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Inside ICE Detention & Trump Tariffs at SCOTUS · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grosso from Bloomberg Radio.
0:08
Speaker 2: They're calling it Operation Midway Blitz. President Donald Trump has
0:13
Speaker 2: started his immigration cracked down in Chicago, with agents flooding
0:18
Speaker 2: the city as it becomes the latest flashpoint in a
0:21
Speaker 2: national struggle over how far the federal government can push
0:25
Speaker 2: local authorities in sanctuary cities to cooperate with its immigration agenda.
0:31
Speaker 2: Though the administration has said the operation will target the
0:35
Speaker 2: worst of the worst criminals who are not in the
0:37
Speaker 2: country legally, Illinois Governor J. B. Pritzker says the operation
0:42
Speaker 2: is making many law abiding immigrants, even those who are citizens, fearful.
0:47
Speaker 1: They're afraid to go shopping, They're afraid to take their
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Speaker 1: own children.
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Speaker 3: To school because they have mixed status households.
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Speaker 2: Immigration advocates say that ICE agents also appear to be
1:00
Speaker 2: stopping and arresting people on the street. So how will
1:03
Speaker 2: the Supreme Court's ruling this week that lifted the ban
1:07
Speaker 2: on ICE agents in LA stopping and detaining people solely
1:12
Speaker 2: based on their race, language, occupation, or location affect the
1:18
Speaker 2: ICE operations in Chicago. My guest is Laura Muokerjee, a
1:22
Speaker 2: professor at Columbia Law School, and director of the school's
1:26
Speaker 2: immigrants Rights clinic, Laura, how do you think the Supreme
1:29
Speaker 2: Court's ruling this week will affect these immigration stops?
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Speaker 4: The Supreme Court issued a devastating opinion on Monday. It's
1:41
Speaker 4: first worth noting that the full Court issued a decision
1:45
Speaker 4: that was only one paragraph long, and it was accompanied
1:49
Speaker 4: by a concurring opinion by Justice Kavanaugh and a dissenting
1:53
Speaker 4: opinion that was joined by this three liberal progressive justices,
1:59
Speaker 4: Justice Mayor, Justice Kagan, and Justice Jackson. And the question
2:05
Speaker 4: in the case is whether a federal district court's decision
2:10
Speaker 4: should stand. And the federal district court had found that
2:14
Speaker 4: raids were part of a pattern of conduct by the
2:18
Speaker 4: government that likely violated the Fourth Amendment. And the district
2:22
Speaker 4: court found that the government was stopping individuals based solely
2:26
Speaker 4: on four factors. They're apparent race or ethnicity, whether they
2:30
Speaker 4: spoke Spanish or English with an accent, the type of
2:34
Speaker 4: location where they were found, such as a car wash
2:37
Speaker 4: or a bus stop, and the type of job that
2:39
Speaker 4: they appeared to work at. And the district court found
2:43
Speaker 4: that these four factors, taken alone, that's not sufficient to
2:49
Speaker 4: satisfy the Fourth amendments requirement of reasonable suspicion, and the
2:55
Speaker 4: District Court enjoined the federal government immigration officers from using
2:59
Speaker 4: those four factors alone in carrying out immigration enforcement. The
3:04
Speaker 4: Executive brand then appealed that case to the Ninth Circuit,
3:09
Speaker 4: and the Ninth Circuit said, while the case is pending,
3:12
Speaker 4: we're going to let the lower court decision stand. And
3:16
Speaker 4: then the Executive Branch further appealed that to the US
3:20
Speaker 4: Supreme Court, and in monday's one paragraph decision, the Court said,
3:25
Speaker 4: we are vacating, we are ending the lower court decision.
3:31
Speaker 4: What this means in practice is that immigration officers, as
3:35
Speaker 4: well as other law enforcement officers now practically have an
3:40
Speaker 4: invitation to engage in racial profiling when they are carrying
3:44
Speaker 4: out stops. As the concurrence by Justice Kavanaugh suggests, race
3:49
Speaker 4: ethnicity can now be used as a factor in establishing
3:55
Speaker 4: reasonable suspicion about whether or not a person is in
3:58
Speaker 4: the United States illegally without documentation.
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Speaker 2: Justice Kavanaugh really downplayed what these stops are like, saying,
4:08
Speaker 2: you know, it's typically brief. You can go free after
4:11
Speaker 2: you show you're a citizen or that you're here illegally.
4:15
Speaker 2: Does that comport with reality.
4:17
Speaker 3: Justice.
