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SCOTUS Dubious About Trump Tariffs · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grosseo from Bloomberg Radio.
0:08
Speaker 2: It's one of the most important cases of the term,
0:11
Speaker 2: a test of presidential power where President Trump's signature economic
0:16
Speaker 2: policy is at stake. After nearly three hours of oral arguments,
0:21
Speaker 2: it appears that a majority of Supreme Court justices across
0:25
Speaker 2: the ideological spectrum are skeptical that Trump has the legal
0:29
Speaker 2: authority to impose billions of dollars of tariffs on goods
0:34
Speaker 2: from nearly every country. Chief Justice John Roberts and Justice
0:38
Speaker 2: Sonya Sotomayor said, the tariffs are taxes, and the Constitution
0:43
Speaker 2: gives taxing power to Congress.
0:46
Speaker 3: It's a congressional power, not a presidential power to tax.
0:50
Speaker 3: And you want to say tarifts are not taxes, but
0:52
Speaker 3: that's exactly what they are, degenerating money from American citizens revenue.
0:58
Speaker 4: The vehicle is in position of taxes on Americans, and
1:03
Speaker 4: that has always been the core power of Congress.
1:06
Speaker 2: Trump is arguing that an emergency powers law, the International
1:10
Speaker 2: Emergency Economic Powers Act, or AIPA, authorizes him to collect
1:14
Speaker 2: tens of billions of dollars in tariffs a month. AIPA
1:18
Speaker 2: gives the president an array of tools to address national security,
1:22
Speaker 2: foreign policy, and economic emergencies. But it doesn't mention tariffs,
1:28
Speaker 2: something many of the justices work quick to point out.
1:32
Speaker 2: Here are the Chief Justice and Justice Katanji Brown Jackson.
1:36
Speaker 5: But when I read the statute, it is telling the
1:39
Speaker 5: president exactly what he can do investigate, block during the
1:43
Speaker 5: pendency of an investigation, regulate, direct, and compel, mullify, void,
1:48
Speaker 5: prevent or prohibit. And I guess what is a little
1:51
Speaker 5: concerning to me is that your argument suggests that we
1:55
Speaker 5: should see the word imposed, the phrase impose tariffs in
1:59
Speaker 5: that se series of things that the president could do.
2:02
Speaker 5: We don't see that word.
2:04
Speaker 4: Well, but the exercise of the power is to impose tariffs, right,
2:09
Speaker 4: and the statute doesn't use the word tariffs.
2:11
Speaker 2: And Justice Neil gorse At, a Trump appointee, expressed alarm
2:16
Speaker 2: at giving seemingly limitless power to presidents.
2:20
Speaker 6: So Congress is a practical matter. Can't get this power
2:23
Speaker 6: back once it's handed it over to the President's a
2:25
Speaker 6: one way ratchet towards the gradual but continual accretion of
2:30
Speaker 6: power in the executive branch and away from the people's
2:33
Speaker 6: elected representative.
2:35
Speaker 2: My guest is constitutional law expert Michael Dorff, a professor
2:38
Speaker 2: at Cornell Law School. Mike, give me your broad take
2:41
Speaker 2: on the oral arguments.
2:43
Speaker 7: It was difficult to handicap.
2:45
Speaker 1: It's clear to me that the three Democratic appointees are
2:48
Speaker 1: going to vote to a firm and rule for the plaintiffs.
2:51
Speaker 1: Justice Thomas and almost certainly Justice Alito are going to
2:55
Speaker 1: rule for the government. I think Justice Kavanaugh pretty strongly
2:59
Speaker 1: leans towards the government, and then the Chief Justice and
3:03
Speaker 1: Justices Gorosach and Barrett are harder to handicap because Gorisiach
3:07
Speaker 1: and Barrett especially asked difficult questions of each side, and
3:11
Speaker 1: I kind of have a theory of what each one
3:13
Speaker 1: of them is thinking, but it's it's very difficult to say.
3:17
Speaker 1: So I come out of this really quite uncertain as
3:19
Speaker 1: to what they're going to do.
3:21
Speaker 2: So a good deal of the argument consisted of an
3:24
Speaker 2: analysis of the text of AIPA. Several justices quizzed the
3:30
Speaker 2: Solicitor General on the text not mentioning tariffs. How do
3:34
Speaker 2: you think the Solicitor General handled that?
3:37
Speaker 1: Yeah, I thought He's stuck with his core argument, which
3:41
Speaker 1: has a number of moving pieces. The first is that
3:44
Speaker 1: the term regulate importation can include tariffs just as a
3:50
Speaker 1: matter of ordinary language.
3:52
Speaker 7: That's certainly true.
3:53
Speaker 1: He also relied on historical understandings dating back to the
3:58
Speaker 1: founding for some reason to think that that's how the
4:02
Speaker 1: word was understood. And he has a couple of modern cases.
4:06
Speaker 1: He's got the Nixon president under the Trading with the
4:09
Speaker 1: Enemy Act, and he's got another related case. I thought
4:14
Speaker 1: he had the hardest time dealing with what is really
4:18
Speaker 1: the plaintiff's best argument, and that is that when Congress
4:23
Speaker 1: has wanted to give the president tariff authority, it has
4:28
Speaker 1: said so expressly in lots of other statutes, and so
4:33
Speaker 1: the omission in this statute does seem to be rather glaring.
