The Supreme Court’s 6-3 decision Friday invalidating President Donald Trump’s sweeping and so-called “reciprocal tariffs” is, on one level, a classic separation-of-powers ruling. The Constitution gives Congress, not the president, the power to impose taxes and regulate commerce. Congress can certainly give some of this power away, but it needs to be clear when it does. The court held that when Congress enacted the International Emergency Economic Powers Act, the statute that Trump relied on to impose these tariffs, lawmakers did not, in fact, empower any president to impose tariffs.
The ink on the Supreme Court’s ruling was barely dry when Trump announced that he plans to impose a 10% global tariff on all of the United States’ trading partners.
But as much as the ruling angered Trump — he called the justices who ruled against him “a disgrace to our nation,” “fools” and “lap dogs” — the decision is perhaps merely Act II in the long play called “Trump’s tariff project.” After all, the ink on the Supreme Court’s ruling was barely dry when Trump announced that he plans to impose a 10% global tariff on all of the United States’ trading partners under Section 122 of the Trade Act of 1974. Saturday, he announced that global tariff would be an even higher 15%.
The court’s conclusion is legally and economically significant, but perhaps structurally narrow. The court did not say Trump or any other president can never impose tariffs. It said a president cannot impose tariffs via the International Emergency Economic Powers Act. And despite his finding that Trump could use the IEEP, Justice Brett Kavanaugh’s dissent reads like a roadmap for how a president can achieve much of what Trump wants.
Referring to Kavanaugh during a news conference Friday, Trump said, “I’m so proud of him.”
Trump wanted to impose sweeping tariffs on nearly every country, without time limits. He may not be able to do that under existing federal statutes, but that doesn’t mean he is completely hamstrung.
Under Section 122 of the Trade Act mentioned above, a president can impose tariffs where there is a balance-of-payments deficit, but, without congressional approval, those tariffs expire after 150 days, and the top tariff rate is 15%.
Trump could also look to two statutes he leaned on during his first term – Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974. Section 232 allows the president to impose tariffs, but only on specific goods, and only after an investigation by the Commerce Department to determine if such imports threaten national security. That’s the authority Trump used to impose aluminum and steel tariffs. Section 301 similarly allows the president to impose tariffs where “any trade agreement[s] are being denied, or an act, policy, or practice of a foreign government is burdening or restricting U.S. commerce.” An investigation by the U.S. Trade Representative must precede the imposition of tariffs under this statute, and they are subject to periodic review, typically every four years.
The Supreme Court eliminated the president’s fastest tariff switch, but not the entire electrical system.
Each of these statutes appears to more clearly allow the president to impose tariffs. But there are generally more requirements to impose those tariffs and they are more narrow in scope. Put another way, the Supreme Court eliminated the president’s fastest tariff switch, but not the entire electrical system.
Justice Kavanaugh’s dissent does not merely evidence his disagreement with the majority, it sketches a governing theory of executive trade power. Kavanaugh specifically name-checked the statutes discussed above and others. He concluded that other statutes “might justify most (if not all) of the tariffs at issue in this case.” It was likely Kavanaugh’s decision to instruct a president on how to impose tariffs in a way that will stay within the law that caused Trump to express such pride in him later Friday.
If the administration follows Kavanaugh’s roadmap, then some form of tariffs will likely return, albeit in a fragmented form. Instead of one sweeping “reciprocal tariff,” the government would issue multiple findings, based on its finding that there are national security concerns, unlawful trade practices, and balance-of-payments deficits.
For a president who is as determined to impose tariffs as Trump is, the Supreme Court’s decision is less a shutdown than a rerouting. The ruling wasn’t so much about shrinking executive authority as it was reasserting Congress’ authority and reaffirming the separation of powers. The court didn’t eliminate Trump’s ability to achieve his policy goals; they’re just forcing him to pursue them through congressionally approved channels.
And you can bet Trump will pursue them.
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