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Speaker 4: Kavanagh's concurrence minimizes the violence that is used in these
4:23
Speaker 4: stops and minimizes the harm to individuals, families, and communities
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Speaker 4: from racial profiling. One of the plaintiffs in this very
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Speaker 4: case is Jason Gavidia, a Latino US citizen who was
4:38
Speaker 4: ordered to stop by masked agents and they asked him
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Speaker 4: questions then used violence against him, even though he had
4:47
Speaker 4: repeated at least three times that he's an American citizen.
4:52
Speaker 4: They took his phone, they pushed him up against the
4:55
Speaker 4: metal gated fence, They put his hands behind his back,
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Speaker 4: they twisted his arms, and they never gave him his
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Speaker 4: ID back. Another US citizen, Jorge Viramontes, was repeatedly questioned
5:09
Speaker 4: when he was at his place of work between June
5:12
Speaker 4: ninth and June nineteenth of this year. Every time he
5:15
Speaker 4: was asked if he was a US citizen, he had
5:18
Speaker 4: to show his ID. And the effect of this decision
5:23
Speaker 4: is that America has become a show me your papers
5:27
Speaker 4: country for the overwhelming majority of people of color. While
5:32
Speaker 4: this decision specifically focuses on people who are Latino in LA,
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Speaker 4: the implications of this decision invite racial profiling nationwide.
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Speaker 2: I said they were going to flood the zone. This
5:46
Speaker 2: gives them now the authority to go full speed ahead.
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Speaker 2: What does that mean for cities like Los Angeles and Chicago.
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Speaker 4: With the passage of the so called Big Beautiful Bill,
5:59
Speaker 4: there are now billions more dollars allocated to ICE and
6:04
Speaker 4: immigration enforcement and immigration detention. What this opens up is
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Speaker 4: the possibility for immigration officers and federal law enforcement officers
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Speaker 4: on the streets of many major cities in the United States. Now.
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Speaker 4: I hope we never get to that point, and we
6:25
Speaker 4: are seeing the people and elected officials of Chicago resisting
6:30
Speaker 4: there so that what happened in LA isn't replicated in Chicago.
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Speaker 4: And in terms of what happens next, it will be
6:39
Speaker 4: up to the American people and the extent to which
6:43
Speaker 4: we can resist the worst abuses of the executive brand.
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Speaker 2: So I know you represent some families that are in
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Speaker 2: ICED attention. How difficult is it to represent someone who's
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Speaker 2: being held by ICE?
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Speaker 4: It is extraordinarily difficult to represent people in ICE custody.
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Speaker 4: Right now, the youngest person I'm representing in ICE custody
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Speaker 4: is only two years old. Immigration detention centers are often
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Speaker 4: located in areas that are hard to access in geographically
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Speaker 4: remote areas of the country. For example, the Family Detention
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Speaker 4: Center in Dilley, Texas is more than an hour outside
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Speaker 4: of San Antonio, and it can be difficult to have
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Speaker 4: reliable access to your clients and to prepare court hearings. Increasingly,
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Speaker 4: immigration court hearings for asylum seekers who are detained or
7:41
Speaker 4: being scheduled on a very fast turnaround time because the
7:46
Speaker 4: administration is trying to push forward deportations as quickly as
7:51
Speaker 4: possible without sufficient time and sufficient due process for many
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Speaker 4: immigrants to prepare. It's also very difficult for many immigrants
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Speaker 4: to access counsel while they are in detention because it's
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Speaker 4: so much harder to contact a lawyer and get someone
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Speaker 4: to work with you while you're detained.
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Speaker 2: I mean, what's life like in an iced atention facility.
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Speaker 4: It's very difficult for many immigrants in immigration custody. Overwhelmingly,
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Speaker 4: immigration detention centers are overcrowded and unsanitary. Often people don't
8:31
Speaker 4: have access to high quality or sufficient food. At the
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Speaker 4: Family Detention Center in Dilly, children have submitted swarn testimony
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Speaker 4: to federal court explaining that there is not adequate clean
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Speaker 4: water putable water and that adults at times have pushed
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Speaker 4: children out of the way in an effort to get
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Speaker 4: access to the water. There are questions about the quality
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Speaker 4: of metaw care in immigration detention centers, and immigration detention
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Speaker 4: is simply not an appropriate place for children who are
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Speaker 4: seeking asylum. One of the cases I worked on the
9:14
Speaker 4: summer involved a six year old child with a leukemia
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Speaker 4: diagnosis who was arrested when he and his family showed
9:24
Speaker 4: up to their immigration court hearing in LA and then
9:29
Speaker 4: they were detained for over a month. During that time,
9:33
Speaker 4: I begged DHS to release the six year old boy
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Speaker 4: and his family, and it took filing a federal habeas petition,
9:42
Speaker 4: so a petition in federal court for DHS to realize
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Speaker 4: that this family should not be detained.
