Lawfare Daily: The Tariffs Decision and What Comes Next

On Friday, March 6th, Laugh Fair and Georgetown Law are bringing together leading scholars,

“practitioners, and former government officials for installing updates to ECPA, a half-day”

event on what's broken with the statute and how to fix it. The event is free and open to the public in person and online. Visit Laugh Fair Media.org/EkpaEvent. That's LaughFairMedia.org/ECPAEvent for details and to register. If the word "regulate" imports, and I eat a mean something, it doesn't mean this kind of daily shifting, non-regulatory, arbitrary sort of action, and I thought that was sort of a

polite way of the chief signaling that we have an out-of-control president here and we need to do something about it.

It's the Laugh Fair podcast. I'm senior editor Scott R. Anderson, with Kathleen Kluson,

Marty Leaderman and Peter Harrell, all of the Georgetown University Law Center. I do think we saw the justice that Chief Justice, the other justice, is really finding galling the chaos of the trade policy, and if we see continued chaos just under a new statutory name, we'll see how that plays out in the courts. Today, we're discussing the Supreme Court's recent tariff decision, and what its implications

may be for President Trump's trade policies and beyond. So we're excited to have our all-star Georgetown panel back together. Again, we all sat down the day of oral arguments and learning resources and VOS elections, the two cases, centering on President Trump's tariff agenda. We now have an opinion. It's been a few days. Peter was kind of to join us the day of the opinion for our live stream on litigation developments.

Well, we were able to get the whole panel together until now, but we wanted to get together because there's a lot to break down about this opinion. And what comes next, and we cannot think of three better people to talk about it with. So let's start with the holding itself.

“We ended up with a, I think it's fair to say, easier to think at least at the opinion,”

kind of three different stripes, a six to three majority striking down the whole universe of IEPA based tariffs, including both the reciprocal global tariffs applying to all U.S. trading partners, Trump administration imposed under the international emergency economic powers act. And the, quote, unquote, trafficking tariffs were relating to fentanyl, unlawful immigration, a few other specific bilateral issues imposed on Canada, Mexico, and China,

both of which were subject to legal challenges before the court. Of course, this also in the holding ruling that IEPA does not authorize revenue-generating tariffs. It also has implications for other tariffs. The Trump administration imposed under the same set of authorities, including threatened tariffs against Europe-related agreement, including secondary tariffs relating to Iran, a whole bunch of other actions that weren't technically before the court,

but that this clearly has ramifications for. And we had a two-part majority. We had the three Democratic appointees taking one perspective focused on conventional statutory interpretation. Three Republican appointees Chief Justice Roberts, Amy Coney Barrett, and Justice

“Gorsuch embracing different stripes. I think it's fair to say of the major question's doctrine,”

at least in addition to or supplementing this conventional statutory interpretation approach. And then we have the dissenters, Alito, Cavanaugh, and Thomas, descending for slightly different reasons, but most generally being viewing that the president deserves a fair amount of reference and can get broad delegation from Congress in this particular issue set.

So Peter, I want to start with you first elaborate or build out on any part of that. I might have

lighted it trying to give a quick summary that you think is particularly relevant. But talk to us about what surprised you about this opinion, what ways it may have departed from what you were expecting, what ways I lined up with you were expecting, and what the implications are likely to be for the Trump administration's court trade agenda. We'll talk a little about what comes next afterwards, but like how big a blow is this, essentially. I mean, I will say

this was actually kind of the opinion I thought we would get, right? I had thought from the beginning that a majority of the Supreme Court was going to conclude that I eba this 1977 emergency power statute simply didn't authorize the power to tariff. And they're both like doctrinal reasons. I thought the court would get there, and there were also pragmatic reasons. I thought the court would get there. Maybe I'll start with the pragmatic reasons, which is that if you

weren't going to take this kind of clean reading of I eba, the power to tariff is simply not within the authorities granted by the statute. The court was going to discover, well, if the court both didn't want to have this kind of clean reading of the statute, and also did not want to give the president a truly unbounded tariff authority. The court was going to quickly discover it was going to have to get in the business of drawing lines about

worked on I eba and the sanctions context for decades now, I'm sort of embarrassed to admit,

did not think that the court would want to get into that particular morale. So I actually always

thought that if they were going to limit the power, the president's powers under I eba, they would find a way to do it cleanly. And the logical way for them to do it cleanly was just simply read the stretch statute is not containing a tariff power. So I actually thought this was the outcome of where they would land. It was interesting to me a little bit on how they get there. And that of course is where you saw the most split between the majority opinion, the opinion of the court,

by the chief justice and the concurrence by Justice Kagan, which is, do you really need the major

“questions doctrine as a part of the way to get there or the chief justice? I think was looking”

both at the bounds of the statute, comparing the way in which this statute was drafted with the way tariff statutes are drafted. And then concluding in light of how the tariff statutes are drafted, there is not a kind of clear congressional authorization for tariffs here, and because of the economic significance of these tariffs, which the government itself had readily conceded that these were enormously economically significant Congress should have spoken clearly.