4:37
Speaker 1: So I thought he did a perfectly fine job basically
4:43
Speaker 1: rehashing what was in his brief.
4:46
Speaker 2: It seemed to me like some of the justices weren't
4:49
Speaker 2: satisfied with Sour's answers, particularly Justice Amy Coney Barrett. You know,
4:56
Speaker 2: she kept pressing him and just a soda mayor said
4:59
Speaker 2: answer the question.
5:01
Speaker 7: Yeah.
5:01
Speaker 1: So that was an important exchange, and I thought that
5:05
Speaker 1: Justice Barrett wasn't being quite fair to his argument, right,
5:08
Speaker 1: which was he said not only that did Nixon impose this,
5:11
Speaker 1: but a Court of Appeals found that Nixon had the authority.
5:16
Speaker 1: It's true of the Supreme Court denied assert and then
5:18
Speaker 1: Justice Barrett said, well, it's just an intermediate court of appeals. Well,
5:21
Speaker 1: that's true, But his argument is not that that ruling
5:26
Speaker 1: is binding on the Supreme Court. His argument is that
5:29
Speaker 1: when Congress copied the language from the Trading with the
5:32
Speaker 1: Enemy Act into the International Economic Emergency's Powers Act, it
5:39
Speaker 1: was aware that President Nixon had used this for tariff
5:42
Speaker 1: authority and that that had been affirmed, and so we
5:45
Speaker 1: should attribute to Congress an intention to carry over the
5:49
Speaker 1: meaning that had recently been on display.
5:53
Speaker 7: That's not a bad argument.
5:54
Speaker 1: My own view is that it should fail because even
5:58
Speaker 1: a good textualist care about how Congress has used the
6:02
Speaker 1: terms elsewhere, but just sort of standing on its own.
6:06
Speaker 1: I thought his reliance on the Nixon president was pretty sensible.
6:12
Speaker 2: Justice Neil Gorsuch question the Solicitor General for something like
6:16
Speaker 2: ten minutes. Some of the questioning seemed a little bit hostile.
6:20
Speaker 2: He questioned him about the extent of the authority Trump
6:23
Speaker 2: is claiming, saying, well, then can Congress just say we're
6:26
Speaker 2: tired of legislating or hand it off even the power
6:30
Speaker 2: to declare war to the president. I mean, he seemed
6:33
Speaker 2: more aggressive than most of the other justices in questioning
6:36
Speaker 2: the Solicitor General.
6:38
Speaker 1: Yeah, I think that's right, and I think it lines
6:40
Speaker 1: up with Justice Garsuch's priors, which are very suspicious of
6:45
Speaker 1: broad delegations to the executive branch. He actually got a
6:49
Speaker 1: concession out of the Solicitor General. The SG sort of
6:54
Speaker 1: began by saying that neither the non delegation.
6:58
Speaker 7: Doctrine nor the Major.
7:00
Speaker 1: Questions doctrine applies with respect to the president's foreign affairs.
7:05
Speaker 7: Power, and pressing him.
7:07
Speaker 1: Justice Grocich got him to back off of that when
7:10
Speaker 1: he said, well, what if Congress just gave the president
7:14
Speaker 1: all of its power to regulate foreign commerce, you know,
7:17
Speaker 1: do whatever you want. We're sick of it all of
7:20
Speaker 1: its power more generally, you know, could he do anything
7:22
Speaker 1: at all in international affairs? And soer basically said, well, no,
7:25
Speaker 1: that would be different in so of coursious.
7:27
Speaker 7: How could it be different? You said that it doesn't
7:28
Speaker 7: apply at all in.
7:29
Speaker 1: Foreign affairs, And so then I thought Justice Garsuch did
7:32
Speaker 1: a nice job of saying, So, what you're saying is
7:33
Speaker 1: it applies more deferentially. But the intelligible principal test, which
7:38
Speaker 1: Justice Gorsuch doesn't like, is already very deferential. You're going
7:43
Speaker 1: to say it's even more deferential than that. So based
7:46
Speaker 1: on that exchange, I initially had Justice Garsage in the
7:51
Speaker 1: sort of plaintiff's column, but then on the other side
7:55
Speaker 1: he was pressing Neil Kattil very hard on us. The text, right,
8:01
Speaker 1: So if you just look at the text, it does
8:03
Speaker 1: seem to encompass tariff authority. And there in the same
8:08
Speaker 1: way that I thought it was interesting that the SG
8:10
Speaker 1: backed off a little bit. I thought Katyo would have
8:13
Speaker 1: been better served if he had backed off a little
8:16
Speaker 1: bit and just simply said, yeah, you're right, if you
8:18
Speaker 1: look at the text in isolation, it does encompass this power.
8:22
Speaker 1: But that's never how the discourt looks at datutory text,
8:25
Speaker 1: and it shouldn't in this case.
8:27
Speaker 2: Well, let me ask you this, as some of the
8:28
Speaker 2: justices porning out Congress knew how to write the word tariff.
8:32
Speaker 2: They wanted tariffs to be included in all these other powers,
8:35
Speaker 2: why not just put it there?