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Speaker 2: Aren't there special protections for children?
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Speaker 4: For decades, immigrant children has received protections under an agreement
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Speaker 4: a settlement agreed known as the Flora's Settlement Agreement, which
10:02
Speaker 4: requires the federal government to provide basic minimum protections for
10:08
Speaker 4: children in federal care, both in terms of conditions of
10:12
Speaker 4: custody and prioritizing children for release. Because nearly everyone recognizes
10:17
Speaker 4: that children shouldn't be in federal immigration custody federal detention
10:22
Speaker 4: centers for long periods of time. Very Unfortunately, the Trump
10:26
Speaker 4: administration has moved to terminate, meaning end, the protections in
10:32
Speaker 4: the Flora's Settlement Agreement, and if the Trump administration prevails
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Speaker 4: in court, children in federal immigration custody will be left
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Speaker 4: with virtually no means of protection.
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Speaker 2: As far as the asylum hearings themselves, are the standards
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Speaker 2: what they should be, or are they imposing tougher standards
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Speaker 2: for asylum?
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Speaker 4: Increasingly it's harder to win asylum in the US United States.
11:01
Speaker 4: In recent days, the Board of Immigration Appeals has issued
11:04
Speaker 4: multiple opinions that rescind protections for categories of asylum seekers,
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Speaker 4: such as asylum seekers who've been persecuted based on their
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Speaker 4: membership in a particular family or based on their gender
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Speaker 4: and nationality, for example, for survivors of domestic violence. In addition,
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Speaker 4: there have been myriad changes on the immigration judge bench.
11:29
Speaker 4: Since January of twenty twenty five. It appears that more
11:33
Speaker 4: than one hundred immigration judges has been fired, and the
11:37
Speaker 4: Trump administration is trying to replace those seasoned immigration judges
11:43
Speaker 4: with judges from the military jag officers who Instead of
11:48
Speaker 4: being trained for months, which has historically been the standard
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Speaker 4: for immigration judges, will receive two weeks of training before
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Speaker 4: dealing with cases on a daily basis where people's lives
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Speaker 4: are literally at risk. These are life or death decisions
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Speaker 4: for many of the individuals who appear before immigration court.
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Speaker 2: Laura, thanks so much for giving us a little bit
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Speaker 2: of an inside look at iced attention. That's Professor Laura
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Speaker 2: Mukherjee of Columbia Law School. Coming up next, the Supreme
12:20
Speaker 2: Court is taking on Trump's tariffs. This is bloomberg.
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Speaker 3: If you took away tariffs, we could end up being
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Speaker 3: a third world country.
12:30
Speaker 2: President Trump warned of dire consequences after the US Court
12:34
Speaker 2: of Appeals for the Federal Circuit ruled that he had
12:37
Speaker 2: exceeded his authority by invoking an emergency law to hit
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Speaker 2: nations across the globe with steep tariffs. The administration rushed
12:47
Speaker 2: to the Supreme Court to appeal, asking for a quick
12:51
Speaker 2: resolution concerning his signature economic policy.
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Speaker 3: If that ruling everyone against US, I guess would have
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Speaker 3: to give back hundreds of billions. We would have to
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Speaker 3: give trillions and trillions of dollars back to countries that
13:08
Speaker 3: have been ripping us off for the last thirty five years,
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Speaker 3: and I can't imagine it happening on a legal basis.
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Speaker 3: They have no legal basis whatsoever. But on a common
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Speaker 3: sense basis, it would destroy America.
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Speaker 2: The Supreme Court accommodated Trump, as the conservative majority has
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Speaker 2: in almost all of the emergency cases filed since January.
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Speaker 2: It's set a lightning fast timetable by the Court standards
13:35
Speaker 2: with arguments in November. The appeal will test the conservative
13:40
Speaker 2: controlled court. It will be the first time during Trump's
13:43
Speaker 2: second term that the justices will actually hear arguments, get
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Speaker 2: full briefings, and then weigh the underlying legal merits of
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Speaker 2: an administration policy. Joining me is David Townshend, a partner
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Speaker 2: in Dorsey and Whitney's international trade group. Dave, the Court
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Speaker 2: has set an unusually aggressive schedule for the court. When
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Speaker 2: do you think we'll get a decision?