Obviously, in the concurring opinion, liberal justices are kind of continuing to maintain their belief that the major questions doctrine should not be a thing. And so, you know, looked more narrowly, it sort of narrow down quite the road, looked more specifically at the, you know, history and text of the statute to reach the same outcome. Kathleen, let me come to you with the same question. I mean, what jumped out at you or was surprising here? I mean, like a big divide to me,

it's something we talked about a lot last time is these two different sets of tariffs. Because particularly if you're looking at through the major questions doctrine lens, one side of these tariffs was arguably much more major than the other in terms of policy impact, although maybe not it's hard to then say, well, then how can you read the statute differently as two different contexts? Were you surprised that this is how we ended in this sort of

“perspective? And if so, why, or why not? So, I think as for the reasons Peter said, it would be”

hard to be surprised by very much, right? There were so many different threads and ways that the justices could online themselves here. So, very little would surprise me in this outcome.

This distinction between a never, I, but I, I, but never allows tariffs or sometimes that Peter was

talking about, I mean, when you read the opening sentence of the chief justices opinion, it kind of sounds like they're going for the sometimes. But because the way they start, they talk about the scope of the president's action, any country, any rate, any product, any time, made it sound like that was what pushed them over the edge, right? That you couldn't, you just couldn't like the federal circuit majority. You just couldn't have something quite so big. But maybe

I even would allow something smaller. And so, of course, as you're reading, there are a few moments where you thought, especially the treatment of Yoshida, oh, maybe maybe they're going to equivocated, maybe they'll come back to the, the maybe option and allow something like secondary

“tariffs that we talked about. And maybe that would have been a better outcome, legally. I think”

there, I, I understand what you're saying, Peter, on the other hand, secondary tariffs might have

been a pretty useful tool. And I've always said, you guys have heard me say this before,

if we had only had secondaries from the beginning, maybe we wouldn't be here at all. So, so I think Scott bottom line is we read that opening sentence. You thought, gosh, maybe there's a space here for sometimes I eat potatoes, but overall, not much to surprise. Footnote to that is I was a little surprised at the rosy relationship between Congress and the executive that the chief justice opinion seems to suggest on trade. They're talking

about all these other external statutes that have been working so well and looking at all the love. I'm not sure many trade lawyers would agree with that characterization, but it's something that we can all go on and discuss. I just want to jump in and make one come excited. Actually, one area where I very much agree with you, Kathleen, is that I actually think that if the facts of this case have been very different. If there had been one or two instances of secondary

tariffs or there was a clear national security justification, you know, on some country that was selling oil to Cuba or something like that, I actually think you might have seen the justices come down in a different place, but they were looking at this and finalizing this opinion at the very moment where Donald Trump is threatening tariffs over Greenland. And so I think the justices there has to be a practical reality of as they are finalizing this opinion, they see the president

threatening geopolitical tariffs, but over frankly, a kind of absurd geopolitical issue. And I think it had to have weighed in them that very practically, if you gave this particular president a geopolitical tariff authority, he was not going to keep that as they kind of limited and contained geopolitical tariff authority. If you know a different president who was doing narrow geopolitical tariffs, I actually agree with you it might have come out differently. Of course, that assumes Peter that that

It's just through other means. So I'm not sure it's such a bright line on those major sort of

he's a geopolitical or other foreign policy issues that the president might want to use the tariff power for. I want to weigh in, I mean, to a certain extent, Kathleen and Peter have

“pointed to where I wanted to go, which is that I think the really large question here, the”

looming question going well beyond tariffs and I keep to how the court is going to deal with President Trump in particular, in this and other cases, that they're right, that to a certain extent, this is a Trump created outcome that might not have been present in other circumstances and

now give a couple of examples from the case itself. But that because the court is very wary to say

the least, of actually issuing a specifically anti-Trump opinion and of various different sorts. The irony is that they end up issuing the broadest possible ruling that will tie the hands of this and every future president to come under IEPA. So it's a classic case of if you want the court to to contract and restrict executive power, just abuse that power, broadly enough. And that's what you'll get. So let me give, I mean, Peter, your hypo is right there, right? And it's in Justice

Kavanaugh's dissenting opinion. In August of last year, President Trump issued another IEPA

tariff order with respect to India based on an alleged extraordinary and unusual threat of what Russia

is doing in Ukraine. And the tariff was imposed on India because India continued to import Russian Federation oil. All right. Let's say that's all Trump had done. He had said there's a, there's a national crisis with respect to Ukraine. We need to cut out, we need to put leverage on Russia to change its posture toward Ukraine. One of our allies, India, is undermining that effort by purchasing tons of oil from Russia. So we're going to start imposing IEPA tariffs on India. And that had been litigated

and gone up to the Supreme Court. I'll give you another hypo that comes from the oral argument. Justice Thomas asked Neil Kochall, if one of our major trading partners, for example, China, were holding U.S. citizens hostage, could the president instead of embargoing or setting quotas on Chinese imports, say the most effective way to gain leverage and to get China to release our hostages, is to impose a tariff to leverage our position. Imagine that case, imagine a

president that used IEPA to do that. I, I don't think it's too much of a stretch to say that if either of those cases had come before the court, the court would have held 9 to 0 or close to it that IEPA authorizes tariffs of that sort. But instead the court's holding is categorically no, IEPA doesn't authorize any tariffs full stop. Why did it do that? Because of the way this IEPA authority is being misused by President Trump. And so they could have gone a couple of other ways,

one of which we talked about in the last episode. And when the episode we taped after,

