What the Supreme Court’s Tariff Decision Means for Presidential Power

Transcript

The following transcript of this discussion was edited for clarity.

The U.S. Supreme Court finally issued a decision in Learning Resources, Inc. vs. Trump, a case specifically about tariffs but also about the scope of presidential power. It brings some clarity for business, but it also leaves many open questions — not only about tariffs, but what exactly constrains the president. That’s the focus today.

I’m Bob Mertz, and I’m here with Goodwin partner Will Evans, one of the authors of a recent article on this topic in our Forces of Law series.

Bob Mertz: Will, I’m looking forward to this conversation. Thank you for being here.

Will Evans: Thanks Bob. It’s great to have an opportunity to talk to you about it.

So what’s at stake in this tariff case, Will?

There’s quite a lot at stake. Starting with the particulars, it’s about a specific statute, the International Emergency Economic Powers Act (IEEPA), which provides that the president can “regulate […] importation” after declaring an emergency.¹

The question is whether that statutory language — the “regulate […] importation” language — allows the president to, as the Court put it, “impose tariffs on imports from any country, of any product, at any rate, for any amount of time.”² That’s the particular question presented in the case. And a majority of the Court, six Justices, agreed on the bottom-line answer of no.

That grant of authority to regulate importation in response to a declared emergency does not permit the kind of sweeping tariff power that the president claimed. That bit of statutory language wasn’t clear enough to show that Congress wanted to delegate broad tariffing authority to the president in this context.

So that’s a very important specific holding, given the kind of powers that the president is asserting through IEEPA. But it’s also important in a more general sense, because the decision sends a signal about how much scrutiny the Court’s going to apply going forward when the president takes similar actions, claiming broad authority based on ambiguous and sort of cryptic language in a statute that Congress has enacted.

So the Court said the president can’t impose tariffs on his own. He needs clear authorization from Congress. Beyond tariffs, why does that matter?

Well, it matters because the Court’s opinion suggests it’s going to apply a kind of skepticism when the executive branch is looking to assert massive transformative power over the domestic economy without clear statutory authorization from Congress. And that principle has a name in Supreme Court doctrine: the major questions doctrine.

The decision signals that the Court is very much committed to that doctrine going forward — although it also shows that the Justices are not at all on the same page about how it should be applied.

Right. Three Justices dissented [Alito, Kavanaugh, Thomas]. And the six who agreed were split on their reasoning. Three said the decision hinged on the major questions doctrine [Barrett, Gorsuch, Roberts], and the other three said it didn’t [Jackson, Kagan, Sotomayor].

It’s very significant because again, as a bottom line, it signals that the major questions doctrine is certainly here to stay in some form or another. But the questions are: In what form and how is it going to apply in the future?

The three Justices who were appointed by Democratic presidents — Justices Sotomayor, Kagan, and Jackson — agreed that IEEPA doesn’t authorize the tariffs, but they did not agree on applying the major questions doctrine to get that answer. They thought using the ordinary tools that judges use to parse statutory language was sufficient. And that’s partly because, in the past, they have strongly disagreed with the Court’s application of the doctrine. The Biden administration, for example, argued that it had statutory authorization to waive a large amount of student debt, and the Court, applying the major questions doctrine, said no. That provoked a very strong dissent written by Justice Kagan. She in turn wrote this Learning Resources concurrence from the three Democratic appointees, and they clearly don’t want to sign on to the major questions doctrine going forward.

Interestingly, the three Justices in the dissent didn’t think the major questions doctrine led to the case’s majority result. They thought IEEPA authorized the tariffs. But they’re clearly committed to the validity of the major questions doctrine going forward. They just think it didn’t apply in this case because the case had a foreign policy dimension to it. And they thought that, even if it did apply, the statutory language could still be read as authorizing the tariffs.

So it’s very messy. The Court is sort of all over the place about how this doctrine applies, what it means, and how it’s going to be used going forward.

But your sense is despite all these differences of opinion about the doctrine, it’s going to be an important factor in future decisions.

