Trump Asks US Supreme Court To Uphold His Global Tariffs
The financial stakes alone make the case one of the biggest ever to land at the Supreme Court. A defeat for Trump would cut the current average US effective tariff rate of 16.3% by at least half.
US President Donald Trump asked the US Supreme Court to uphold his global tariffs, seeking review in a case that could affect trillions of dollars in trade and give him broad new leverage over the world economy.
The appeal calls for putting the case on a highly expedited schedule with arguments in early November, according to filings reviewed by Bloomberg. It follows a federal appeals court decision that said Trump can’t impose wide-scale import taxes by invoking a 1977 law designed to address national emergencies.
The filings weren’t yet publicly available on the court’s online docket on Wednesday evening.
Financial Stakes
The financial stakes alone make the case one of the biggest ever to land at the Supreme Court. A defeat for Trump would cut the current average US effective tariff rate of 16.3% by at least half and could force the US to refund tens of billions of dollars, according to Bloomberg Economics analyst Chris Kennedy. It could also upend the preliminary trade deals Trump has struck with some countries.
The levies remain in effect because the appeals court put its ruling on hold to give Trump time to seek Supreme Court review.
The decision nonetheless “has jeopardized ongoing foreign negotiations and threatens framework deals,” US Solicitor General D. John Sauer told the court. “Left undisturbed, the decision below would, in the president’s view, unilaterally disarm the United States and allow other nations to hold America’s economy hostage to their retaliatory trade policies.”
The Justice Department told the justices the tariff opponents had agreed that the high court should hear the case on the fast-track schedule. Neal Katyal, the lead lawyer for the challengers, didn’t immediately respond to an email requesting comment. The White House also didn’t immediately respond to a message seeking comment.
Early November
An argument in early November would make it possible for the court to rule by the end of the year, though the court’s term extends until the middle of next year.
The Supreme Court is highly likely to take up the case, but the justices must still agree to do so. The administration asked the court to take that step by Sept. 10.
CNBC earlier reported that the administration had asked the Supreme Court to intervene.
The challenged taxes include Trump’s April 2 “Liberation Day” tariffs, which impose levies of 10-50% on most US imports depending on the country they come from. The April 2 tariffs represented the biggest increase in US import taxes since the 1930 Smoot-Hawley levies, with the country’s average applied tariff rate at its highest level in more than a century.
Trump has portrayed tariffs as critical to leveling the playing field for American businesses and workers amid chronic trade deficits. But administration officials have publicly downplayed the impact of the litigation by saying that most of his tariffs can be imposed by other means. Trump’s tariffs on steel, aluminum and automobiles were imposed under a different law, so are not directly affected by the appeal.
Canada, Mexico
The appeal also covers tariffs Trump imposed on Canada, Mexico and China in the name of addressing fentanyl trafficking. The case stems from separate lawsuits filed by Democratic-led states and a group of small businesses.
The appeal will test a conservative-controlled court that so far has largely accommodated Trump as he asserts powers never claimed by his predecessors. Assuming they take up the case, the justices will be grappling with a law that gives the president a panoply of tools to address national security, foreign policy and economic emergencies but doesn’t explicitly mention tariffs as one of those powers.
The 7-4 ruling from the Court of Appeals for the Federal Circuit on Friday upheld a decision by the US Court of International Trade. Both courts said the 1977 International Emergency Economic Powers Act doesn’t authorize such sweeping import taxes through a provision that says the president can “regulate” the “importation” of property to address an emergency.
“The statute bestows significant authority on the president to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax,” the appeals court said.
The Constitution
The Constitution gives the tariff power to Congress, and a central issue in the case is whether lawmakers delegated that authority to the president. The Supreme Court in other contexts has required Congress to be explicit when it hands off its authority over an issue of major economic or political significance.
Sauer, the administration’s top Supreme Court lawyer, told the justices that “the power to ‘regulate importation’ encompasses the power to impose tariffs or duties on imports.”
The challengers also contended in the lower courts that a trade deficit isn’t the kind of “unusual and extraordinary threat” that the statute requires before the president’s emergency powers kick in. A ruling for Trump on that issue potentially would leave few if any limits on the president’s ability to declare an emergency and then impose additional tariffs as a response.