“I think after the world argument, which is they could have said that President Trump's findings”

that there was an extraordinary and unusual threat to national security caused by the trade deficits, was simply not plausible and not did not warrant judicial difference. And therefore the predicate for invoking IEPA was not there. And this court so far is just unwilling to challenge presidential findings pursuant to statutory delegations that are extraordinarily broad, even though this president every day is exploiting those broad delegations to make findings that

virtually no one thinks are plausible. Secondly, it's what Peter was describing. Trump then proceeded even with respect to the emergency and the extraordinary threat that he had identified, not to act in any consistent way, but to act the way Donald Trump does with respect to everything, which is to use this authority as it means of daily leverage and poker playing and changing it right left inside ways every day in what seems to be just matters of peak or matters of strategy

“or in order to look unpredictable so the trading partners will do his bidding. That's what he's”

doing with Iran right now with the threat of using force and the like. So to my mind, the most telling paragraph in the entire opinion is one that Kathleen sort of alluded to it, but I'm page three of the chiefs opinion. The chief describes since imposing the tariffs. The president has

tariff on Chinese goods he increased it to 20. Then he removed a statutory exemption.

Then less than a week after that, he increased the rate on Chinese goods from 34% to 84%. The very next day he increased it to 125. Then he brought that then he shifted sets of goods into an out of the reciprocal tariff framework, et cetera, et cetera, et cetera. Every day he wasn't treating iEpo the way it Congress or anyone else thought it ought to be used. He was instead using it to be this matter of leverage in which every day he was acting almost arbitrarily.

Not regulating it. If if the word regulate imports and iEpo means something, it doesn't mean this kind of daily shifting non-regulatory arbitrary sort of action. And I thought that was sort of a polite way of the chief signaling that we have an out of control president here and we need to do something about it. But instead of simply saying, this is not the kind of regulation that iEpo contemplates. We're going to strike down what president Trump is doing because he's

abusing this. They got six votes for actually deciding, well, that shows that this statute

can be abused and so we are going to hold that it never authorizes tariffs even if in one of those

“other cases that we've hypothesized and that the justices have hypothesized. I think the court”

would have overwhelmingly been inclined to say that iEpo does authorize tariffs. Or there wouldn't have been any litigation at all? Or there might not have been any or the lower courts might have said so, and it would have been certain now. You know, Marty, the striking thing is I hear your point of bringing back the chief justice is my great. It really comes through in his opinion, the chaos of it. I actually think you could have made a very similar argument, not the coming

down, but the going up to what the Biden administration did on Russia under iEpo in early 22, like over about four weeks, there were like 16 different iEpo sanctions actions that were rolled out. And so what's interesting is like that is actually exact sort of chaotic. We're going to like do a bunch of things on short order, but in many different torches,

“use exactly how iEpo has been used in the sanctions context for many years. And that I and I think”

for the justices trying to draw a line about, well, why would we allow that chaotic 16 actions in two weeks at right after Russia invades Ukraine, but not allow it in the tariff context? I think that's the line they were starting to realize they'd have a hard time drawing. So let me turn back to you, Marty on an aspect of this and pivot this a little bit and it's the broader implications of the mythological tools we're seeing the justices use here. The big one that's gotten the focus is the

major questions, Doctor. We obviously have this debate between Justice Barrett, Justice Gorsuch about what is it exactly? Is it relative of the non-delegation doctrine with some sort of constitutional foundation? Is it really just a common sense doctor interpretation tool? Beyond that though, there is this question about how it applies in context like this where you have a spectrum of potential uses of an authority and you're being asked to evaluate it in a particular factual

circumstance with a holding that necessarily extends well beyond that. But using a test that in its foundation is about the potential ramifications of how you use it, like the policy ramifications. Do we get any information from this opinion really about how the court's going to apply that complicated question which it's hard to imagine doesn't come up again for this administration which really is quite willing to aggressively interpret and apply its statutory authorities and

constitutional authorities in very disruptive ways. So does this even hint about how the

“court will handle that? Yeah, my tip on this is a little in the ocean credit. I think the message”

on this Justice Gorsuch is dozens and dozens of pages of trying to revive a very strong major questions, Doctor, and that he would ground in some sort of constitutional requirement that Congress at least speak clearly or else the Constitution doesn't allow it to delegate broadly.

