The Trump administration’s arbitrary moves to restructure the international trade environment to accommodate White House whims have suddenly run into reality, specifically established laws.
This confrontation is still in the early stages, but it does not bode well for President Donald Trump and his ardent protectionist associates.
On May 28, the U.S. Court of International Trade went back to basics in a decision featuring the reminder that, under the Constitution, Congress has the authority to regulate trade. This fundamental power is not overridden by the ability of the president to address trade challenges in an emergency.
“The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage,” a three-judge panel said in the decision to issue a permanent injunction on the blanket tariff orders issued by Trump since January. “That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it.”
The ruling came in response to two lawsuits. One was filed by the Liberty Justice Center, a nonpartisan organization, on behalf of five small U.S. companies that import goods from countries targeted by Trump’s tariffs. The other was filed by a dozen state governments within the U.S.
Oregon Attorney General Dan Rayfield, a Democrat, is coordinating the states’ efforts against the administration. He has declared the tariffs to be economically devastating, reckless and unlawful.
Small businesses seeking relief include an importer of wine and other alcoholic beverages based in New York and a maker of educational kits and musical instruments located in Virginia.
President Trump has been basing his unilateral tariff authority on the International Economic Emergency Powers Act (IEEPA), passed by Congress and signed into law by President Jimmy Carter near the end of December 1977.
The law authorizes the president to declare “an unusual and extraordinary threat to the national security, foreign policy, or economy of the United States,” with the proviso that such threats must originate, “in whole or substantial part outside the United States,” and requires the president to provide updates to Congress every six months.
An incentive for this legislation was a desire in Congress to clarify and restrict presidential actions justified under the 1917 Trading With the Enemy Act, a law which reflected the emergency leading to U.S. entry into World War I as a formal declared combatant. The immediate incentive for our nation to enter that war was the declaration by Germany of unrestricted submarine warfare.
The 1917 law had been used to justify a variety of presidential initiatives, not all related to foreign policy and international developments. Declared national emergencies then still technically in effect included the 1933 banking crisis related to the hoarding of cash and gold, the 1950 Korean War crisis, a 1970 emergency related to a strike by postal workers and a 1971 emergency related to the deteriorating fiscal condition of the federal government.
Key powers granted include the ability to block transactions and take control of the assets of the parties involved in the threats. This section was used by the Trump administration to justify the new tariffs.
IEEPA was passed during a time of congressional assertiveness. Another important factor, no doubt, was President Carter’s fixation on clear, orderly administration, which he carried to extremes.
The severe national crises, traumas and wars described above contrast with today’s long-term growth and prosperity, and blessed absence of direct involvement in war. The judicial veto of presidential overreach shows our system is working.
Arthur I. Cyr is the author of “After the Cold War.”
Contact acyr@carthage.edu
