A power that President Trump fondly embraces and uses in sweeping and unprecedented ways – setting import charges on goods coming into the U.S. from nearly the whole world – does not exist, a federal appeals court ruled Friday in a historic defeat for his policy.
Only Congress has that power under the Constitution, the decision said, and it has not granted the nation’s Chief Executive permission to use it.
However, the eagerly-awaited ruling by a 7-to-4 vote of the U.S. Court of Appeals for the Federal Circuit (a specialized tribunal) will not take effect at least for 46 days and will not take effect even then if the Trump Administration takes the case on to the Supreme Court. If, as seems predictable, the Supreme Court agrees to rule, no tariff will be blocked until the Justices decide. That could take until sometime next year.
President Trump, in an online message, denounced the appeals court decision as “highly partisan,” noted that “ALL TARIFFS ARE STILL IN EFFECT!” and said he would seek “the help of the United States Supreme Court.” His Administration has imposed a number of other charges beyond those at issue in the ruling, and is planning even more. The overall policy has set off trade wars with neighboring nations, allies and adversaries.
Although Trump has issued scores of “emergency orders” setting import tariffs (and sometimes backs off of them), Friday’s decision applied to only five of his specific orders, mainly dealing with charges on goods coming from Canada, Mexico and China. One of the voided orders, though, put charges on goods from nearly every nation. The tariffs are so high and reach so many kinds of goods that they are expected to add between $2.3 trillion and $3.3 million to money coming into the U.S. Treasury.
The President has repeatedly claimed that foreign countries that send goods to the U.S. will pay the tariffs, and he says the charges are designed to retaliate for unfair trade policies of other nations, but foreign nations do not pay them. They are paid by the businesses importing the goods as they arrive on U.S. shores. The federal Customs Bureau collects them. Most importers pass them on to consumers instead of absorbing them.
The impact on the U.S. economy has been severe, with prices rising on many items – a prime example is the price of coffee from Brazil and Colombia; the U.S. imports 99 percent of the coffee that Americans drink. Trump, though, insists – as he did again Friday – that the charges “are the best tool to help our workers, and support companies.”
The decision was supported in full by seven of the appeals court judges, but four of those seven would have gone further and ruled that the President has no power under present law to impose any tariffs at any time on any goods from anywhere. If existing law meant what Trump has claimed, those four said, that would be an unconstitutional sharing of legislative powers.
The four dissenting judges would have upheld all of the tariffs, and would have concluded that Trump was exercising emergency powers under a 1977 law that governs import policy. The dissenters argued that Trump’s tariffs were legal as a “bargaining chip” to try to persuade other nations to change policies — such as dealing with drug trafficking.
The majority opinion, however, concluded that the word “tariffs” appears nowhere in the 1977 law. In a 45-page opinion, the majority broadly canvassed import control policies since the Constitution was written in 1787. It said that a tariff is a form of tax imposed by the government and noted that only Congress has the constitutional power to tax the people.
In terms of constitutional theory, the majority relied upon what is called the “major questions doctrine.” That is a doctrine that the Supreme Court has fashioned and used in recent years in putting limits on the authority of federal regulation agencies. If an agency takes action that has a wide economic and political impact, it will be struck down unless Congress has explicitly given permission.
The ruling upheld a decision last May by another specialized court, the U.S. Court of International Trade, which has the authority to decide disputes over U.S. foreign trade. The only part of the lower court ruling that Friday’s decision rejected was a sweeping order barring the Executive Branch from imposing any such tariffs on any goods. The majority said that might have gone too far, under a recent Supreme Court decision limiting lower federal courts’ powers to issue orders that reach nationwide.
Technically, the appeals court that acted Friday said it was sending the case back to the lower court to reconsider the sweep of that order. However, its separate order imposing a delay until at least October 14 explicitly told the lower court that it is to do nothing in the meantime as the case moves on to the Supreme Court.
