On April 2, the Trump administration citing the  International Emergency Economic Powers Act declared a national emergency on tariffs. At the time the administration announced reciprocal tariffs on imports from several nations. Reciprocal tariffs work this way; essentially, if Country A taxes Country B’s cars at 10%, Country B would impose a 10% tariff on Country A’s cars in return, creating a “tit-for-tat” system. 

Targeted nations included China, Canada, Mexico. Japan, European Union, Vietnam, India, South Korea and Taiwan, which had all imposed much higher tariffs on imported U.S. goods than we did on theirs. The goal was to level the playing field, asking other countries to “treat us like we treat them” by eliminating their higher tariffs and non-tariff barriers which are a combination of protectionist policies, such as tariffs, quotas and subsidies to protect domestic industries.

An equally important goal was to strengthen domestic manufacturing ending our dependence on foreign supply chains and our inability to produce critical goods for public and military needs. Another goal was to force the elimination of unfair practices by our trading partners, such as currency manipulation, high value-added taxes, and the theft of intellectual property, which collectively harmed American businesses and workers. 

Through much of the 20th century Democrats supported free trade although by the 1990s that consensus began to erode.

As the U.S. economy changed and manufacturing jobs were lost, some Democratic politicians and their labor union base began to shift toward more protectionist views. Recently, the use of significant tariffs by President Trump led many Democrats to take the stance that “a tariff is a tax” that increases prices for consumers and businesses, though some still supported the strategic use of tariffs to counter unfair trade practices by other nations, particularly China. That sounds like their recent stand on border policy where they criticized Trump and the Republicans but did nothing themselves.

The U.S. Constitution gives Congress the power to “lay and collect Taxes, Duties, Imports and tariffs and to regulate foreign commerce.” However, Congress has delegated significant tariff-setting authority to the President through legislation, allowing the President to unilaterally impose tariffs in certain situations. Therefore, both Congress and the President have a role, but the President’s power is derived from Congressional acts. It appears that the decision by the Supreme Court hinges on whether the “Trump” tariffs are ones that the President by law has the power to impose or taxes which he does not have the power to levy.

The legality of using the International Emergency Economic Powers Act to impose broad, global tariffs has been challenged in federal courts, as the act was intended to be used for targeted sanctions against hostile actors during an actual crisis, not as a general tariff authority. Lower courts have ruled that the President overstepped his executive authority, and the case is currently pending a decision from the U.S. Supreme Court, which will determine the extent of presidential power in this area. 

The case, “Resources, Inc. v. Trump and Trump v. V.O.S. Selections,” is a key test of the scope of executive power as the justices consider whether he can use emergency powers to levy tariffs without approval from Congress.  If the Supreme Court overturns President Trump’s tariffs, he has several options to attempt to re-impose them using different statutory authorities or propose new legislation. Possible options include the following. Because the case before the court “Resources, Inc. v. Trump and Trump v. V.O.S. Selections,” primarily challenges the use of the IEEPA for broad tariffs the administration could attempt to use other, more limited, authorities under different laws, such as:

— Section 122 of the Trade Act of 1974 allows the President to impose tariffs of up to 15% for a maximum of 150 days to address “large and serious United States balance-of-payments deficits,” without an advanced investigation. Section 301 allows tariffs to be levied against countries engaged in “unfair trade practices” after an investigation by the U.S. Trade Representative.

— Section 232 of the Trade Expansion Act of 1962 allows the President to restrict imports if the Commerce Secretary determines they “threaten to impair” national security, a measure already used for steel and aluminum tariffs.

— Section 338 of the Tariff Act of 1930 that authorizes tariffs up to 50% on imports from countries that have discriminated against U.S. businesses, a measure that has never been used but is reportedly under consideration as a plan B.

Should the Supreme Court overturn the tariffs some method would have to be found to return the billions of dollars collected to importers.

Experts are split on how the court will rule. Some believe the court might be inclined to be deferential to President Trump on the matter, while some from both parties feel the Supreme Court will rule against him.

The Supreme Court may surprise us in its decision on “Resources, Inc. v. Trump and Trump v. V.O.S. selections as happened when the court upheld the Affordable Care Act (ACA) by ruling that its individual mandate was a constitutional exercise of Congress’s taxing power. We should also remember that Lincoln’s suspension of habeas corpus during the Civil War, which was called unlawful, resulted in court cases and was condemned by Democrats resulted in the Habeas Corpus Suspension Act in 1863, which formally authorized the president to suspend the writ, but included some safeguards. So you never know.

Thomas Kirkpatrick Sr. is a Silver Creek resident. Send comments to editorial@observertoday.com