8:36
Speaker 7: Right?
8:36
Speaker 1: I think that is sort of the core common sense
8:39
Speaker 1: argument that the plaintiffs have, and it's a very good one,
8:41
Speaker 1: and I thought it was going to prevail. That. What
8:43
Speaker 1: leads me to be a little less certain about that
8:46
Speaker 1: is the turn the argument took near the end of
8:50
Speaker 1: Katyo's presentation, when a combination of Justice Barrett and some
8:55
Speaker 1: of her colleagues pressed on what she said she wasn't
8:59
Speaker 1: calling but really was calling a greater includes the lesser power, right,
9:04
Speaker 1: which is, well, look, Congress clearly gave the president the
9:07
Speaker 1: power to ban all trade with any and all foreign countries,
9:11
Speaker 1: because that's the plain meaning of some of the terms
9:14
Speaker 1: that are in the statute, and that's an enormous delegation.
9:17
Speaker 1: If Congress did that, why would Congress want to deny
9:21
Speaker 1: to the president the much lesser power to just say, well,
9:24
Speaker 1: you can have trade with us, but it's going to
9:26
Speaker 1: be subject to some tariff and that Therefore, maybe Congress
9:30
Speaker 1: didn't mean to exclude tariffs. Maybe they just thought it
9:33
Speaker 1: was encompassed within the term regulate. So that's what gave
9:36
Speaker 1: me some pause, because that's also not a crazy argument.
9:39
Speaker 1: I do think, and I'm going to put this on
9:41
Speaker 1: my blog tomorrow, that the way out of that, at
9:45
Speaker 1: least for Justice Gorsuch, may be that in so far
9:49
Speaker 1: as this law seems to give the president the power
9:52
Speaker 1: to declare an emergency whenever he wants and then to
9:56
Speaker 1: ban all foreign trade or to do some subset of it.
10:01
Speaker 1: That's a violation of the non delegation doctrine. And therefore
10:04
Speaker 1: you can't read the statute that broadly, and we can
10:06
Speaker 1: deal with a ban on all trade when that comes up,
10:09
Speaker 1: or you can say the president's declaration of an emergency
10:13
Speaker 1: is subject to some substantial review by the Supreme Court.
10:17
Speaker 1: There was a point earlier here in the argument when
10:19
Speaker 1: Justice Kagan was saying, we're going to review only very deferentially,
10:23
Speaker 1: the president's decision that there's an emergency.
10:25
Speaker 7: But you know, I mean, let's be frank here, there
10:29
Speaker 7: is no emergency. At one point sour said, well, you know,
10:32
Speaker 7: there's an existential threat, and it's not clear what he
10:35
Speaker 7: was talking about. Then he said, well, fentanyl is an
10:36
Speaker 7: existential threat. Well, even if fentyl is an existential threat,
10:39
Speaker 7: and of course it is to people who are at
10:41
Speaker 7: risk of overdosing on.
10:42
Speaker 1: It, there's no indication whatsoever that that was a legitimate
10:46
Speaker 1: justification for the tariffs on Canada, which is one of
10:50
Speaker 1: the reasons why it was invoked. You know, we get
10:51
Speaker 1: less than one percent of fentanyl from Canada, and you
10:54
Speaker 1: know Soalar also pointed to the fact that when President
10:57
Speaker 1: Trump was recently in Asia, he in Jijenping agreed to
11:01
Speaker 1: some reduction in Chinese precursor chemicals coming over for feednyl.
11:06
Speaker 7: You know, that's not.
11:07
Speaker 1: A trade agreement, it was an agreement to discuss. So
11:10
Speaker 1: there's all of this stuff in the background that seems
11:14
Speaker 1: kind of detached from reality, and that the background as
11:17
Speaker 1: well the president's you know, conducting foreign policy. The president
11:20
Speaker 1: is you know, just imposing tariff's willy nilly because he
11:24
Speaker 1: doesn't like, you know, some commercial that was run by
11:27
Speaker 1: the government of Ontario, because he doesn't like that Brazil
11:31
Speaker 1: is enforcing the law against Bolsonaro, whom he sees as
11:33
Speaker 1: a kindred spirit. The notion that this president is exercising
11:38
Speaker 1: this power in any way that remotely relates to legitimate
11:42
Speaker 1: emergencies is just fanciful. And to me, the question is like,
11:46
Speaker 1: will that break through at all or are they going
11:49
Speaker 1: to do what they did in the immunity case and
11:53
Speaker 1: pretend that Trump is a normal president.
11:55
Speaker 2: Coming up next, I'll continue this conversation with Cornell Law
11:58
Speaker 2: professor Michael, or what about the major questions doctrine that
12:03
Speaker 2: the Court used to block many of President Joe Biden's initiatives.
12:07
Speaker 2: This is bloomberg. It's the biggest legal test yet of
12:10
Speaker 2: President Donald Trump's economic agenda, and a majority of Supreme
12:15
Speaker 2: Court justices signaled some skepticism today about his power to
12:20
Speaker 2: unilaterally impose sweeping tariffs. Trump says his tariffs are authorized
12:25
Speaker 2: under the nineteen seventy seven International Emergency Economic Powers Act,
12:30
Speaker 2: which gives him broad authority to set and change import
12:34
Speaker 2: duties in an emergency. But Justice Elena Kagan questioned the
12:39
Speaker 2: Solicitor General John Sower about the declared emergencies, referring to
12:44
Speaker 2: the many cases the administration has brought to the Court
12:48
Speaker 2: on an emergency basis since Trump took office.
