The Goldwater Institute joined forces with our friends at the North Carolina-based John Locke Foundation and the Dallas Market Center today to urge the U.S. Supreme Court to strike down the so-called “Liberation Day” tariffs. Coming only days after the Wall Street Journal reported that the White House is “quietly watering down” some of these tariffs due to the way they’ve increased costs for American consumers and alienated international allies, our brief argues that the tariffs exceed the President’s authority and threaten fundamental constitutional values.
Administration lawyers claim that a federal statute called IEEPA allows the President to impose tariffs by simply signing a piece of paper, without any involvement from Congress. But that’s not true. For one thing, the Constitution clearly says that only “Congress shall have power to lay and collect taxes, duties, imposts and excises”—not the President. And IEEPA doesn’t say otherwise. Far from allowing the President to impose tariffs, that law says the President can “investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any … importation or exportation.” Only by stretching the word “regulate” to an unreasonable extreme can anyone view this as allowing the President to impose taxes on Americans in whatever amount he chooses, for however long he likes.
But there’s a deeper reason why the tariffs are not legally authorized. IEEPA only applies in cases of emergency—and as we argue in our brief, there’s no emergency here. The word “emergency” means an incident that makes the ordinary process of lawmaking impossible. But the United States has run a “trade deficit” since 1976, and Congress has passed many laws to deal with that. This alone proves there’s no emergency. Although the government’s lawyers argue that the President alone decides whether there’s an emergency—and that courts have no say in the matter—we point out in our brief that courts rule on the existence or non-existence of emergencies all the time. It’s quite common for state courts to do so, given that many state constitutions have provisions that apply only if there is or isn’t an emergency—and bureaucrats often try to take advantage by declaring things to be “emergencies” when they aren’t.
What’s more, as an ordinary matter of economics, trade imbalances aren’t emergencies at all. They simply reflect the high standard of living in the United States—where people are wealthy enough that they can pay foreigners to make products for them instead of having to make them themselves. That’s a good thing. An old joke among economists captures this basic truth: “I have a huge trade deficit with my grocery store—I’ve bought lots of eggs and milk from them over the years, and they’ve never bought anything from me!” As our brief explains, the whole notion of “trade deficit” rests on a misunderstanding of basic economics.
The problem with the “Liberation Day” tariffs is far deeper than economic, however. Our founding fathers were well aware of how dangerous it would be to let a single person impose taxes on the country without meaningful checks and balances. The history of England in the century before the American Revolution was one of violent civil war, thanks largely to the attempts by kings to impose taxes without Parliament’s involvement. Indeed, even the American colonies suffered, when King Charles II established a dictatorship over the New England colonies and empowered a single man, named Edmond Andros, to levy taxes on Americans without the involvement of their legislatures. That outraged the colonists so much that they overthrew Andros and proclaimed “no taxation without representation”—almost a hundred years before we declared independence. And incidents like that were still on the minds of our founding fathers when they wrote the Constitution—and gave Congress, not the President, the power to tax.
You can read our brief here and learn more about the case here.
