Law Professors Say Trump Tariff Actions May Survive Court Challenges

If a reelected President Donald Trump uses the existing Section 301 tariffs program to hike tariffs on all Chinese goods by at least 60%, that's likely to survive a court challenge, said two law professors who spoke during a Washington International Trade Association webinar on the executive branch's ability to make deals and impose trade restrictions without congressional say-so.

Georgetown Law professor Kathleen Claussen and Duke University business law professor Timothy Meyer co-authored a journal article on the topic that served as the basis of the conversation.

Meyer, who represented the American Institute for International Steel in a case that unsuccessfully argued that Section 232 was an overbroad delegation of authority to the president, noted that the Court of International Trade already upheld the U.S. trade representative's authority to expand Section 301 tariffs past the original list that was tailored to the size of the damage Chinese policies had wrought. In that ruling, he said, it more or less "gave the administration a road map for how it would have to write the ... administrative record in order to justify the modification."

Meyer noted that a consolidated case against lists 3 and 4a, led by HMTX Industries (see 2307180069) is now before the U.S. Court of Appeals for the Federal Circuit, and those judges will consider whether USTR's actions violated the "major questions doctrine."

The U.S. Supreme Court has written that when agencies make decisions that have major national significance, those actions must be supported by clear congressional authorization.

"So maybe we'll get a different answer," Meyer said. But, he added, given recent circuit court rulings, and given that Section 301 has explicit modification language in it, he said, "I wouldn't think HMTX is likely to produce a dramatically different answer from prior cases."

Claussen, tackling whether courts would challenge a Trump move to impose either 10% or 20% tariffs on all imports, said it seems that he would be most likely to use the International Emergency Economic Powers Act, the same statute he would use to impose tariffs on Mexican imports in order to compel Mexico's government to control migration.

Claussen said President Richard Nixon used IEEPA's predecessor, the Trading With the Enemy Act, to impose 10% tariffs on all imports, though those tariffs lasted only a few months.

The action was challenged in the U.S. Court of Customs and Patent Appeals, which no longer exists, and it ruled in his favor.

However, Claussen said, the fact that administrative law has changed substantially since the early ’70s might influence a contemporary court challenge. She also noted that those who oppose a global tariff might challenge the underlying national emergency -- questioning whether imports from close allies like Canada, Germany or Japan are the foundation for an economic emergency, for instance.

Even if a case focuses on the tariffs themselves rather than questioning the emergency, Claussen said it's possible it could succeed, both given how much has changed in administrative law over the decades, or depending on how broad the tariffs are. "We see some judges, both at the federal circuit and in the Court of International Trade, wary about this expansive use of those sorts of statutes," she said.

Meyer said both Trump and President Joe Biden have used the argument that defending "economic security" is part of the executive's broad powers when it comes to foreign affairs. He said: "The phenomenon we’re describing is an effort to blur the boundaries between foreign policy and ordinary regulation of commerce."

Meyer said that while "the courts have not expressly agreed with the most expansive parts of the government’s argument," they have ended up "upholding the government's action in almost all of these cases."

Meyer and Claussen don't think this expansion of executive authority and diminishment of Congress' voice in approving trade liberalization and restrictions is a positive one.

In their journal article, they suggest Congress make three laws to curtail it:

• First, sunset any tariffs, quotas or import bans under sections 232 and 301 or IEEPA after either 90 or 180 days. Congress would be required to vote for the tariffs for them to continue. That is similar to bills that stalled in Congress during the Trump administration, though more tackled Section 232 than Section 301.
• Second, explicitly prohibit any trade agreement that affects how goods or services are imported, exported or regulated unless Congress approves the agreement. The Taiwan trade initiative (see 2307190042) was a step in that direction, but applied only to Taiwan negotiations.
• Third, eliminate appeal of CIT cases being done exclusively either at the Federal Circuit, or through direct appeal to the Supreme Court, and go through the D.C. Circuit. They say the Federal Circuit assignment process has not been random, and the judges who have repeatedly been chosen have been too deferential to the executive.

"We acknowledge the challenges Congress would face in passing these proposals, especially in imposing new statutory limits on the executive branch’s agreement and tariff authorities. Although members of Congress want to regain control over foreign commerce, they also support (or at least do not wish to publicly oppose) many of the uses to which the executive branch has put its broad authority, such as an aggressive stance toward China or protecting American workers," they wrote in the journal article.