Supreme Court Weighs Trump’s Tariffs And The Limits Of Presidential Power

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Speaker 3 Hey there, it's the NPR NPR Politics Podcast. I'm Tamra Keith.
I cover the White House.

Speaker 5 I'm Carrie Johnson. I cover the Justice Department.

Speaker 4 And I'm Danielle Kurtz-Laban. I also cover the White House.

Speaker 3 And today on the show, the Supreme Court considers President Trump's tariff policy and key questions about presidential power.

Speaker 3 But before we get to the arguments, Danielle, take us back to Liberation Day and remind us of how President Trump is using tariffs in this second term. Sure.

Speaker 4 Well, the short answer to how Trump is using tariffs is however he wants to. He has imposed widespread tariffs, and he announces them just at the drop of a hat.

Speaker 4 He goes on social media and says the tariff on X country is 50%, 40%, 30%, whatever.

Speaker 3 I'm remembering he saw an ad featuring Ronald Reagan a couple of weeks ago, and bam, Canada gets a 10% additional tariff.

Speaker 4 Absolutely. And what he's doing to impose these country-by-country tariffs is using a law called the International Emergency Economic Powers Act, which we're going to be calling IEPA today.

Speaker 4 That is the law he is using to justify these country-by-country tariffs. That law allows a president to take certain measures.
It gives a president certain broad powers when there is an emergency.

Speaker 4 So you alluded to Liberation Day. Trump used IEPA to do, for example, the tariffs that he announced in the Rose Garden on April 2nd, all those pictures of Trump holding up a big table of tariff rates.

Speaker 4 Those are the Liberation Day tariffs. He used IEPA to impose those.
And the emergency he cited to impose those is America's big persistent trade deficit. So those are IEPA tariffs.

Speaker 4 Similarly, he used IEPA to impose tariffs on Canada, Mexico, and China. He said to combat the emergency of fentanyl.

Speaker 4 And what's remarkable about all of these tariffs is that he has been able to impose them on his own without investigations, without even Congress, whom the Constitution gives the power of taxation.

Speaker 3 And Kerry, obviously, this has been challenged, and that's how it ended up at the Supreme Court. What are the people who are challenging these tariffs arguing?

Speaker 5 They basically say this IEPA law has never been used in this way by a prior president. The law itself does not include the word tariff.

Speaker 5 And in fact, this statute was passed in 1977 to limit presidential power after something Richard Nixon tried to do. You know, the challengers also say that tariffs are taxes.

Speaker 5 And as Danielle said, that power is supposed to be with Congress, not the White House.

Speaker 4 And since IIPA doesn't use the word tariff, a big phrase that did come up in arguments a lot was the phrase regulate importation.

Speaker 4 The government is arguing that those words, regulate importation, include the power to tariff.

Speaker 4 Now, that led to some really interesting arguments because the people challenging the tariff said, wait a minute, that does not include that power at all.

Speaker 4 And the challenger said, look, this law does give a president broad powers. It gives the president the power to impose embargoes, quotas,

Speaker 4 even really big powers to do those things. But it simply does not give the president the power to raise revenue, to levy a tax.

Speaker 4 And that led to this really interesting exchange between Justice Kavanaugh and Benjamin Gutman, a lawyer for the Challengers.

Speaker 4 Kavanaugh was saying, okay, why would the president have broad powers over here, but no power to tax? He then likened it to a donut hole. Here's Kavanaugh, then Gutman.

Speaker 6 Why would a rational Congress say, yeah, we're going to give the president the power to shut down trade? I mean, think about the effects, but you're admitting that that power's in there.

Speaker 6 But can't do a 1% tariff. That doesn't seem to have a lot of common sense behind it.

Speaker 7 I think it absolutely does because it's a fundamentally different power. It's not a donut hole, it's a different kind of pastry.

Speaker 4 And that got a really big laugh in the court,

Speaker 4 including from Kavanaugh. But the point here that Gutman was making is this is not about amounts of power, this is about types of power.

Speaker 4 And the revenue-raising power is just not something that the president can have, not under this law.

Speaker 3 And while we're talking about the people who are challenging the president's use of tariffs, Kerry, I think it's important to point out that this wasn't just like Democratic attorneys generals and liberals only opposing a Trump policy, that there are conservative legal scholars that have a lot of concerns here, too.

Speaker 5 They absolutely have. We've had conservative and libertarian think tanks helping to bring some of these cases.

Speaker 5 Retired Judge Michael McConnell, a very conservative lawyer, was on the briefs on this case, as was Neil Cottyall. He served as the acting solicitor general during the Obama years.

Speaker 5 And so this issue has not fallen evenly along political or partisan lines in the legal community at all.

Speaker 3 And how is the Trump administration responding to arguments that they are going beyond what is allowed under the law?

Speaker 5 The Solicitor General, John Sauer, basically said the president has this power, and President Trump himself has said that it would be ruinous.

Speaker 5 It would be ruinous for the country for him not to impose these tariffs. Just today, he told a group of reporters it would be devastating if the Supreme Court ruled against him in this case.

