Trump Tariff Power At Risk After Skepticism By Appeals Court

President Donald Trump's authority to issue sweeping global tariffs under an emergency law was met with skepticism at a federal appeals court hearing Thursday, a day before higher rates against dozens of countries are set to kick in.

A panel of 11 judges took turns questioning a top US Justice Department official about Trump's argument that the nation's persistent trade deficit qualified as a national emergency under the law, allowing the president to bypass Congress and hit countries across the globe with tariffs.

Trump's tariffs address the “consequences of our exploding trade deficit” and allowed him “to put pressure” on other countries, Brett Shumate, who leads the Justice Department's civil division, said at the hearing. He added later that Trump found deficits had spiked, reaching “a tipping point.” 

A majority of the panel sharply probed the government's position. Tariffs seemed “to have no friends” in the text of the emergency law, Judge Alan David Lourie, an appointee of George W. Bush, said at the hearing.

A group of Democratic-led states and small businesses are challenging the tariffs, arguing that Trump wrongfully invoked the International Emergency Economic Powers Act to issue the levies, and that Congress never intended for the law to be used in such a manner when it was passed nearly 50 years ago.

Thursday's hearing lasted nearly two hours and ended without a ruling, which is possible within weeks. The cases are likely to wind up at the Supreme Court, drawing the justices into yet another fight this year over Trump's agenda.

The US trade court in May sided with the challengers and ruled Trump's tariffs illegal. But the US Court of Appeals for the Federal Circuit quickly paused that order and allowed the tariffs to stay in place temporarily until they could resolve the case. Trillions of dollars of global trade are embroiled in the legal fight. 

Judge Jimmie Reyna, an Obama appointee, questioned why Congress had passed so many laws that explicitly delegate some tariff authority to the president in specific circumstances if IEEPA could be used so broadly.

“Why would the president ever rely on all these trade statues if he has under IEEPA this unbounded power?” Reyna said.

Neal Katyal, a lawyer for the small businesses, argued that even if the appeals court agreed with the administration that IEEPA's language about regulating imports allowed Trump to declare at least some tariffs, there is an overarching legal principle that if Congress wants to give the president significant power, it has to clearly authorize it.

The challengers cited two of the Biden administration's biggest losses before the Supreme Court — in fights over pandemic-era evictions restrictions and canceling federal student loan debt — to support their position that Trump now couldn't try to read more power into the economic emergency law than it offered on its face.