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Speaker 1: Hard to know. The Supreme Court, you can move at
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Speaker 1: its own case. The schedule that was agreed to had
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Speaker 1: been proposed by the United States and its appeal from
14:21
Speaker 1: the Federal Circuit decision, and was not opposed and actually
14:25
Speaker 1: supported by the plaintiffs in the case. Who are US
14:28
Speaker 1: importers and alleged that the tariffs are unlawful in terms
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Speaker 1: of schedule. I suppose because they did establish expedited briefing.
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Speaker 1: We have the hearing in November. If the Supreme Court
14:41
Speaker 1: wanted to move very quickly, it could issue something before
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Speaker 1: the end of the year. It's also possible that this
14:46
Speaker 1: will go well into twenty twenty six before we actually
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Speaker 1: have an opinion.
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Speaker 2: The Federal Circuit ruled seven to four that AIPA, the
14:55
Speaker 2: International Emergency Economic Powers Act, doesn't authorize the these tariffs.
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Speaker 2: Explain how the Federal Circuit came to that conclusion.
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Speaker 1: Yeah, the Federal Circuit had said that the case is
15:09
Speaker 1: really a statutory interpretation case, at least in terms of
15:12
Speaker 1: the opinion issued by the Federal Circuit. Federal Circuit was
15:15
Speaker 1: looking at whether the International Emergency Economic Powers Actor AIPA
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Speaker 1: authorizes the teriffs that the Trump administration has imposed on
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Speaker 1: global sources, including for trade deficits as well as fentanyl
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Speaker 1: related tariffs under a EPA, and the Federal Circuit said
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Speaker 1: that it didn't think AEPA did authorize the teriffs that
15:39
Speaker 1: the Trump administration imposed and held them all awful. The
15:43
Speaker 1: Federal story it looked to a couple different sources to
15:45
Speaker 1: support its conclusion. There's quite a bit of discussion in
15:49
Speaker 1: the opinion about other areas of US trade law, areas
15:54
Speaker 1: where Congress had used words explicitly allowing the imposition or
15:59
Speaker 1: adjustment of tariffs or duties. When the Federal cirgut noted
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Speaker 1: that AEPA doesn't use the word duties or tariffs in
16:06
Speaker 1: it it allows the regulation of importation into the United States.
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Speaker 1: But in light of the absence of the words tariffs
16:15
Speaker 1: or duties, but all sergu found that they did not
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Speaker 1: think Congress intended that AEPA allowed the imposition of global
16:22
Speaker 1: tariffs in the way the Trump administration had done. They
16:25
Speaker 1: also pointed out that as a constitutional matter, the power
16:29
Speaker 1: to impose duties under Article one resides with Congress, and
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Speaker 1: they use that as a way to interpret AEPA as
16:38
Speaker 1: inconsistent with what the Trump administration had done. And they
16:42
Speaker 1: also noted that no prior president had used AIPA to
16:46
Speaker 1: impose tariffs.
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Speaker 2: So it sounds like the majority sort of took the
16:51
Speaker 2: safe route, the conservative route in their analysis, although there
16:57
Speaker 2: were dissenting judges.
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Speaker 1: Yeah, I mean, the federal circuit fractured seven to four.
17:03
Speaker 1: As you said, there were some of the judges on
17:05
Speaker 1: the Federal Circuit who said that ap but never allows tariffs.
17:09
Speaker 1: The majority opinion didn't quite go that far, and then
17:12
Speaker 1: the descent said that they do think AIPA is intended
17:16
Speaker 1: to allow the president to impose the kind of tarifs
17:19
Speaker 1: and adjust the tariffs in the way the Trump administration has.
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Speaker 1: I mean, I think that the majority opinion really sticks
17:26
Speaker 1: to this as a statutory interpretation question at its core,
17:30
Speaker 1: rather than looking to the constitutional issues such as a
17:34
Speaker 1: non delegation doctrine that decide the case.
17:37
Speaker 2: What's the key argument that the Trump administration is making here?
17:43
Speaker 2: Does it focus on that provision in AEPA that says
17:47
Speaker 2: that the president can regulate the importation of property to
17:51
Speaker 2: address an emergency?
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Speaker 1: Yeah? Right. The AYEPA text allows the president to take
17:57
Speaker 1: action to regulate the importation of items into the United States.