Speaker 4 Yeah, and in trying to justify how the president would have the power to tax under this law, The government was making the argument that there's a difference between a tariff as a tax, as a revenue raiser, and a tariff as a regulation.

Speaker 4 And Sauer was arguing this is a regulatory tariff because it's meant to induce certain certain things to happen.

Speaker 4 He kept saying, if this tariff is never paid, that means it worked because that means Americans are not paying the tariff because they're buying American.

Speaker 4 And a big goal of these tariffs is to boost American manufacturing.

Speaker 4 But you have to wonder how that argument lands on the justices or anyone else listening to this, because if you listen to President Trump, what is he talking about constantly?

Speaker 4 Is the revenue raised by these tariffs? They most certainly are bringing in revenue. So I'm not sure how that argument landed on the justices that, no, these are regulatory.

Speaker 4 Well, maybe, but they certainly are bringing in money.

Speaker 3 The president doesn't stop talking about how much money he's making for America.

Speaker 3 Kerry, when it comes to the Supreme Court, we are definitely not in the business of trying to guess where they will land, but there was a lot of back and forth.

Speaker 3 How do you assess how the justices approached these arguments?

Speaker 5 Yeah, hard to predict, but some of the toughest questions came from some of the conservative justices, including Neil Gorsuch, who himself was Trump's first appointee to the Supreme Court.

Speaker 5 Gorsuch, a solid conservative voice.

Speaker 5 It is hard to predict this case.

Speaker 5 Even before the arguments, the Solicitor General for President Biden, Elizabeth Prelauger, had told an audience at a conference that this case was basically a coin toss.

Speaker 5 It was going to be very difficult to unscramble the eggs since these tariffs had already gone into effect. And I'm sure the justices are going to have to consider that as they decide their votes.

Speaker 3 All right, well, let's take a quick break and we will have more on this in a moment.

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Speaker 3 And And we're back and we've been talking about the legal fight over President Trump's tariffs, which this week landed at the U.S. Supreme Court.

Speaker 3 Danielle, President Trump has leaned heavily on tariffs for a variety of purposes. What would the impact on his policy agenda be if the court ends up deciding against him?

Speaker 4 Well, frustratingly, it's unclear. Now, no matter what, if they decided against his tariffs, it would be huge.

Speaker 4 Because the way to think about Trump's tariffs this term is that they fall into two buckets. You have the IIPA tariffs, which are the ones he imposes on different countries,

Speaker 4 and the Section 232 tariffs, which are the ones he imposes on different goods, like steel and aluminum and cars and so on. If the IIPA tariffs go away, yeah, that's half of his tariff policy agenda.

Speaker 4 That is a very big deal. But that said, if the IIPA tariffs did go away, there are several other laws the administration could use to try to replace the IIPA tariffs.
Now, those laws aren't identical.

Speaker 4 They may not allow Trump to do tariffs at his whim. Some require investigations first.
some would only be temporary tariffs.

Speaker 4 So, in other words, if you overturn the AIPA tariffs, it would weaken but not by any means remove Trump's power to tariff things. Huh.

Speaker 3 Well, let's talk about money. Since April, the United States has brought in more than $150 billion in tariff revenue.

Speaker 3 What could happen to that money if the Supreme Court rules that many of Trump's tariffs were illegal?

Speaker 4 Well, it's complicated. I've talked to legal experts about this, and there could slash would likely be some form of refunds of all of those tariffs that have been paid back.

Speaker 4 But as you might imagine, with all of these thousands upon thousands of companies paying the tariffs, that could be really, really complicated.

Speaker 4 I mean, one of the big questions is, if there are refunds, what does that look like? For example, the justices could say, we're going to refund the money to only the companies involved in this case.

Speaker 4 Or they could say there are going to be more refunds. There could be a process by which companies all over the country only get a refund if they file a lawsuit, which would be legal chaos.

Speaker 4 So we don't know how that would look.

Speaker 5 You know, one thing that really struck me is that the justices themselves were grappling with that question, most notably Justice Amy Coney Barrett, another appointee of President Trump.

Speaker 4 And then if you win, tell me how the reimbursement process would work.

Speaker 10 Would it be a complete mess? I mean, you're saying before the government promised reimbursement, and now you're saying, you know, well, that's rich but how would this work?

Speaker 10 It seems to me like it could be a mess.

Speaker 8 So the first thing I'd say is that just underscores just how major a question this is.

Speaker 8 The very fact that you were dealing with this, in this case, the government stipulated for the five plaintiffs that they would get the refunds.

Speaker 5 And that was the lawyer for the plaintiffs, Neil Kotyall, a former Justice Department official under President Obama.

Speaker 5 Cottyall basically said there's a way to cabin or limit some of the implications if the justices were to rule in the challengers' favor in this case.

Speaker 5 And he also introduced this idea of the major questions doctrine. Basically, that's the idea that Congress doesn't, as Justice Scalia once said, hide elephants and mouse holes.

Speaker 5 If Congress wanted to give the president the power to do something, it would have said so.

Speaker 5 And so, you know, in the absence of clear information like that on questions that are really big and have to do with the economy.