So by and that's basically reviewed by seven or eight of the other justices. I'm not sure

where the chief is or if the chief cares about a grand unified theory as long as he has this tool available. But certainly the three, the, the three, the cake and so to my or Jackson component reject that. And clearly the three dissenters think that it shouldn't apply in the context of foreign affairs. And Justice Barrett, I think politely but very firmly rebukes Justice Cavanol and the whole idea that the major questions, Doctor, and is a constitutionally based. She says in the end of Congress,

wants to delegate broadly to the executive who are we to stop them from doing so. And so it's both the major questions, Doctor, and the non-delegation impulse behind it in Gorsuch. I think

review article that he writes to try to desperately try to bring some of his colleagues on board

and cake and embarrass in particular saying thank you for the invitation. That's very nice of you but no, we're not going there and politely rebuking him. So I don't really think there is much of a major questions, Doctorant. That said, I do think that what goes under the moniker of major questions, Doctorant is very different presumptions on the part of the various justices about what it is reasonable to assume Congress intends across various sorts of cases.

For Justice Cavanaugh, it seems absolutely unthinkable that Congress would not delegate to the president, the broadest, most unbounded foreign affairs powers imaginable. That's his view of the world in what Congress has been doing for a hundred years, going back to Curtis right and before.

And he thinks it's just otherworldly to think that Congress didn't mean in IEPA to give a blank

check to the president. He thinks that's the appropriate baseline presumption that one should have. And the other justices think otherwise and they think, for instance, then in the domestic settings where the major questions, Doctorant came up in the Biden administration, it's completely reasonable to think that Congress gave broad authorities to OSHA and to HHS and to the CDC and all these other and to the EPA and other examples. And Justice Barrett has already shown

in her separate opinion in the student loans case. Know that she starts from a proposition, the her understanding is that Congress wouldn't give the executive these broad powers. It would keep them to themselves. And so it's really that there are divisions on the court about their underlying baseline presumptions about what Congress intends that are deep and important and Peter is right. This comes through in Cavanaugh, opinion. In the major questions cases in the

“Biden administration, they thought, I think wrongly, but the majority believed that the Biden”

administration was using broad delegations that Congress gave to the executive branch for one thing in order to real accomplish things that were outside what Congress was trying to do. And that the delegations were being exploited or protectionally abused, not in the same way that Trump is doing here. But it's really having the executive branch is trying to take advantage of broad delegations in way that Congress, according to these justices, would not have contemplated or wanted.

So I think that the real split is sort of these background presumptions about what what Congress has intended over the years with respect to all of these broad delegations both domestic and foreign. That's so interesting. Kathleen, let come to you to spin off a part of this question. That is the foreign versus domestic split. Can we do see this wrestling with this? You see Justice Cavanaugh building on a theme that I think has been, he's been

pretty reliable on for 15, 20 years now, at least, which is the idea that in a foreign relations that's just pretty context, statutory delegations, the executive branch should get the benefit of a doubt on, at least until you get the point where there's unambiguously in a limitation on their authority. Justice Roberts, I read a little bit of flexing this. He says, well, it's not clear that this is the type of, that this is the type of foreign affairs context where

“that comes into play. At least that's how I read it a little bit. I think you could read it”

different ways. How do we see the foreign affairs context playing here? Is it that trade is not a foreign affairs issue? Is it that foreign affairs non-foreign affairs is not a convenient distinction or is it, you can say, about the national security? Is this about the normalization of foreign relations law? Kind of an idea that if you're a foreign relations law nerd, we've heard a lot about last 15 years to different effects. What do you think this tells us about how the

justice is view that lens when applied to different authorities? I think it's a great question Scott and one that probably takes some more time for us all to unpack as we study over these opinions some more. Your question really speaks to the frame that jumps out off the page here that is the tax frame. But you think about what is the foreign commerce power? It is complex power that really draws on two different constitutional clauses. The tariff clause, the duty taxes clause, and then the

power to regulate commerce with foreign nations clause, the foreign commerce clause, taken together. That really forms the foreign commerce power. They really come together. So here, the justice has had the option presented very clearly by the parties of going down one road or the other. Is this a regulate foreign affairs sort of thing? Or is this a tax sort of thing? And tax is just comes through

“so clearly. So I think you're right that there's a lot here to understand more about and have”

foreign affairs implications more broadly. But trade really situates itself right at that intersection.

And that's always been part of the challenge in trade law. You see it repeatedly over the years.

that come up repeatedly since the founding and they're going to continue to come up. And that gives

me the chance to say one further thing, two here, Scott, which is about sort of the before and after what happened on Friday from a trade law perspective. And little talk more I know about what's happened in the last week. But simply to say that before 10 a.m. last Friday, you could say maybe we had six major clear statutes that allowed the president to impose pretty significant economic actions. That is trade actions. When he felt there were some sort of national security basis to do so.

And at 10 a.m. we just had five statutes that allowed the president to impose major economic actions on the basis of a very loose definition of national security. So I hear a lot. I've just been abroad this week and talking to a number of governments and colleagues and importers and exporters. And you know, it's like, oh, let's celebrate. What a win. This is such a big win. And I feel like this is, I wanted to say, did you read my blog post last year? Because you know,

it was last May when the CIT first came down against the president that I tried to say, hey,

everybody, you don't force for trees because this is a bit of a red herring. As we've already

“seen this week, the president is going to move forward with this policy. And again, I think that”

speaks to your question as to how trade is just a really special area. Quick comment. I can't resist, but I'll be showing my age. I mean, anyone who was involved in the mood courts and then in the actual oral argument in this case, new going in and it was confirmed that the oral, the actual oral argument, the SG was going to try to pitch this as a national security foreign affairs case. And Neil Kochall was going to try to pitch it as a, as a taxing case.