18:01
Speaker 1: And the Trump administration's core argument is that the power
18:05
Speaker 1: to regulate encompasses the power to impose taxes and duties
18:10
Speaker 1: such as they've done here. And as support for that,
18:13
Speaker 1: they note that the AEPA statute itself allows a variety
18:18
Speaker 1: of actions. It allows broad discretion to the president to
18:22
Speaker 1: prohibit importation of items into the United States. It allows
18:27
Speaker 1: the president to prohibit transactions with certain countries. There are
18:32
Speaker 1: certain persons in non US locations, and so if it
18:36
Speaker 1: allows the prohibition of transactions or the prohibition of imports,
18:41
Speaker 1: and also allows the regulation of imports, then, according to
18:45
Speaker 1: the Trump administration, follows that they can impose taxes or
18:48
Speaker 1: duties or something short of such prohibitions, including the terrorf
18:52
Speaker 1: regime that the Trump administration is currently administering under AEPA
18:57
Speaker 1: and using as a basis to negotiate trade agreements with
19:02
Speaker 1: other countries.
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Speaker 2: Of course, no one knows how the Supreme Court will rule,
19:07
Speaker 2: but Bloomberg Intelligence has determined there is a sixty percent
19:11
Speaker 2: chance that the justices will agree that the reciprocal tariffs
19:16
Speaker 2: are illegal because the trade deficit isn't an emergency. But
19:20
Speaker 2: we'll find that the fentanyl tariffs are lawful and reinstate them.
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Speaker 1: What do you think, Yeah, it's possible that the Supreme
19:29
Speaker 1: Court could do something like that, And certainly the ultimate
19:33
Speaker 1: outcome in terms of what the Supreme Court issues as
19:36
Speaker 1: any remedy should it find the IPA terrifs or unlawful,
19:40
Speaker 1: is wide open and difficult to predict. I think that
19:44
Speaker 1: the initial statutory question, does AEPA allow the imposition of
19:48
Speaker 1: tariffs is one question, and the Supreme Court could say
19:51
Speaker 1: something like, yes, we think APA can permit tariffs. And
19:56
Speaker 1: in fact, there's a lengthy discussion in the Federal Circuit
19:59
Speaker 1: opinion about a prior court case called Yoshida, where an
20:03
Speaker 1: appellate court had looked at exactly that issue under the
20:06
Speaker 1: APA predecessor statute called the Trading with the Enemy Act.
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Speaker 1: So there's the question, does APO out tariffs? They could
20:12
Speaker 1: answer that yes, it does, but they could also say
20:15
Speaker 1: something to the effect of the executive orders issued here
20:18
Speaker 1: in some manner go beyond what we think AYIPA was
20:21
Speaker 1: intended to permit, especially if the Supreme Court thinks that's
20:26
Speaker 1: wide open into discretionary and how the administration is adjusting
20:30
Speaker 1: the tariffs. I'm not sure I would say that I
20:32
Speaker 1: think that outcome is likely, but it does show you
20:35
Speaker 1: that there are various steps of the analysis that the
20:38
Speaker 1: Supreme Court could use to ultimately reach the outcoming conclusion
20:43
Speaker 1: in the case.
20:44
Speaker 2: No present before has tried to use AIPA to impose tariffs,
20:48
Speaker 2: but has the Court addressed anything similar in the past.
20:53
Speaker 1: Yeah, the Supreme Court has looked at AIPA before. For example,
20:57
Speaker 1: there was a prior case involved the Iranian hostages that
21:02
Speaker 1: were taken during the Iranian Revolution. The United States citizens
21:05
Speaker 1: who were held hostage in Iran, and the President had
21:10
Speaker 1: used AIPA as a basis to negotiate a process for
21:15
Speaker 1: the hostages to be released, but also for the resolution
21:18
Speaker 1: of claims against Iran that arose out of the revolution,
21:22
Speaker 1: where's people's property had been seized or taken. And so
21:26
Speaker 1: the Supreme Court was forced in that case to look
21:29
Speaker 1: at whether AEPA allowed the president to essentially nullify court
21:35
Speaker 1: cases that were ongoing and property that had been sees
21:38
Speaker 1: pursued to those court cases. And in that case, the
21:41
Speaker 1: Supreme Court said that AIPA is a broad grant of power.
21:47
Speaker 1: It is designed to allow the president to negotiate and
21:50
Speaker 1: thus would allow the president to freeze or exterminate claims
21:54
Speaker 1: in US courts relating to the Iranian Revolution. I mean,
21:58
Speaker 1: you know, whether that has a bearing on the issue
22:01
Speaker 1: before the Court now relating to tariffs and the Trump
22:04
Speaker 1: administration executive order is sort of unclear. It's it's not
22:08
Speaker 1: hard to distinguish between the situation the Supreme Court looked
22:12
Speaker 1: at there and the one before the Court today.
22:15
Speaker 2: Could the Major Questions doctrine come into play because that
22:19
Speaker 2: stopped Biden from his student loan program.
