Well, in part because former President Donald Trump perfectly exploited that power vacuum. As a corollary, he disproportionately increased the average U.S. tariff to over 18%, a level not touched since 1934. His irresponsible tariff program was implemented when he did so without the approval of Congress. Now a soon-to-be-heard court case is challenging whether all of this is illegal under the International Emergency Economic Powers Act (IEEPA).
Trump’s fanciful use of the IEEPA to impose radical tariffs has alarmed legal experts and state attorneys general alike. On April 2, he finally invoked the act and declared the day “Liberation Day.” This announcement established a default cut-rate baseline tariff that applies to the entire globe. Critics accuse him of misusing this emergency power with no just cause. Second, they argue that the IEEPA requires any tariff to tailor precisely to the issues it seeks to remedy.
The former president is nothing if not an active champion of tariffs. He believes they are an enormously important tool for controlling the macroeconomy. He imposed tariffs on Canada, China, and Mexico as part of his broader strategy to tackle drug trafficking and immigration issues. The decision, which was delivered from a three-judge panel of the U.S. Court of International Trade, found that Trump’s tariffs did not come close to meeting the IEEPA’s standard for remedying these exigencies.
Under his watch, the administration continued to draw attention to America’s increasing trade deficit and declared it an emergency. He even claimed that placing these tariffs was necessary to protect the U.S. economy. Critics argue that what he has done is an unacceptable expansion of executive power.
“The president doesn’t get to use open-ended grants of authority to do what he wants.” – Reilly Stephens
The latest round in the legal battle over Trump’s tariffs is heating up. As the U.S. Court of Appeals for the Federal Circuit prepares to hear arguments from the Trump administration and other states and businesses seeking to overturn these tariffs, states are still scrambling to adjust. The court’s ruling may prove to be vital precedent for trade policy future during the next presidential administration.
Though the Trump Administration has suspended some of these retaliatory tariffs for now, they are still looming as the Sword of Damocles. Countries that fail to negotiate strong, enforceable trade agreements will find themselves vulnerable to these tariffs once more. They will need to get formal letters from Trump setting their tariff rates.
In addition to facing lawsuit challenges, Trump has been actively pressuring international partners, including the European Union and Japan, to accept higher taxes on their exports to the United States. His administration argues that this approach is consistent with historical practice. Notably, they reference a 1971 economic crisis in which President Richard Nixon invoked emergency powers to place tariffs.
In rebuttal to these arguments, legal experts stress the constitutional limitations on presidential power when it comes to taxation. The U.S. Constitution explicitly gives Congress the authority to create taxes, tariffs included. Somehow, Trump has succeeded in evading that obligation.
To this day, Trump is mired in at least seven separate lawsuits that claim he has abused his authority. The outcomes of these lawsuits may very well redefine the contours of executive authority in trade. The long-term implications go far beyond tariffs. More broadly, they challenge the balance of power between the presidency and Congress in the governance of our nation’s economy.