And some of the justices actually asked. They're like, should we treat this as a domestic or foreign affairs? And it's like shimmer. It's both a dessert topping and a four wax. I don't know if that resonates with how many of our viewers will remember the, we'll remember the reference, but of course it's both. These are permeable categories. And in this case, it's not only that it's a tax, but it's actually assessed against domestic actors for foreign affairs purposes. It's very

much like our viewers will know this reference. I hope like youngstown, right? Truman went in and said season was still, companies was a, was a wartime measure. It was done for national security affairs. It's about Korea. And the courts like, no, that's, that would be one thing. Talk to us, come back to us later if you do something in Korea. Your season still manufacturing facilities here in the United States. And so it's both, right? And so there's no, even if the doctrine were

to neatly break down in terms of you can delegate broadly in national security and foreign affairs, but not in domestic, of course, you can do both. The case is just wouldn't fit neatly on one side of the line or the other. Well, I want to turn to these other tariff authorities, which is going to be the next lines of battle that we're going to see over the next year or two, as these get litigated out. Before I do the, let me turn to you on a last aspect of the majority decision that Kathleen

mentioned that I, I want to go on. And that is the framing of this as a taxing clause issue,

“because we do see all six justices in, I think section two A1, right? The kind of conventional”

statutory interpretation before you get to the major question doctrine that that the three Democratic appointees out that out of, they frame the taxing clause as having a kind of unique

significance. They quote federal papers as saying that power to tax was the most important

power given to the union by the framers. And that for that reason, I had very specific limitations on it that, you know, builds the fund the government originate with the house, which they quote. And they say for that reason, we assume that the Congress were going to give away that authority they would do it expressly. That is ramifications for a lot of things beyond just AEPA and the taxing clause in this context of tariffs. You know, you've written for a law fair and you know, you and I've talked about

efforts to get funding out in the video, right, which maybe not stretch out of the tax, but is revenue generating for the US government. In fact, revenue generation through unconventional channels is actually kind of a signature move with this administration, whether it's, you know, accepting gifts for which there are various statutory authorities. So I don't want to put it like there aren't or the NVIDIA deal or the mineral agreement with Ukraine, right, which I don't think

we 100% know what that looks like from a domestic law perspective, at least I haven't figured it out. So do you see this having broader ramifications, rather, parts of the Trump administration's agenda, and potentially other executive branch policy sets, or is this, is that maybe reading too much into the framing they adopted precisely to maybe get away from the more conventional foreign affairs

“lens some justice may have been pushing forward. I think it's going to be a very interesting”

question to see how that plays out. I actually begin with starting in the opposite way, which is and this comes through in the, the opinion, I think the, the court was worried that if they did not

importation or exportation, if the taxing power was embedded in this power to regulate what

would that mean in other contexts, right, would that mean, you know, the clean air, the EPA under the Clean Air Act could impose pollution taxes, would that mean, you know, motor vehicles, highway safety department could impose taxes, you know, motor vehicle regulations, right? So I think they worth they were thinking about it the other way that if Congress did not, if they did not rule that Congress has to give away this taxing power cleanly and clearly, they could find future

“presidents discovering all kinds of taxing powers in the federal federal code. So I think they”

that was reinforcing this view that, that, that, that, you know, as the history made clear, Congress did see the taxing power, the, the, the framers did see the taxing powers kind of a uniquely dangerous power that they wanted to invest, and that's where you saw the decision land. The other thing that I think was relevant there is relevant, there is a historical matter, and came through maybe a little bit in the opinion of not that much, is it, of course, when the framers were debating

the taxing power, they were overwhelmingly talking about tariffs, right? The, the tax that was in place largely for the federal government at the time of the founding was tariffs for the first several

decades of the government's existence, something like 80 to 90 percent of federal revenue is tariffs.

So actually, this is the kind of tax that the framers were, we're talking about, which is also just like a historical backdrop here. I think it is an interesting question, and I do think the way the court talked about the taxing power raises the odds that we might see some attempted legal challenges to some of these other creative ways the Trump administration is raising revenues. So you mentioned they are trying to get a sort of a tax off of Nvidia chip sales to mainland China.

They are also like take apparently going to be taking an ownership stake in various Japanese and Korean government funded investments in the United States, which kind of feels like a tax on those investments. So you know, there are various creative ways the administration is trying to raise revenue. And I think, you know, if I were looking as a way to challenge, I would feel a little bit more energized about challenging some of those in the light of the opinion that I would have before.