Speaker 5 economy and other major social issues, the major questions doctrine should suggest that if it wasn't a clear direction of authority, then it shouldn't stand.

Speaker 5 And this Supreme Court has actually used that doctrine to throw out what President Biden wanted to do on student loan forgiveness and climate change.

Speaker 5 So the big question here is whether this Supreme Court will use that doctrine to limit President Trump's power on tariffs.

Speaker 4 Right. And along those lines, one of the arguments that the challengers made is: look at these other laws that the president has used or can use to tariff.
Those laws are much clearer.

Speaker 4 Congress in those laws has been clearer on saying, yeah, president can tariff in this case. But the challengers are saying in IEPA, the language is nowhere near as clear.

Speaker 3 You know, I am actually still thinking about something you said at the very beginning of our conversation, which is that the president is using a law that was written in the 1970s after President Richard Nixon in an effort to rein in presidential power.

Speaker 3 And now it is being used to to expand presidential power. And this is not the first time we've had a conversation about this very thing related to other laws that were written in that same period.

Speaker 3 Kerry, can you talk a little bit about how this case fits into the broader question about presidential power and how that came up during yesterday's oral arguments?

Speaker 5 Well, you two both cover the White House, and you've seen how President Trump and the people around him in the cabinet and elsewhere are trying to push executive power almost to the limit.

Speaker 5 And in large part, on the emergency or shadow docket, the Supreme Court has temporarily been agreeing with President Trump.

Speaker 5 It's allowed him to dismantle entire federal agencies, fire federal workers, and do a whole bunch of other things.

Speaker 5 This case, this tariffs case, is the first one the Supreme Court is considering in a big way.

Speaker 5 way with full briefing and full argument and going to make a final decisive ruling on sometime soon, or at least before the end of the term.

Speaker 5 And it should be seen as part of this push and pull over executive power.

Speaker 5 The Supreme Court, which is a six to three conservative supermajority at this point, has largely been very friendly to President Trump. The question is whether it will remain so now.

Speaker 5 Justice Neil Gorsuch raised some doubt about that. He had some skeptical questions.
Here's more of what he had to say at the argument yesterday.

Speaker 6 You emphasize that Congress can always take take back its powers. You mentioned that a couple of times.
But don't we have a serious retrieval problem here?

Speaker 6 Because once Congress delegates by a bare majority and the president signs it, and of course every president will sign a law that gives him more authority,

Speaker 6 Congress can't take that back without a supermajority. And even, you know, even then, it's going to be veto-proof.
What president's ever going to give that power back?

Speaker 6 Congress, as a practical matter, can't get this power back once it's handed it over to the president.

Speaker 6 It's a one-way ratchet toward the gradual but continual accretion of power in the executive branch and away from the people's elected representatives.

Speaker 5 And that's Gorsuch basically hitting the nail on the head here, signifying that once the power moves in the direction of the White House and the executive branch, it rarely then gets put back in the hands of Congress.

Speaker 5 And the court is going to have to decide one way or another on this particular issue where it sees that separation of powers.

Speaker 5 But we have a couple of additional major executive power cases coming up on the docket too this year.

Speaker 5 They involve Trump's effort to fire Lisa Cook, a member of the Federal Reserve, and they also involve the viability of a 90-year-old precedent on federal agency heads.

Speaker 4 Yeah, I mean, to kind of sum up what Carrie and I have said in the last few minutes about the effects of this ruling. Yes, this is a ruling about tariffs.

Speaker 4 Yes, this ruling would have some unknown effect on economic policy, depending on what the White House does. But this is not just a tariffs case.
This is very much a presidential power case.

Speaker 3 Danielle, we both cover the White House. President Trump has touted so many deals related to these tariffs.

Speaker 3 So is there an argument that the tariffs have actually already had the effect he was after globally?

Speaker 4 To some degree, yes. I mean, at least on the global stage, he has been able to use tariffs to do what he likes to do.
And what is that? It is deal making. He likes to make bilateral trade deals.

Speaker 4 He's been able to go to enemies and allies alike and neutral and everybody in between and to go up to them and say, look, our giant economic superpower is going to slap huge tariffs on all of your goods that come into our country unless you do what we want, unless you invest X amount in our country, unless you make some sort of a deal to buy XYZ from our country.

Speaker 4 Trump likes doing that, and so he's been able to do that. Now, this is in no way to say that these deals are good.
In fact, in a lot of cases, we don't even know what's in them.

Speaker 4 This is not to say that these deals will stick, but they've certainly let Trump do what he wants to do.

Speaker 3 Yeah, and I, you know, there are still questions about what this has done to America's power in the world, America's relationship with other countries. There are lots of questions about that.

Speaker 4 Absolutely.

Speaker 3 All right, we're going to leave it there for now. I'm Tamara Keith.
I cover the White House.

Speaker 5 I'm Carrie Johnson. I cover the Justice Department.

Speaker 4 And I'm Danielle Kurtzleben. I cover the White House.

Speaker 3 And thank you for listening to the NPR Politics Podcast.

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