US Supreme Court ruling puts Trump in spot

The United States Supreme Court has concurred with a federal court judgment that President Donald Trump has exceeded the authority to impose tariffs through executive order. Imposing taxes, raising revenue, which includes tariffs is vested exclusively with the Congress. The US Supreme Court is ideologically divided, informally and generally speaking, among six conservative judges and three liberals. Three of the conservative judges have been appointed by Trump during his first term as president.

The expectation has been that the majority of judges would support Trump’s decisions on ideological grounds. So, the court has not interfered on the issue of illegal immigrants, refusing to grant them due legal process before they are expelled. Trump had hoped that his tariff policy would find support in the court because he was defending the interests of the country. But the court did not oblige Trump.

Chief Justice John Roberts and five others, including three of the liberal judges, did not agree with the arguments presented on behalf of the president that he had the powers under the 1977 International Emergency Economic Powers Act (IEEPA) to impose and regulate tariffs. The three conservative judges who wrote the dissenting opinion offered a tame defence of the president’s powers to impose tariffs. Justice Brett Kavanaugh wrote, “The tariffs at issue here may or may not be wise policy. But as a matter of text, history, and precedent, they are clearly lawful.” Chief Justice Roberts was firm in his view of presidential powers in the matter of tariffs. He wrote, “The Framers did not vest any part of the taxing power in the Executive Branch.”

Roberts also noted that the administration did not argue that the President has inherent powers to impose tariffs. It is for this reason that IEEPA is made the sole basis for the President’s powers in the matter of tariffs. Roberts said in his opinion, “The Government thus concedes, as it must, that the President enjoys no inherent authority to impose tariffs during peacetime. And it does not defend the challenged tariffs as an exercise of the President’s war-making powers. The United States, after all, is not at war with every other nation of the world.”

This is the first major rebuff from the court to Trump. He did not want to get the Congress and the Senate to pass tariff bills because he was sure than even his ardent supporters among the Republicans would not go along with his whimsical rates. At one point of time, Trump had imposed more than 100 per cent tariffs on China which he later tapered. Trump has also been raising and lowering tariffs based only on his personal assessment and perception.

Interestingly, the petitions against the presidential powers to impose tariffs came from small American businesses because the raised duties meant that they were paying high amounts of duties on goods they had been importing. It is reckoned that Trump’s raised tariffs resulted in American importers paying US$133 billion. There is no clarity whether the Supreme Court judgment saying that the president cannot impose tariffs would mean the government should return the extra money the American importers have paid. It was assumed that high tariffs would mean that imports would be restricted. It seems that imports continued, and the importers were paying higher import duties.

According to Trump administration officials, Trump would look to other similar laws which enable a president to impose tariffs though not to the same degree as the IEEPA. But it is unlikely that Trump would seek the support of the Congress and Senate for his tariff policies, and would also coax the legislators to pass the relevant tariff laws that he wants. In practice, that is how the American system has worked. The President has to work with the legislative branch to implement his tariff policies.