U.S. President Donald Trump\u2019s tariffs just cannot catch a break in court.<\/p>\n
Late Thursday, the U.S. Court of International Trade (CIT) struck down<\/a> Trump\u2019s latest stopgap measure, a 10 percent global tariff that he levied<\/a> earlier this year after the Supreme Court struck down<\/a> his prior go at it. Trump is now 0-5 in judicial rulings on his trade war.<\/p>\n U.S. President Donald Trump\u2019s tariffs just cannot catch a break in court.<\/p>\n Late Thursday, the U.S. Court of International Trade (CIT) struck down<\/a> Trump\u2019s latest stopgap measure, a 10 percent global tariff that he levied<\/a> earlier this year after the Supreme Court struck down<\/a> his prior go at it. Trump is now 0-5 in judicial rulings on his trade war.<\/p>\n The CIT\u2019s ruling does not mean that Trump\u2019s latest tariffs are dead; relief was just for the plaintiffs, and these duties on imports could last until July, when the Trump administration is expected to unveil a backup, backup plan<\/a> using a different section of the same half-century-old legislation.<\/p>\n But the court ruling\u2014like some of those that came before on tariffs, including the Supreme Court invalidation\u2014did raise some interesting and big questions. Such as: Can the president, contra the U.S. Constitution, unilaterally raise taxes for almost any reason whatsoever, let alone under a statute written in the late years of the Nixon administration to address a problem that no longer exists? The court majority thought not. <\/p>\n \u201cThis case turns on the meaning of Section 122 and whether the president asserted the existence of the conditions required by the statute in order to lawfully proclaim the import surcharges. As discussed further below, the President\u2019s Proclamation fails to assert that those required conditions have been satisfied,\u201d the majority ruled.<\/p>\n \u201cSuch an expansive reading of the statute would raise a non-delegation issue, which in turn would prompt a constitutional question,\u201d the court wrote, noting that when in doubt, any reading of a statute that does not violate the Constitution is to be preferred.<\/p>\n What was at stake in this particular case was that section<\/a> of the 1974 Trade Act, which Congress passed after then-President Richard Nixon went wild on tariffs to deal with a weak dollar and red numbers everywhere. For two decades prior, the United States had a \u201cbalance-of-payments\u201d problem in which foreigners were trading in their U.S. dollars for dwindling reserves of physical gold. (The United States was still functionally on the gold standard until 1971, meaning that each bill was backed by actual ore.) Section 122 of the 1974 Trade Act authorized the president to levy some tariffs, for a few months, to deal with the balance-of-payments problem.<\/p>\n But\u2014as a lot of smart people have noted<\/a>\u2014it is physically impossible to have a balance-of-payments problem when a country has a floating currency, as the United States and most countries do today. Nobody is raiding Fort Knox and carting off gold. The dollar just goes up, or more usually down<\/a>.<\/p>\n But there are also some very smart economists who argue<\/a> that the United States does have a problem with balancing its accounts, whether that is the trade deficit<\/a>, or national debt<\/a>, or the annual fiscal deficit<\/a>. So maybe \u201cbalance of payments\u201d is a broad term that can apply to economic malaise more generally.<\/p>\n That is exactly what the Trump administration\u2019s lawyers argued in court.\u00a0<\/p>\n \u201c[T]he Government seeks to defend the proclamation by arguing that \u2018balance-of-payments deficits\u2019 is a malleable phrase,\u201d the court wrote, before arguing exhaustively that it is in fact a brittle and well-defined phrase that Congress was well aware of it when it wrote the bill.\u00a0<\/p>\n The majority cited the legislative history of the 1974 Trade Act to show that Congress meant specific things, none of which Trump pointed to in imposing his emergency tariffs. However, the dissenting judge noted that this argument would carry more weight if those distinctions had actually made it into the final legislation, rather than being stripped out as unnecessarily restrictive on the president\u2019s authority.<\/p>\n