Absolutely. It’s clear that six Justices on the Court — a clear majority and all the Republican appointees — believe that this doctrine applies to some degree. There are disagreements within that six-Justice group over what subject matter it might apply to. Again, the three dissenters in this case said that when there’s a big foreign policy dimension to the executive action, the major questions doctrine shouldn’t apply. But they’re clearly committed to applying it in other, more purely domestic applications of executive authority. So it’s certainly going to be very important to future cases. There’s just a lot of uncertainty about the exact contours of how it will apply.

Is your feeling that a decision rendered in this way creates more predictability for business?

There’s predictability in the sense that this doctrine is here to stay. And businesses can believe that when there’s a colorable argument to make under this doctrine, they can try to resist, in court, initiatives from the executive branch based on statutory language. They can argue that the statutory language is ambiguous — there isn’t a clear statement that Congress meant to give the president this kind of sweeping authority to transform the economy.

But there’s a lot of short-term or tactical unpredictability because, as we’ve discussed, exactly how the doctrine is going to cash out in a given case is unclear.

It’s also very clear that the administration is committed to executing on the president’s agenda, despite small and even large losses in court. It is going to find other avenues to affect policies, whether it comes to the president’s desire to impose tariffs or other elements of his economic agenda. So there’s a lot of uncertainty about what’s coming next.

On the tariff front, within hours of the decision, the Trump administration pivoted to plan B, which was to impose new tariffs under different statutes. In light of that development, does the Court decision really matter if the president can pivot that quickly?

It does matter for at least two reasons. First, there’s a rule of law dimension — this basic idea that if the president is going to take major action, he must point to legal authority to do it. Maybe there are other authorities for imposing tariffs, but IEEPA was not a legitimate source of statutory authorization for the particular tariffs that were challenged in court. That just matters, in a very basic sense, to the idea that we’re a country of laws.

Second, it matters because the administration has announced a backup plan regarding tariffs. And there are experts who can go into a lot of detail about this, but the bottom line is that the backup plan isn’t a complete replacement. The IEEPA tariffs were very sweeping. They involved tariffs on any product from any country at any rate that could be imposed at any time.

These new tariffs are pursuant to statutory authorizations that are narrower. It’s quite fair to say that some of the statutes require significant investigation, such as notice and comment procedures, before the tariffs can kick in.

Others have limits in terms of the rate that can be imposed and how long the tariffs can last. One particular set of tariffs that’s being discussed right now can only last for a period of 150 days, after which Congress needs to authorize them if they are to stay in effect. So that’s meaningfully distinct from the kind of unlimited tariffing authority that the president was claiming under IEEPA.

In that sense, there’s more structure around what the president can do and some certainty and predictability in what’s coming on the tariff front in the future.

That’s right. There’s a certain amount of procedure that’s guaranteed under these other statutory authorities. There are also very basic limitations that didn’t exist with respect to the IEEPA tariffs at issue in this particular case.

Does the decision constrain other uses of emergency powers like sanctions, asset freezes, or other economic tools that presidents use?

It depends. If we’re talking about particular powers that are listed in IEEPA, it probably doesn’t constrain the exercise of specific authority granted under that statute. As the president said, and as the decisions say, there are some more radical actions that the president could clearly take under IEEPA that he chose not to take. There is language authorizing embargoes, for example, rather than tariffs. This decision doesn’t suggest that those actions are not possible if the president declares an emergency under IEEPA.

But, if we’re talking more generally about the use of emergency power in the economic field by the president, then yes, the decision does constrain that kind of invocation of authority, because the president and the administration know going forward that the major questions doctrine might apply to such exercises of power. They know that they will need to have at least a decent argument that there’s a clear authorization from Congress in whatever statute they’re pointing to.

There’s still so much to learn about how this is going to play out with tariffs and the major questions doctrine. We’ll certainly be keeping an eye on all of that. Thank you, Will, for being here today.

Oh, it’s my pleasure. Thank you so much for the opportunity to talk about this.