Many New Tariffs Overturned on Appeal; SCOTUS Review Likely Next

In late August, a federal appeals court rejected the wide-ranging emergency tariffs implemented by the White House in April and August.  The administration has justified those proposed tariffs, which have imposed large import levies on goods from trade partners ranging from the EU to Syria to India, on the basis that trade deficits constitute a national emergency.  In several settings, the federal courts have disagreed with the administration's view of the laws.  It is expected that the tariff decision will be appealed to the Supreme Court.  Tariffs were allowed to stay in place at their current rate pending the appeal.  

WHY IT MATTERS

Congress has the constitutional power to levy tariffs, but has delegated certain emergency economic powers to the president to allow flexibility in resolving acute problems facing the country.  There is no clear indicator whether trade deficits, which have historically been something that ebbs and flows as a natural part of commerce, are an “emergency” that justifies allowing unilateral tariff action by the president under those delegated powers.  Questions exist as to both issues: whether trade deficits are an emergency, and whether the president is allowed to use tariffs in response to an emergency.  

If the Supreme Court allows the tariffs to stand, as a legitimate use of presidential authority in the face of an emergency, the issue will be resolved.  If the Supreme Court overturns the tariffs for any reason, the administration can always try to lobby Congress to give broader presidential authority via a new law that specifically addresses these issues.