In a clear and decisive opinion, the CIT has struck down as unlawful the tariffs imposed by President Trump under the International Emergency Economic Powers Act (IEEPA) (i) worldwide to “retaliate” for purported balance of trade reasons against alleged trade barriers imposed by other states, and (ii) on Canada, Mexico, and China to address trafficking by cartels and in fentanyl. This decision will surely be appealed.
As to the retaliatory tariffs, the CIT uses the non-delegation doctrine and the major questions doctrine (a 2018 Supreme Court innovation limiting executive power) as tools of interpretation of section 1702 of IEEPA. The non-delegation doctrine requires an “intelligible principle,” and the major questions doctrine requires that Congress speak clearly to delegate authority on major issues. Using these tools of interpretation, the CIT finds that the President’s authority to “regulate commerce” under section 1702 of IEEPA must be limited. On this basis, it distinguishes the 1974 Yoshida case (526 F2d 560), which upheld Nixon’s balance of payments tariffs imposed under the Trading with the Enemy Act (TWEA), on the basis that the claim of authority there was expressly limited: “quite different from imposing whatever tariff rates he deems desirable” (Yoshida, p. 578). Furthermore, Congress intended with IEEPA to provide reduced authority in relation to the statute at issue in Yoshida, the TWEA. Finally, Congress legislated section 122 of the Trade Act of 1974 to give specific limited authority to address balance of payments problems, subject to a 15% cap and a 150 day limit, removing these issues from IEEPA. The latter could provide a roadmap for the Trump administration to reimpose these tariffs subject to these limits.
With respect to the trafficking tariffs, the CIT finds that these do not comply with section 1701 of IEEPA, which allows only measures that “deal with” the purported “unusual and extraordinary threat.” First, the CIT finds that this question is not a non-justiciable political question because the interpretation of these terms is judicially manageable. Second, it finds that “deal with” requires a closer link of “reasonable relation” between the measure and the threat (also relying on Yoshida precedent). Here, the government is simply seeking leverage over Canada, Mexico and China, and this is not a sufficiently direct link.
The CIT has reaffirmed the rule of law in this context, by asserting the authority of the judiciary to review the President’s actions under the applicable constitutional and statutory law. More specifically, it has acted to protect Congress’ constitutional powers from an unprecedented encroachment. It adds to the large body of judicial decisions holding in immigration and other contexts that the President has exceeded his powers. In this particular case, the CIT cites legislative history in which legislators are aware of the Schmittean concept that the power to determine the exception—here for purported national security reasons—is the power to rule. Those legislators sought to constrain that power, and the CIT is best understood here as carrying out this fundamental anti-authoritarian statutory intent. The alternative construction would be to hold that Congress has no power to delegate with effective conditions on the exercise of delegated authority, in stark contradiction of the requirements of the non-delegation doctrine.
