that the Roberts Court has invented something out of whole cloth called the “Major Questions Doctrine.” I say “invented” because there’s actually nothing in the Constitution nor any of our laws that supports it. Still, under Chief Justice Roberts, the Major Questions Doctrine says that whenever the White House undertakes actions with “vast economic or political significance,” that program must have specific authorization from Congress.

This is a case where the Chief Justice may get his liberal colleagues, who don’t like the Major Questions Doctrine one bit, to sign on to an opinion (that he assigns to himself to write) because, well, they have to if they want a positive result.

I could see a concurrence by the liberals here, however, noting that the outcome is correct, but the Major Questions Doctrine question need not even be reached. After all, if the text of IEEPA doesn’t say “tariff,” and the legislative history doesn’t support the idea of a presidential tariff power within the Act, then that’s the end of the case. Congress never even tried to delegate that power to the White House, so we’re done.

The curious new line in the judicial sand

This is one of the first cases squarely before the Supreme Court on appeal where the question presented is whether Trump exceeded his legal authority. Nearly every other case that has come out “favorable” to Trump has been a punt by SCOTUS: lifting stays, temporary restraining orders and preliminary injunctions to allow Trump’s policies to proceed while the case is resolved, in effect giving him a win while reserving the merits of the legal question until later.

The Court didn’t have that ability here because the case had wound its way up through the normal appellate process and couldn’t simply be dealt with on the “emergency docket.” There was going to be a full oral argument, which occurred yesterday, and there will be a full ruling laying out the Court’s decision-making process.

That the question presented involved financial policies by Trump that are likely ruinous and unpopular among corporate interests is notable. This Court has recently appeared more willing to step in and stop actions when they involve high economic stakes. For example, the Court has allowed Trump to fire just about everyone he wants from his administration except Federal Reserve Governor Lisa Cook. When it came to that key position, the Court let her keep her job while the case was pending.

It stands to reason that if there is to be a hard line drawn by the SCOTUS radical majority, it is over money and the economy. Philosophically speaking, they simply don’t like having an ass braying by the trading pit and causing general chaos in the markets. Given this, it might behoove opponents to fast-track challenges to Trump’s economic edicts in the hopes of getting good case law that reins him in in other important ways.

If, after all, the ceding of the power to tax by Congress becomes an unacceptable “one-way ratchet” benefiting the executive, as Justice Gorsuch warned, the same would be true over other core powers of Congress, including the power to appropriate funds and wage war. Even getting these justices thinking about the extraordinary power grab by the Trump White House over tariffs could carry over to other important challenges to his excessive claims of authority.

Finally, a decision by the Supreme Court striking down one of his signature policies would send a clear message about the rule of law and separation of powers even at this late stage. Trump may think and act like there are no checks on his power. But some important checks still remain, even if the justices take a painfully long time to assert them.