12:51
Speaker 5: And you know, we've had cases recently which deals with
12:55
Speaker 5: the president's emergency powers. And it turns out we're in
12:57
Speaker 5: emergencies everything all the time, about half the world. Well,
13:01
Speaker 5: this particular emergency is particularly existential, as Executive Order fourteen
13:05
Speaker 5: two five seven says, And of course no one disputes
13:07
Speaker 5: the existential nature of the federal crisis.
13:09
Speaker 2: I've been talking to Cornell Law School Professor Michael Darf, So,
13:13
Speaker 2: let's talk about the Major Questions doctrine, which came up
13:17
Speaker 2: over and over, and at one point Justice Gorsuch told
13:20
Speaker 2: Neil Katiau, the attorney for the small businesses, I don't
13:24
Speaker 2: think you can win without it. And Chief Justice John
13:28
Speaker 2: Roberts indicated that he saw the case as being governed
13:32
Speaker 2: by the Major Questions doctrine.
13:35
Speaker 7: Yeah.
13:35
Speaker 1: So the Major Questions doctrine originates in some cases a
13:39
Speaker 1: couple of decades ago, but it really took its current
13:42
Speaker 1: shape in a case from a few years ago called
13:44
Speaker 1: West Virginia against EPA. And the basic idea is that
13:49
Speaker 1: if you've got a statute that the federal executive brand
13:54
Speaker 1: or the president claims gives them the power to regulate
14:00
Speaker 1: some gigantic area, like a big portion of the economy
14:04
Speaker 1: or which is clearly going on here, then the president
14:09
Speaker 1: needs to point to specific authorization for what he's doing
14:14
Speaker 1: in the statute. It's a way of reading the statute
14:18
Speaker 1: to say, we're not going to presume that Congress delegated
14:23
Speaker 1: enormous power to the president unless Congress did so clearly.
14:27
Speaker 7: So, in lawyers.
14:29
Speaker 1: Speak, the Major Questions doctrine can be understood as a
14:31
Speaker 1: kind of clear statement rule.
14:34
Speaker 7: So that's the background.
14:35
Speaker 1: Now there's a there's a kind of technical debate between
14:40
Speaker 1: different justices about what exactly the major questions doctrine is.
14:45
Speaker 1: So Justice Barrett has said that she thinks it is
14:49
Speaker 1: simply an interpretive canon. That is to say, it's out there.
14:52
Speaker 1: It's a way of us figuring out what Congress actually
14:56
Speaker 1: intended in this statute, because you know, Congress statutes where
15:01
Speaker 1: they have, you know, meant to give all this power
15:04
Speaker 1: without saying explicitly. So it relates back to something Justice
15:09
Speaker 1: Scalia said in a much earlier case, which is, Congress
15:12
Speaker 1: doesn't hide elephants in mouseholes, right, just a basic idea
15:16
Speaker 1: of how you get at what Congress intended. That's one
15:19
Speaker 1: view of the major questions doctrine. Another view of the
15:22
Speaker 1: Major Questions doctrine is that it is a kind of
15:25
Speaker 1: subconstitutional way of implementing the non delegation doctrine, the notion
15:32
Speaker 1: that Congress can't give away its lawmaking power. It's got
15:36
Speaker 1: to provide an intelligible principle. And so if there's some
15:39
Speaker 1: very you know, monumental exercise of power, we're not going
15:44
Speaker 1: to see Congress as having given that to the president
15:48
Speaker 1: without explicit language, because the explicit language is what will
15:52
Speaker 1: provide the intelligible principle. In the absence of that, we
15:55
Speaker 1: will just assume the power hasn't been delegated. That's what
15:57
Speaker 1: I mean by saying that it's related to this constitutional
16:00
Speaker 1: So there's that debate. At one point, Neil Katyel seemed
16:05
Speaker 1: to lean into the Barrett position to say, well, it's
16:08
Speaker 1: just a matter of figuring out what Congress was up to.
16:10
Speaker 1: Doesn't really matter for this case that he can he
16:12
Speaker 1: can win regardless of what the nature of the Major
16:16
Speaker 1: Questions doctrine is. When just as Gorsuch said to him,
16:20
Speaker 1: I don't think you can win about the Major Questions doctrine.
16:23
Speaker 1: I think what he was getting at was that the statute,
16:28
Speaker 1: just taken at face value, uses the word regulate, which
16:32
Speaker 1: historically has, at least in some contexts, included the power
16:35
Speaker 1: to impose tariffs. I should say I think Justice Gorsach
16:39
Speaker 1: is wrong about that. I mean, he might be right
16:41
Speaker 1: as a prediction that, but I think he's wrong in that.
