A majority of U.S. Supreme Court justices expressed skepticism of the Trump Administration’s arguments that it had the right to impose broad tariffs without Congressional approval in oral arguments Wednesday, according to The Wall Street Journal. With Congress granted the exclusive right to impose taxes by the Constitution, justices were most skeptical of the argument by the administration that tariffs were not taxes.
The Supreme Court had agreed to an expedited schedule for two cases in which lower courts ruled that the President did not have the authority to impose tariffs under the International Emergency Economic Powers Act, which have had big impacts on game and toy companies with products manufactured in Asia (see “Court to Hear Arguments“). The oral arguments Wednesday could lead to a ruling at any point between now and the end of the Supreme Court term in June, although the fact that arguments were heard on an expedited schedule hopefully presage a quicker resolution.
If the Court rules that the Trump administration did not have the right to impose tariffs under the act, big questions will remain. The first is what happens to the $100+ billion collected from U.S. businesses through the tariffs. This is of critical importance to the game, toy, and merch companies that have paid punishing tariffs over the past months. It’s hard to see how the Court could decide that the President didn’t have the right to impose the tariffs and not require them to be refunded, but there’s a lot of questions on how that could take place.
The other question if the Supremes rule against the tariffs is what actions the administration might take to re-enact tariffs under different authorities, which it has indicated it will try to do. Those authorities, including under the Trade Act of 1974 are more limited, but do give the President a way to enact some tariffs using a different legal theory, according to The New York Times.
Whatever the resolution to those two big questions, the situation would be much improved by a ruling against the tariffs; let’s hope that’s quick and decisive.
Source: ICV2