22:24
Speaker 1: The Federal Circuit said, yes, that the Major Questions doctrine
22:29
Speaker 1: is relevant here. They noted the vast what they called
22:33
Speaker 1: economics and political significance of the case, and the Federal
22:37
Speaker 1: Circuit found that countfuls for a narrower view of what
22:40
Speaker 1: Congress intended in enacting AEPA, especially given that the President
22:46
Speaker 1: had never previously used AIPA as a basis for the
22:50
Speaker 1: imposition of tariff. Whether that is the path that the
22:55
Speaker 1: Supreme Court ultimately uses to resolve the case very difficult
22:58
Speaker 1: to predict. And at the Federal turget it did not
23:02
Speaker 1: think the Major Questions doctrine prohibited the executive orders and
23:06
Speaker 1: the imposition of tariffs here, both the reciprocal and the
23:10
Speaker 1: fentanyl related tariffs. So you know, you can dig both sides.
23:14
Speaker 1: Whether the Supreme Court will be persuaded that that doctrine
23:19
Speaker 1: applies is unclear.
23:22
Speaker 2: Coming up next on the Bloomberg Law Show, I'll continue
23:25
Speaker 2: this conversation with Dave Townsend. How is all this uncertainty
23:29
Speaker 2: about the tariffs affecting companies? I'm June Grasso, and you're
23:34
Speaker 2: listening to Bloomberg.
23:38
Speaker 3: But some whack job put in a lawsuit. It went
23:42
Speaker 3: before a very liberal court, and the liberal court ruled
23:46
Speaker 3: who was eleven? They ruled seven to four, with one
23:51
Speaker 3: of the most liberal of them all voting in our favor.
23:53
Speaker 3: Because they're patriots. I think I give tremendous credit to
23:57
Speaker 3: that judge. And now it's going to the Supreme Court.
24:00
Speaker 3: We're going to be asking for early admittance. But some
24:04
Speaker 3: whack job put in a lawsuit. It went before a
24:08
Speaker 3: very liberal court, and the liberal court ruled was eleven.
24:13
Speaker 3: They've ruled seven to four, with one of the most
24:17
Speaker 3: liberal of them all voting in our favor because they're patriots.
24:20
Speaker 3: I think I give tremendous credit to that judge. And
24:24
Speaker 3: now it's going to the Supreme Court.
24:26
Speaker 2: The Supreme Court has agreed to take up an appeal
24:28
Speaker 2: from the Trump administration after lower courts found most of
24:32
Speaker 2: his tariffs illegal. The case involves two sets of import taxes,
24:37
Speaker 2: both of which Trump justified by declaring a national emergency.
24:42
Speaker 2: The challenged taxes include Trump's April second Liberation Day tariffs,
24:47
Speaker 2: which impose levies of ten to fifty percent on most
24:51
Speaker 2: US imports, depending on the country they come from, and
24:55
Speaker 2: also tariff's Trump imposed on Canada, Mexico, and China in
25:00
Speaker 2: the name of addressing fentanyl trafficking. The cases were brought
25:04
Speaker 2: by Democratic led states and a group of small businesses.
25:08
Speaker 2: The US Court of Appeals for the Federal Circuit ruled
25:12
Speaker 2: that Trump exceeded his authority by invoking an emergency law
25:17
Speaker 2: AIPA to hit nations across the globe with steep tariffs,
25:21
Speaker 2: upholding an earlier ruling by the Court of International Trade.
25:25
Speaker 2: I've been talking to Dave Townshend of Dorsey and Whitney. Dave,
25:29
Speaker 2: let's say that the Supreme Court rules against the tariffs
25:33
Speaker 2: across the board. I mean, what happens then the government
25:36
Speaker 2: has to refund money? How would it work?
25:39
Speaker 1: There are several different avenues of relief that could come
25:43
Speaker 1: out of the Supreme Court case here, and obviously we
25:46
Speaker 1: don't know until the Supreme Court actually rules on it.
25:50
Speaker 1: The Court of International Trade, the lower court at originally
25:53
Speaker 1: issued relief at the all importers that had said if
25:56
Speaker 1: it's illegal, as to the plaintiffs, that's the illegal as
25:59
Speaker 1: to all and if directed the government to cease collecting
26:02
Speaker 1: the reciprocal and sentinel related tariff under APA. The Federal
26:08
Speaker 1: Circuit stepped in and paused the effect of that part
26:11
Speaker 1: of this cit ruling, and in its August twenty ninth rolling,
26:15
Speaker 1: the Federal Circuit agreed largely with the Court of International
26:18
Speaker 1: Trade out of the outcome of the case, that is,
26:20
Speaker 1: the IPA terriffs were held unlawful, but it again stayed
26:24
Speaker 1: its decision and impact pending appeals at the Supreme Court.
