On February 20 the Supreme Court ruled that many of President Trump’s tariffs, especially the ones made with the International Emergency Economic Powers Act (IEEPA), were unconstitutional. The statute does not authorize the use of tariffs. Not only that the ruling emphasized, the president does not have authority to tax. Instead, the ruling points out that the power to tax, including the imposing tariffs, is instead up to Congress.
Trump has acted undeterred, however, instead turning to another legal authority: Section 122 of the Trade Act of 1974. This act allows temporary across-the-board tariffs when the United States has “large and serious balance-of-payments deficits.” Just a couple hours after the court’s decision, Trump announced across-the-board tariffs of 10 percent; however, he soon boosted those to 15 percent—which is as high as they can go under this legislation. Due to the act’s restrictions, these tariffs expire after 150 days unless extended by Congress.
There has been much contention over whether Section 122 actually allows tariffs to be imposed the way Trump is imposing them now. One of the largest parts of this is how the act states tariffs can be added “to prevent an imminent and significant depreciation of the dollar in foreign exchange markets.” While it’s true the dollar has depreciated by around 9 percent since Trump took office, this is not an unusual fluctuation over a year in the floating-rate era. Plus, the main causes of the decline are Trump’s erratic tariff policies themselves and his cuts to interest rates, not any actual weakness in the U.S.’s financing ability.
Trump’s switch after his interpretation of IEEPA was overruled to a niche and inapplicable trade authority will surely cause further legal challenges. Some are left wondering if these tariffs will be overturned as well; however, it’s more likely that they expire before the Supreme Court actually makes a ruling. This has left some wondering, what other trade authorities might Trump invoke next?