16:45
Speaker 1: I think Katyl has a good argument that we don't
16:49
Speaker 1: need the Major Questions doctrine, but we also don't. We
16:53
Speaker 1: never read a statute literally and in isolation. That is
16:57
Speaker 1: the text of the statute read against the backdrop of
17:01
Speaker 1: all these other statutes Congress has enacted where it use
17:04
Speaker 1: the word tariff or duty or custom or something like that,
17:09
Speaker 1: and didn't use it here, tells us about the literal
17:12
Speaker 1: meaning of the language here, So that I think there
17:15
Speaker 1: is a textualist answer that doesn't rely on the Major
17:17
Speaker 1: Questions doctrine that under which the plaintiffs win.
17:20
Speaker 7: But you know, I'm just making an assessment.
17:24
Speaker 1: If Justice Scurtius thinks that they can't win without the
17:26
Speaker 1: Major Questions doctrine, then that suggests that if Cato is
17:30
Speaker 1: going to win, it's going to be with the Major
17:32
Speaker 1: Questions doctrine.
17:33
Speaker 2: So, I mean, the conservative justices use the Major Questions
17:37
Speaker 2: doctrine to block President Biden in his initiatives on student
17:42
Speaker 2: loan forgiveness, coronavirus vaccine mandates, and climate change. How would
17:48
Speaker 2: they reconcile it if they allow President Trump to exercise
17:53
Speaker 2: sweeping emergency powers with these global tariffs.
17:58
Speaker 7: Right, Well, so if they want.
17:59
Speaker 2: To reconcile it, I guess right.
18:01
Speaker 1: So the short answer is I don't think they can
18:04
Speaker 1: in a way that is persuasive to me. But you know,
18:08
Speaker 1: before the Supreme Court overruled the doctrine of Chevron deference
18:12
Speaker 1: to administrative agencies in the Lower Bright case a year
18:15
Speaker 1: and a half ago. Even then, there was a lot
18:19
Speaker 1: of scholarship showing, I think, persuasively that the real meaning
18:25
Speaker 1: of the Chevron defference doctrine was the Court deferred to
18:28
Speaker 1: decisions it liked and didn't defer to decisions it didn't.
18:32
Speaker 7: Like, and that had a political balance to it.
18:36
Speaker 1: I think it would be child's play to write an
18:39
Speaker 1: opinion here that says, of course, we have the major
18:41
Speaker 1: questions doctrine, and what that requires is a clear delegation.
18:44
Speaker 1: Here there is a clear delegation because regulate historically has
18:48
Speaker 1: included the power to have tariffs and so forth. Right,
18:52
Speaker 1: that is the threshold for applying the Major Questions doctrine
18:56
Speaker 1: is a finding that Congress didn't clearly delegate. So they
19:00
Speaker 1: would just say, well, Congress here in the text clearly
19:02
Speaker 1: did delegate. I'm not saying that would be persuasive, but
19:05
Speaker 1: I think that's that's what they would do.
19:06
Speaker 2: And where did the you mentioned the non delegation doctrine?
19:11
Speaker 2: Will that play in here.
19:13
Speaker 1: Oh sure, So, I mean that's that was the line
19:17
Speaker 1: of questioning that Neil that Justice Courses was pursuing against
19:21
Speaker 1: the Solicitor General, which is, he wanted him to get
19:24
Speaker 1: this SG to admit and successfully got him to admit
19:28
Speaker 1: that under the government's theory of the case, Congress could
19:35
Speaker 1: give to the president the authority to regulate the entire
19:39
Speaker 1: economy if if there's any non delegation doctrine at all, Right,
19:43
Speaker 1: there's no intelligible principle of Congress saying hey, if you
19:47
Speaker 1: think it's a good idea, do whatever you want with
19:49
Speaker 1: respect to foreign trade. And that's why sour the SG
19:53
Speaker 1: eventually backed off of this position that there's no non
19:57
Speaker 1: delegation doctrine in this area.
19:59
Speaker 2: So you wouldn't be surprised then, if the court ends
20:04
Speaker 2: up upholding Trump's ability to impose these tariffs undra AIPA.
20:10
Speaker 7: I wouldn't be surprised with the result either way.
20:12
Speaker 1: Again, as I said, I think that the given my priors,
20:17
Speaker 1: I thought that the result of the argument is that
20:20
Speaker 1: the plaintiffs should win. That's what I thought before the argument,
20:23
Speaker 1: and I was heartened by the questions that at least
20:27
Speaker 1: three of the conservative justices asked of the Solicitor General.
20:31
Speaker 1: But this turn that the argument took near the end
20:36
Speaker 1: suggests to me that it's certainly not a sure thing.
20:39
Speaker 2: Anything else that struck you, Mike one thing.
20:43
Speaker 1: So in my preview of the case on my blog
20:46
Speaker 1: on Monday, I pointed to some remarkable statements very early
20:52
Speaker 1: in the government's opening brief, quoting President Trump about how
20:57
Speaker 1: magnificent these tariffs are. And I thought that was potentially
21:01
Speaker 1: counterproductive because you know, it included, you know, typical Trumpian
21:06
Speaker 1: rhetoric about how our country is, you know, going to
21:09
Speaker 1: hell in a handbasket, and you know, thanks to me
21:12
Speaker 1: and my beautiful tariffs, everything's working out. But if you
21:16
Speaker 1: get rid of this, it'll be, you know, armageddon. I'm
21:19
Speaker 1: not really exaggerating much. That's not using literal language, and
21:23
Speaker 1: you know, it's just it was over the top rhetoric,
21:25
Speaker 1: and it was also economically illiterate, right, the claim that
21:28
Speaker 1: this is doing wondrous for the economy. And I noticed
21:32
Speaker 1: during the course of the argument that Sour would occasionally
21:36
Speaker 1: give versions of that not quite as over the top
21:39
Speaker 1: as in the.