That said, there are going to be uphill problems in any of those challenges to those other kinds of raising revenue that this opinion doesn't address. All right. So we've got a good sense of this opinion. Let's look at the next phase of this fight, which we're already seeing beginning to play out. The day the opinion drops, I believe, President Trump says I'm reinstating global reciprocal tariffs using Section 122 with the 1974 trade act, one of the authorities that

have been in the discussions as a likely fall in authority for which you can do it for 150 days,

“before you need to go back to Congress. Although, I know I've heard some people say they think”

maybe he'll try and roll that over, reinit you in different ways, which I guess is possible. Then we have Section 232, three or one tariffs, a variety of other of the three digit tariffs following behind this that we started in investigations and the procedures for to get at. So Kathleen, why start with you to talk about this? You've, I think, been fairly bullish on the ability to get a lot of this tariff agenda back and through these authorities. I guess my question

for you is, if there is no delta, why didn't the Trump administration start this a long time ago? Because now it's stuck where it's got this 150 days and then it could have started these investigations 232 and 301 a long time ago, frankly, when this challenge first got filed, that's fully what I expected to happen because I've been like, "Well, those shift to the statutory basis while

they're all getting litigated, they'll never have tasted a disruption." That didn't happen. What's

has prevented them from doing it this far? Why? And what is the delta that? Like, what is it? Why did they want to win this case? The first place so much that they didn't appear to want to endanger it by shifting over to these other statutory authorities earlier. Okay, so a couple things there implicit in what you said or maybe assumed it behind what you said there's got. One is that they haven't already started, of course, these have been in the works

I all of last year, so yeah, so yeah, I hear what you're saying, why didn't they end Iypa

“and go to these other things in the interim? Better way to describe it, yes. Sure, but I think that”

is the answer to the other question that you asked, which is why not do that in the first place that it were why Iypa was so important to the president? And this gives me a chance to plug what you would I do back in, you know, 2019, the president said he like Dyeypa, he wanted to use Iypa right for somebody told him he could use Iypa for tariffs and that time it was the Mexico was it's something with the border with Mexico, right? And so he is something he could just do like with

the stroke of his pen. And I think we've seen from this president something that he can do easily by himself at his own whim is something that he enjoys. And so at that time, 2019 right we know

right it seemed we knew it was top of mind. So I think that's why clearly this power was particularly

“important to him personally. I think for all the reasons that are sort of associated with this”

presidency. Peter, you wrote a really useful piece for us for law fair this week where you dug into not only the three big bucket of authorities I mentioned, 1.2, 2.32, 3.01, that people have been talking about, but also played out a little bit in a very useful way some of the legal arguments you might see for a challenge to those. Walk us through that little bit. Where do you see the strength and the potential vulnerabilities in this next wave of tariff action coming from the administration and how

do you kind of might see that play out? Yeah well so let's start with 1.22 because that is the one that the president invoked basically immediately you know within a couple hours this Supreme Port opinion he had invoked 1.22 to impose a 10% tariff on many U.S. imports. He is said that he's going to raise it to 15% though as we record this on Friday afternoon he is not yet raised

that 10% to 15%. So what 22 has never been used before and 1.22 is a product of a fairly unique

set of historical circumstances. It is an authority that gives the president when I pulled it up to make sure I have the words accurate here. Give the president the authority that whenever fundamental international payments problems require special import measures basically tariffs. One to deal with large and serious United States balance of payment deficits or to prevent depreciation of the dollar or to encourage cooperation with other countries and addressing balance of payments issues.

He can impose a 10% tariff for up to 150 days and so we've seen over the last week a lively debate in the press and on the social media platforms about whether there are in fact fundamental international payments problems which is clearly a precondition for the exercise of the statute and then whether the tariffs can help resolve balance of payment deficits and I have to say

“I think that at least as the framers of section 122 thought about these issues we probably”

don't have fundamental international payments problems and we probably don't have major structural balance of payments deficit. When they drafted 122 we were coming off the gold standard removing to a fixed to a floating exchange rate. There was some thought we might go back on a fixed exchange rate and so they wanted to give the president a sort of discrete authority to do what Nixon had done in 1971 which was to impose a temporary 1015% surcharge to help deal with

balance of payments issues and there's a lot of argument argument sort of as a factual matter that potentially we don't have these problems as a matter of fact today. That's and I think the

first question the courts are going to be asking is how much difference should they give to the

president on this matter? Because what we saw on Friday of last week was a president put out a long proclamation or he said his advisors had advised him that in addition to the ongoing trade deficit we had seen a reduction in the income earned by US investments overseas. We had seen the most negative net international investment position of any developed country in the United States. They made various factual findings around purported balance of payments deficit or creating international

payments problems. So the first question the court's going to ask is should they be reviewing whether or not these factual requirements are in fact matters? Should they just be deferring to the president here? And I will say that the the case law out of the court of international trade and the federal circuit which is where these cases are going to go before they go to the Supreme Court is reasonably

“deferential to the president on various findings in the trade areas. So I think that you know this”

is going to be litigated. I think we're clearly seeing interest out of the private sector and litigating

this. But I think it's going the first thing that's going to have to be overcome is this

difference that I think the courts are likely to show to the the president here. And one particular thing that I think the plaintiffs are going to have to deal with is the fact that when the CIT, the trial court that will hear any challenge to one 22 in a court of international trade ruled on the IEPA tariffs and ruled against the IEPA tariffs. The court of international trade actually said pretty directly that in its view as the court of international trade, the president probably could

