TARRIFSSupreme Court Case on IEEPA Tariffs: Facts Should Matter
The Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs, but the facts contradict the administration “emergency” argument. The goods trade deficit and most of its alleged negative effects are rooted in domestic policy, not trade. The Supreme Court is now considering the case, and rules of evidence may limit the Court to arguments formally presented, but the justices would do the nation an injustice if they did not consider the facts.
Fine points of the law are likely to dominate legal arguments in the case before the Supreme Court challenging the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs. Facts, however, matter and should play an important, even dominant, role.
Unfortunately, facts were missing in the dissenting opinion in the U.S. Court of Appeals (case 25-1820, Taranto Circuit Judge dissenting). The justices uncritically accepted the administration’s litany of alleged negative effects caused by trade deficits recounted in President Donald Trump’s April 2 executive order (so-called Liberation Day) and the accompanying Federal Register Notice on April 7.
Evidence presented to the Supreme Court should demonstrate that the administration’s alleged facts do not support the preconditions for invoking IEEPA. An amicus brief submitted by economists expertly challenged part of the dissenting opinion. But since the dissenting opinion noted that the majority also did not disagree that there is a basis for invoking IEEPA, certain economic realities are worth repeating and elaborating.
The dissenting judges opined that the four requirements for the president to exercise IEEPA authorities had been met: that (1) there must be an unusual and extraordinary threat to national security, foreign policy, or economy of the United States; (2) the threat must wholly or substantially have a source outside the United States; (3) the president must declare a national emergency with respect to that threat; and (4) the authorities must be exercised to deal with that threat and not for any other purpose.
More needs to be said on the second and fourth points: whether the threat has a source outside the United States, and whether authorities exercised deal only with that threat.
Trade Deficits Are Not Foreign in Origin
The dissenting opinion regards trade deficits as unusual and extraordinary because they have grown by over 40 percent in the last five years. Ensuing harmful effects include “domestic manufacturing deficiencies caused by underlying conditions like lack of reciprocity, disparate tariff rates and non-tariff barriers and US trading partners’ economic policies.”