21:40
Speaker 7: Brief, and he seemed to get no reaction at all.
21:43
Speaker 1: From any of the justices except for Justice Kavanaugh, who
21:46
Speaker 1: did seem to give some credit to Trump forgetting various
21:51
Speaker 1: policies adopted In virtuous He pointed to the India tariffs
21:56
Speaker 1: as serving you know, the foreign policy goal of getting
22:00
Speaker 1: Russia to change its stand in the war against Ukraine,
22:05
Speaker 1: and you know the effect on the fentnal precursors with China.
22:09
Speaker 1: But for the most part, it struck me that the
22:13
Speaker 1: reality of what's going on, which is, you know, this
22:15
Speaker 1: mad king randomly imposing tariffs and then taking them off
22:19
Speaker 1: because of.
22:19
Speaker 7: His whims, didn't really penetrate.
22:21
Speaker 1: And I think that's probably good for the government's case,
22:24
Speaker 1: because the more that you look at what's really going
22:27
Speaker 1: on here, the less it looks like any kind of
22:29
Speaker 1: sensible policy.
22:30
Speaker 2: We'll see what the decision is. Thanks so much, Mike.
22:33
Speaker 2: That's Professor Michael Dorf of Cornell Law School. Coming up
22:37
Speaker 2: next on the Bloomberg Lawn Show, we'll talk to a
22:39
Speaker 2: trade lawyer about the oral arguments. The US Supreme Court
22:44
Speaker 2: appeared skeptical of President Donald Trump sweeping global tariffs, as
22:50
Speaker 2: key Justice Is suggested he'd overstepped his authority with his
22:54
Speaker 2: signature economic policy. My guest is Timothy Bright Bell, partner
22:59
Speaker 2: and coach of the International Trade practice at Wiley Rhein.
23:03
Speaker 2: Tim tell us what's at stake in this case.
23:07
Speaker 8: This case involves the centerpiece of President Trump's economic agenda.
23:13
Speaker 8: This argument is the biggest trade case the Supreme Court
23:16
Speaker 8: has ever heard, and it goes straight to the key
23:19
Speaker 8: constitutional issue of who has the power to impose tariffs,
23:24
Speaker 8: the US Congress or the president. President Trump says the
23:28
Speaker 8: law that he used, the International Emergency Economic Powers Act,
23:32
Speaker 8: gives him the power to regulate imports, and that that
23:36
Speaker 8: includes the power to impose tariffs, including fentanyl tariffs on China, Canada,
23:43
Speaker 8: and Mexico, and reciprocal economic tariffs on almost all countries.
23:47
Speaker 8: Whereas the plaintiffs in this case say that Congress has
23:49
Speaker 8: that power and cannot delegate that power, and that AIPA,
23:54
Speaker 8: which has never before been used to impose tariffs, does
23:57
Speaker 8: not include that power and authority. So that is what
24:01
Speaker 8: is at stake. And of course the tariffs under AEPA
24:05
Speaker 8: have led to collection of hundreds of billions of dollars
24:08
Speaker 8: of tariffs already, so it's very high economic stakes for
24:12
Speaker 8: the companies and industries that have paid those tariffs as well.
24:16
Speaker 2: Let's talk about some of the analysis during the oral arguments,
24:21
Speaker 2: and you know, there's always a textual analysis these days,
24:25
Speaker 2: and some of the justice's concerns that the text of
24:28
Speaker 2: the statute doesn't mention the word tariffs at all exactly.
24:35
Speaker 8: The argument focused quite heavily on this law used by
24:39
Speaker 8: President Trump AEPA and whether that law, which gives the
24:43
Speaker 8: president the power to regulate imports, also includes the power
24:48
Speaker 8: to impose tariffs. That really dominated most of the hearing,
24:52
Speaker 8: and the justices asked very difficult questions on both sides.
24:56
Speaker 8: The administration said and the Solicitor General and the argument
25:00
Speaker 8: said that the ability to impose tariffs is a core
25:04
Speaker 8: application of the ability to regulate imports in a historical context,
25:09
Speaker 8: said that, of course, the power to regulate imports would
25:13
Speaker 8: be read to include tariffs because tariffs have been used
25:17
Speaker 8: throughout our country's history. On the other hand, several justices
25:20
Speaker 8: were skeptical of that, and the plaintiffs in this case
25:24
Speaker 8: said that when the delegation includes tariff authority, there is
25:29
Speaker 8: always specific language to that effect, and that there are
25:34
Speaker 8: always conditions and tests and agency decisions that have to
25:38
Speaker 8: go into that tariff power. So there was a good
25:41
Speaker 8: amount of the argument focused on those issues, and again,
25:44
Speaker 8: whether the power to regulate imports includes the power to
25:48
Speaker 8: impose tariffs, And.