15% rate and to the 150-day duration. So I think you have that particular, at least at the trial

court level, you have that particular challenge. And what the what the CIT did there was they basically

relied on a definition of the balance of payments that said that rather than the balance of payments being the aggregate balance of payments, it could be a referred 122 could refer to a deficit in any particular part of the balance of payments, which includes financial flows, which includes the trade deficit, etc. And there is clearly an imbalance in the different, you know, in one or more constituent pieces of this. So I think they're going to, you know, I think it would be interesting

to see this to be litigated as a policy matter. I'm quite skeptical of these 10% tariffs, but I'm not talking about this as a policymaker. That's neither here nor there. As a policy

matter, I'm quite skeptical, but I think that courts are going to be inclined to be deferential

to the president here. Can I hear you, Peter and Kathleen? You know, I know nothing about, I don't even know what balance of payments deficits are. But if you guys are right, that there's very little factual support for it, at least across the board. And the courts are

“that the challengers come in and they say, maybe you have to defer to the president on whether”

a balance of a U.S. balance of payments deficit is serious. But whether it is large is a factual determination that the courts can review. And thus far, the government hasn't provided any evidence at all that might have been the basis for that finding. At least at the broader level, is there a factual basis for the idea that there are large, even if serious U.S. balance of payments deficits or even your constituent parts, Peter, are any of them large? I mean, I know that

large is not a precise term, but surely the tariffs that he's imposed have to be at least roughly tailored to the scope of such balance of payments deficits. And I wonder if there is room there

for courts to say whatever difference we might apply, this just doesn't come within a million miles.

I mean, yes, and I'm just going back to what the president has declared. And I am a sort of

“trade lawyer. I am not an economist, right? And I think that is important because, you know, we saw”

John Roberts and the Chief Justice and the final part of his opinion, to basically say, you know, the courts aren't the economists, the courts aren't the national security experts. They're just there to interpret the law. And you know, the president has asserted in this proclamation. Various facts like that in 2024, the United States maintained a current account deficit, 4% of GDP, which was twice the share that prevailed between 2013 and 2019 and the highest since 2008. I mean,

again, I'm not the economist, they do, they did go through and cite some stats, statistics about money and financial things moving through the global economy to try to justify this position they're taking. Yeah, I would say I also would leave this to the economists for sure. But I think what Peter's describing is a problem that extends beyond 122, right, for all of the other statutes.

“And I think Scott this goes to what you were saying earlier, for all the other statutes,”

the effect of the Supreme Court decision pushes us into a litigation space that's very hard for plaintiffs to win. Right, for two reasons, one is the substantive reason that Peter has alluded to, that we talked about in prior podcasts and blog posts about this, this difference issue, right, especially when it comes to economic security. We've seen that as Peter said repeatedly in the 232 cases and then more recently in 301 as well. So that's a space where plaintiffs

don't want to be, I'm going to lose substantively if that's the posture that we continue to see. But secondly, procedurally, it's also very hard to win, right, because even though these things have a lot of investigative components, there are all sorts of their APA requirements that apply to the agencies, although not 122, is if there's the president acting. But where it comes to 301 and others, it's hard to win on the procedure because the court will send it back to the agency

to correct which they will do and then it will continue after that. So I think it's really, again, back to my theme of nothing to celebrate here, where we're in a much more complicated and more difficult space as the administration builds up its tariff wall again. But I want to add one thing because I do want to come back actually, Marty, a point you and the Scott made earlier, which is that one thing that clearly seemed to, that the Chief Justice clearly seemed to find galling was this way,

the tariff rates kind of moved around all the time and seemed unbounded by any reasonable sort of

is very clearly that you should have, you know, a on 122, a time-limited tariff of up to 15%.

“In 301, it is very clearly you should have a tariff against a country to deal with a particular”

trade problem. And where presidents have used 301 in the past, you know, for example, on China during Trump's term, the court's have been pretty deferential. I do think there'll be a question if all of a sudden, we see Trump trying to use these statutes to do what he did under IEPA, you know, move rates around constantly, take rates way up through the roof, you know, not just it's sort of a couple of percent or even 10%, but you know, he's priced with 301 to do, you know, 45% tariff

and then bring them down. Like I think if we see the same chaos, well, there will still be a very hard case law of deference hill to overcome. I think at that point, you know, the courts might

begin to look a little bit more skeptically at, you know, some of what is going on and I can't

kind of within the case law walk you how we get from case law that is currently extremely deferential to case law that is less deferential, but I do think we saw the justice that Chief Justice, the other justice is really finding galling the chaos of the trade policy and if we see continued chaos just under new a new statutory name, we'll see how that plays out in the courts. Kathleen, there's one other part of this, I mean, two of the parts we need to talk

about. There's questions of refunds, uh, which is going to be a little bit of a legal fight coming out of this, and then the various trade deals, that of course is the actual objective of the Trump administration. This is the tool they were using to leverage themselves into better trade deals

with various trading partners. Tell us about how we've seen that impact things so far in both directions

and the refund being a new new challenge, the administration has to undertake, and where we think that may go in the coming weeks. Well, uh, yeah, Scott, we could have a whole other podcast, of course, on another episode on on those topics, so we're okay. All right, we briefly, the refunds, right,