26:29
Speaker 1: So that's just a long way of saying the original
26:33
Speaker 1: look at this from the Court of International Trades that
26:36
Speaker 1: the relief should apply to everybody, should apply to all importers.
26:40
Speaker 1: The Federal Circuit did note that this Court of International
26:43
Speaker 1: Trades failed to look at whether such a nationwide remedy
26:48
Speaker 1: was appropriate in light of a Supreme Court case recently issued.
26:52
Speaker 1: That case was dealing with birthright citizenship. So the Federal
26:57
Speaker 1: Circuit was saying to the Court of International Trade, you
27:00
Speaker 1: have to look at this intervening case to see whether
27:03
Speaker 1: it would be appropriate for a nationwide revenue. There are
27:08
Speaker 1: under trade other avenues for relief here for companies looking
27:12
Speaker 1: to recoup the revenue. One would be to bring their
27:14
Speaker 1: own court case. Another would be to pursue protests against
27:18
Speaker 1: the US Customs in due course as the import entries
27:22
Speaker 1: go through the normal process of review, liquidation, and finalization
27:26
Speaker 1: by US Customs. So we don't know. I mean, I
27:29
Speaker 1: think ultimately there could be an administrative process established here
27:34
Speaker 1: if there were a ruling against the United States that
27:37
Speaker 1: would allow importers to come back and prove they were
27:41
Speaker 1: owed money. It's also possible that there won't be a
27:43
Speaker 1: process and that companies will just be forced to go
27:46
Speaker 1: through the usual court or administrative processes.
27:49
Speaker 2: Does the Supreme Court consider on any level the difficult
27:53
Speaker 2: process of unwinding the tariffs?
27:57
Speaker 1: Yeah, I think the Supreme Court has in other circumstances
28:01
Speaker 1: that you know, it's concerned about accepting arguments in favor
28:08
Speaker 1: of plaintiffs that would cause a painful unwinding process for
28:12
Speaker 1: the US government. Whether that has much, if any of
28:16
Speaker 1: an impact here is hard to say. I think that
28:19
Speaker 1: you know, from my perspective as an attorney who who
28:23
Speaker 1: advises US importers and is familiar with the importation process,
28:29
Speaker 1: there is an automated process by which these AEPA teriffs
28:34
Speaker 1: are imposed, and that automated process creates the data the
28:39
Speaker 1: government needs to identify and refund the tariffs. So I'm
28:42
Speaker 1: not ultimately convinced that the process of refunding the tariffs
28:47
Speaker 1: would just be so hopelessly complicated that the government couldn't
28:49
Speaker 1: do it. And I'll just give you one example of
28:53
Speaker 1: why that is, the government in the ordinary course does
28:56
Speaker 1: not liquidate import entries for roughly ten months until the
28:59
Speaker 1: data endoration, and so you can go all the way
29:02
Speaker 1: back to import entries in April when the reciprocal tariffs
29:06
Speaker 1: are originally imposed, and those entries are not yet finalized
29:10
Speaker 1: by customs. So there is sort of a way for
29:14
Speaker 1: the government to easily track and then refund the duties
29:18
Speaker 1: if they had to, although the scale of it would
29:20
Speaker 1: be massive, obviously.
29:22
Speaker 2: And so as far as you know businesses or importers
29:25
Speaker 2: that you represent, what does this period of uncertainty until
29:29
Speaker 2: the Supreme Court rules, what does it do to them?
29:34
Speaker 1: In the meantime, everyone's paying the tariffs, and so I
29:39
Speaker 1: think companies are still trying to assess what the likelihood
29:45
Speaker 1: is that there could be refunds here I can tell
29:48
Speaker 1: you that companies, and we've seen this in the news
29:52
Speaker 1: and listeners have probably seen it in retail stores where
29:56
Speaker 1: prices have gone up in certain cases, or contracts have
30:00
Speaker 1: been revised in a way to permit companies to raise
30:04
Speaker 1: prices as a result of the tariffs, and all of
30:09
Speaker 1: that would all of a sudden be called into question
30:11
Speaker 1: if the Supreme Court ultimately ruled that the tariffs were illegal. Though,
30:17
Speaker 1: whether there would be a rollback or reductions of price
30:21
Speaker 1: as a result of the case and or because of
30:24
Speaker 1: refunds received by importers. I think that would be different
30:27
Speaker 1: potentially in different industries and in different market situations. But
30:32
Speaker 1: you know, I can tell you that there have already
30:34
Speaker 1: been adjustments, and so how quickly things would snap back
30:38
Speaker 1: that would be something that businesses would have to I
30:41
Speaker 1: think consider on a case by case basis.