25:49
Speaker 2: What did you think of a Solicitor General arguing that
25:52
Speaker 2: the Trading with the Enemy Act of nineteen seventeen gives
25:57
Speaker 2: the president authority and also to a nineteen seventy six
26:01
Speaker 2: tariff by President Richard Nixon that the Supreme Court upheld.
26:08
Speaker 8: Well, I think both sides had responses there. So the
26:12
Speaker 8: Solicitor General argued, yes, that the Trading with the Enemy
26:15
Speaker 8: Act was used to impose tariffs in a prior situation
26:21
Speaker 8: by President Nixon, and that there's no reason to think
26:25
Speaker 8: that anything had changed when AEPA had passed. On the
26:28
Speaker 8: other hand, I think the plaintiffs had a response to
26:32
Speaker 8: that in terms of the fact again that when tariffs
26:36
Speaker 8: are involved, there are always conditions on their use, there
26:40
Speaker 8: are always specific procedures, and also the fact that the
26:44
Speaker 8: reality is that no other president in fifty years has
26:48
Speaker 8: used AIPA to impose tariffs. So a lot of discussion
26:53
Speaker 8: on that, I think, tough questions from many of the justices,
26:58
Speaker 8: and that is one of the shoes that's joined and
27:01
Speaker 8: will have to be decided.
27:02
Speaker 2: What role does the Major Questions doctrine play here? It's
27:07
Speaker 2: was mentioned several times, and the Chief Justice seemed to
27:10
Speaker 2: think it was important Justice score such at one point
27:15
Speaker 2: said to Neil Katyal, I think you're going to need
27:18
Speaker 2: the Major Questions doctrine.
27:21
Speaker 8: Yes. So the question here is does the Major Questions
27:24
Speaker 8: Doctrine require a clear statement in AIPA that it includes
27:29
Speaker 8: the power to impose tariffs? And this Court has not
27:34
Speaker 8: hesitated to start using that doctrine more broadly, but I
27:40
Speaker 8: think you're right that the justices had some concerns about
27:44
Speaker 8: pursuing it in this venue. And again the question comes
27:49
Speaker 8: to is the power to tariff implied in the power
27:54
Speaker 8: to regulate imports or if it's not. Was this a
27:58
Speaker 8: question that Congress was required to state clearly that tariffs
28:03
Speaker 8: were a part of what was envisioned by the new law.
28:08
Speaker 2: Do you think that how the conservative justices used the
28:12
Speaker 2: Major Questions doctrine to stop several of Biden's initiatives? Do
28:16
Speaker 2: you think that that is something that they'll have to
28:20
Speaker 2: explain if they allow Trump's tariffs to go through.
28:25
Speaker 8: I think it's an interesting question whether they'll go there,
28:27
Speaker 8: or whether they will just focus on the language of
28:30
Speaker 8: AIBA and this issue of whether the power to regulate
28:33
Speaker 8: imports includes the power of tariff and I think several
28:37
Speaker 8: justices went down that road. I don't think just because
28:41
Speaker 8: these doctrines have been used in other cases, such as
28:44
Speaker 8: the Biden student bound forgiveness case, doesn't necessarily mean that
28:47
Speaker 8: they will have to address it in this opinion if
28:50
Speaker 8: they have other bases for finding that the tariffs were
28:54
Speaker 8: legal or improper in any way.
28:57
Speaker 2: What was your take on Justice Core, such as questioning
29:01
Speaker 2: of the Solicitor General early in the arguments where he
29:06
Speaker 2: expressed concerns about the extent of presidential power that Trump
29:12
Speaker 2: is claiming and where it could lead.
29:16
Speaker 8: Yes, I thought that was very interesting. Justice cours such
29:19
Speaker 8: as you mentioned, ask the hypothetical of if Congress can
29:22
Speaker 8: delegate the tariff authority, what would prohibit Congress from delegating everything,
29:28
Speaker 8: including the power to declare war, which is clearly given
29:31
Speaker 8: in the Constitution to Congress and Justice. Corsich also called
29:37
Speaker 8: the government's reading of its tariff power as a one
29:41
Speaker 8: way ratchet and an accretion of power to the president,
29:45
Speaker 8: and one that Congress could not recover. Without a supermajority
29:51
Speaker 8: or a veto proof majority, and so that was a
29:53
Speaker 8: very interesting discussion. I'm certainly raising some concerns about the limits,
29:59
Speaker 8: if any, on the authority that the government was claiming.
30:03
Speaker 2: And where does the non delegation doctrine that Gorsuch was
30:07
Speaker 2: talking about fit in.
30:09
Speaker 8: Well, again, Congress, under the non delegation doctrine, Congress cannot
30:13
Speaker 8: transfer to another branch hours that are strictly and exclusively legislative.