“yeah, I think that that is that merits another, another episode given the complexities, but”

either we're going to see that in the courts, uh, in in customs itself or by Congress, and because customs and Congress are kind of out of the picture, uh, the only remaining C of my three Cs really is the courts. So we're going to see some, uh, court, some litigation there that will take a lot of time, uh, and we can get into that on another on another day. On the deals, also merits us own episode, but let's, let's just be brief about it. I, I think there's a big question

that a factual question that we have not heard the answer to that's really important coming out of the decision, and that is, uh, and what the president did Friday afternoon, and that is what is the status of any of the rates that were supposedly agreed, I use the term loosely, but I, I don't think we know the answer to that, uh, and on the basis of, I said, my, my travels this week, other people don't seem to know either. We really need a clear statement from the administrations

to how they're treating those deals. And the reason we need certainty from the administration is because of his Friday executive order concerning taking down all the IEPA statute, all the IEPA EOs, which was actually very helpful because it wasn't really clear what would happen next right after the Supreme Court issued its decision. But there's some ambiguous language there

“Scott that I think merits everyone's further review, has it's just not clear from that whether”

some of the IOs implementing the deals, those still stand or not. So there's a lot of chatter on the part of U.S. Two, I think they're going to try and rebuild using 301 to get back to the deal, but I think, again, it's a question as to how are you treating all the other implemented deals those executive orders as they could be stance still standing right now? So we're almost out of time, Marty, I want to come back to you with one last question from the non-trade lawyer perspective.

I think Kathleen and Peter are bringing a lot of experience in this area of law to this question. But I will admit, when I look at this set of cases with these other authorities, I see a couple of factors that might be more nervous if I were the government, including we are now, most of this press in the highly differential is from the Federal Circuit, not from the Supreme Court. It did a pre-loper bright era before the Court is really reconsidered how we're supposed

to improve approaching certain statues to this context as before this decision, where again, they seem to give this super-powered sort of delegation principle to the taxing power, which I would read as implying not just a binary, is it delegated, is it not expressed or not, but also to the scope of delegation. I would think it would weigh in to how you would interpret some of these terms against broader, more open-ended interpretation. How do you view this?

I mean, is this a case where we might see the Supreme Court surprise us and how closely they reach many statutes compared to the Federal Circuit in the past, or is there likely to be more

So, are you asking just about trade statutes, or are you asking about stat...

Potentially more broadly, too.

“Felications more broadly, I'm not sure there's going to be a one-size-fits-all answer to that. I think”

as the courts go through the statutes, it could be the enemy aliens act, it could be the power to remove a federal reserve governor for cause, right? All these different statutes that come before the court, I think they'll deal with each of them separately, but what I would predict, or what seems to be the cases, instead of just taking, and this is to circle back to where we started

this podcast, instead of simply issuing what we might call various different kinds of Trump-specific

holdings. This president's findings were contextual, we're not going to defer to them. This president has, yes, it's a broad delegation, but it requires some sort of reasonableness, a non-arbitraryness, and this seems wildly arbitrary. It seems that the justices are more inclined to issue, and the litigants are more inclined to litigate, sort of broad off-on questions about whether statute X, how to construe statute X.

It happened in the Illinois National Guard case that I filed a briefing, right? They instead of deciding what it meant to be unable to execute federal immigration laws, or whether Trump's findings to that effect should be delegated, they issued a holding with respect to what it meant to be the regular forces available to the president, and I think that I would not be at all surprised

“if that's what we find in many of these cases, that the court will be issuing statutory construction”

rulings and holdings, that it might not otherwise in more reasonable and more tailored and more cabin circumstances within ordinary president of the court. What's really interesting about the cabinet opinion, he points back to Yoshida, he points back to Dames and Mori, he points back to the other chair of case that these were fairly overwhelming if not unanimous decisions deferring to the president, and the underlying sub-rose of theme of the Roberts opinion of the others is, how can you possibly

be analogous into those cases when there were reasonable presidents doing reasonable things, of course we upheld those, they're not remotely analogous to what we have here, but the court's unwilling to say that as a holding, and so what that means is that 98% of the briefs in the world argument and probably the decisions by the justices are going to be on broad questions of does the statute cover acts, just as here it was does Ayypa allow tariffs full stop, and that's a strange

position for the court to be in, to issue perhaps quite limiting constructions of broad statutory delegations in order to prevent the abuse of those statutes by a president who seems willing to exploit them to the health. Who knows, I mean maybe that will be true in some of the cases but not others, but that's so far that seems to be the pattern. Well we will all have to keep our eyes peeled to the cases to come and maybe we will have reason to reconvene, but until then we are out of time,

Marty Lederman, Peter Harold, Kathleen, class and thank you for joining us on the Law Fair podcast. Thank you. Thanks so much.

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