30:43
Speaker 2: Is there anything else that businesses are considering in light
30:47
Speaker 2: of these tariffs.
30:49
Speaker 1: Well, I think the way the tariffs were imposed, companies
30:53
Speaker 1: could see them coming. They built up inventories in the
30:56
Speaker 1: first quarter of the year. Those inventories that most been
31:00
Speaker 1: drawn down in such a way that now they're having
31:03
Speaker 1: and have been recently having to make tough decisions on
31:07
Speaker 1: the pricing and whether they're passing on the terraffs. You know,
31:10
Speaker 1: in terms of looking forward, I think companies are balancing
31:16
Speaker 1: whether to wait and see whether the terrorifts are ultimately
31:21
Speaker 1: upheld or whether they just take the action they feel
31:26
Speaker 1: that it is appropriate.
31:27
Speaker 2: Now.
31:27
Speaker 1: I mean, I would say this about what the ultimate
31:31
Speaker 1: impact of the Supreme Court case is. If they were
31:34
Speaker 1: to find that the tariffs were unlawful and strike them down.
31:39
Speaker 1: The Trump administration isn't just going to give up. There
31:41
Speaker 1: will be a second, you know, a plan B so
31:44
Speaker 1: to speak, that probably is already prepared that would be
31:46
Speaker 1: imposed very quickly, is what I suspect. And so it's
31:50
Speaker 1: not as though if the Supreme Court issues are ruling
31:53
Speaker 1: against the United States, it's not as though the teriffts
31:55
Speaker 1: will just be gone. There will be something coming down
31:58
Speaker 1: the pipeline, probably fairly quickly to impose something similar.
32:04
Speaker 2: Yeah, Administration officials have basically downplayed the impact of the
32:08
Speaker 2: litigation and said that most of the terriffs can be
32:11
Speaker 2: imposed by other legal avenues. I mean, what would that
32:14
Speaker 2: be and why didn't they use it in the first place.
32:18
Speaker 1: I think the administration chose to use IEPA because it
32:21
Speaker 1: was they knew they could do it quickly and immediately,
32:24
Speaker 1: and they wanted to begin the process of negotiating trade
32:27
Speaker 1: agreements as fast as possible because it's a lengthy process
32:31
Speaker 1: to negotiate trade agreements. There are a variety of other
32:36
Speaker 1: legal authorities the administration could use if they needed to
32:40
Speaker 1: replace the IEPA TIFFs. I would expect a combination of
32:45
Speaker 1: authorities would be used. Something immediate that allows them to
32:48
Speaker 1: impose tariffs right away, coupled with some combination of Section
32:53
Speaker 1: two thirty two, which is national security related tariffs and
32:56
Speaker 1: three oh one, what's their teriffs to address on SAT
32:59
Speaker 1: trading practices like the kind of Trump administration imposed on
33:02
Speaker 1: China in twenty eighteen, And so they would be able
33:06
Speaker 1: to cobble together something that looks at least somewhat similar
33:09
Speaker 1: to the current regime in terms of the ultimate impact
33:13
Speaker 1: and the ultimate size of the tariffs.
33:15
Speaker 2: If these tariffs are upheld, how much of a victory
33:19
Speaker 2: would that be for Trump and how much would it
33:23
Speaker 2: bolster presidential power?
33:27
Speaker 1: It would be significant, no doubt, because what that would
33:30
Speaker 1: do in the most immediate terms, Obviously, the executive orders
33:35
Speaker 1: would remain the IPA teriffs would remain. I think the
33:37
Speaker 1: Trump administration would be likely to view that as a
33:40
Speaker 1: signal that they can use their AEPA authority to adjust
33:45
Speaker 1: up or down as they see fit the tariff rates
33:48
Speaker 1: for countries, and they would be emboldened to continue the
33:52
Speaker 1: course of potentially raising tariffs on countries that take actions
33:56
Speaker 1: they don't like and lowering them for countries that agree to,
34:00
Speaker 1: you know, whatever trade concessions they're hoping to get out
34:03
Speaker 1: of those countries. So I think that process would just
34:06
Speaker 1: continue and it would be fully legal looking forward.
34:10
Speaker 2: Thanks for joining me, Dave. That's David Townsend, a partner
34:13
Speaker 2: in Dorsey and Whitney's International Trade Group. And that's it
34:17
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