30:19
Speaker 8: But it may confer substantial discretion on executive agencies to
30:25
Speaker 8: implement and enforce the laws. So that's the doctrine in general,
30:30
Speaker 8: and the courts have interpreted that to say that a
30:33
Speaker 8: delegation of this discretion is constitutional as long as Congress
30:39
Speaker 8: lays down an intelligible principle to which the person or
30:45
Speaker 8: the agency is directed to conform. And that intelligible principle
30:50
Speaker 8: standard is a fairly low bar to clear. It's only
30:53
Speaker 8: been found lacking in a couple of statutes. So I
30:58
Speaker 8: don't think non delegation plays as much of a role
31:02
Speaker 8: as the major questions doctrine, at least from how the argument,
31:05
Speaker 8: the oral argument played out.
31:07
Speaker 2: You know, it just seemed to me as if the
31:09
Speaker 2: Trump administration is having to bend over backwards and torture
31:14
Speaker 2: the language to try to get to the result that
31:17
Speaker 2: they want, whereas a plane reading wouldn't include tariffs.
31:22
Speaker 8: Well, I think that really is the key issue. Again,
31:25
Speaker 8: the Solicitor General said, of course it would be understood,
31:28
Speaker 8: and implied that the power to regulate imports includes the
31:34
Speaker 8: power to impose tariffs, and in fact, adjusting imports is
31:42
Speaker 8: another definition of regulating, and also the fact that since
31:45
Speaker 8: the founding, historically tariffs have been a primary way to
31:50
Speaker 8: regulate imports. So the Solicitor General was arguing it was
31:54
Speaker 8: a natural reading of the law, But the justices were
31:58
Speaker 8: skeptical and asked tough questions and noted that in every
32:02
Speaker 8: other law where tariffs are involved, the power is made
32:05
Speaker 8: very explicitly clear and it comes with conditions.
32:08
Speaker 2: Where do you think the justices are going to come
32:10
Speaker 2: out here.
32:12
Speaker 8: Well, I'm not in the business of making predictions. Generally,
32:16
Speaker 8: I think my own personal view is that the court's
32:19
Speaker 8: three Democratic justices probably vote against these tariffs. And then
32:22
Speaker 8: the question is whether some of the majority of the
32:25
Speaker 8: court have similar concerns about the president's use of this law.
32:30
Speaker 8: And I do think that it's still a very close decision.
32:34
Speaker 8: It could go either way based on the questioning. My
32:37
Speaker 8: own view, I thought Chief Justice Roberts and Justice Barrett
32:41
Speaker 8: and Justice Gorsich were perhaps more skeptical of the president's
32:46
Speaker 8: tariff authority under a than the other justices. But again,
32:51
Speaker 8: that was just the oral argument. We don't really know
32:53
Speaker 8: how it will come out. I guess the only other
32:56
Speaker 8: point I would make is, although it was discussed the
33:00
Speaker 8: oral argument, I have a hard time seeing this court
33:03
Speaker 8: making a split decision that some of President Trump's tariffs
33:07
Speaker 8: are acceptable but others are not. I mean, I suspect
33:10
Speaker 8: the courts would prefer not to be in the business
33:12
Speaker 8: of making those judgment calls going forward. So I could
33:15
Speaker 8: be wrong, but I think the Court will either decide yes,
33:19
Speaker 8: the power to regulate imports includes the power to tariff,
33:22
Speaker 8: or no it does not, rather than some sort of
33:24
Speaker 8: split decision on the fentanyl tariffs versus the reciprocal tariffs.
33:29
Speaker 2: So if the court rules against Trump, what happens next,
33:33
Speaker 2: I mean, what happens to his tariffs?
33:35
Speaker 8: Well, two things would happen. First of all, there would
33:38
Speaker 8: likely be some sort of a refund process for importers
33:41
Speaker 8: that paid the tariffs during this time, and there is
33:44
Speaker 8: some precedent for that before that was discussed during the
33:47
Speaker 8: oral argument a situation where the court struck down a
33:51
Speaker 8: harbor maintenance tax and there was basically a process where
33:55
Speaker 8: companies could file claims for the amount of the tax
33:58
Speaker 8: that they paid. So Barretts was concerned that this could
34:02
Speaker 8: be a mess and could be very unwieldy, and so
34:04
Speaker 8: there were some questions on that point. I guess the
34:07
Speaker 8: more important point is what will the president do going forward?
34:10
Speaker 8: And I think it's clear that tariffs are still a
34:14
Speaker 8: cornerstone of this administration's economic policy, and if the Court
34:18
Speaker 8: says that the President cannot use AIPA, the president will
34:24
Speaker 8: likely pivot to one of several other trade tools that
34:28
Speaker 8: are available, and the Court mentioned many of these, including
34:32
Speaker 8: Section one twenty two, the section two thirty two, the
34:35
Speaker 8: National Security Law, which the administration has already made quite
34:39
Speaker 8: a bit of use of in this administration, Section three
34:42
Speaker 8: zero one, and so forth. The limit on those laws
34:46
Speaker 8: is that they do require studies or actions by other agencies.
34:50
Speaker 8: So Section two thirty two requires a study and a
34:53
Speaker 8: report by the Commerce Department and consultation with Defense Department.
34:58
Speaker 8: In order to decide that imports of a certain product
35:02
Speaker 8: like semiconductors or pharmaceuticals are a threat to national security. Similarly,
35:09
Speaker 8: Section three ZHO one, which was the law used to
35:13
Speaker 8: impose tariffs on China during the first Trump administration, also
35:18
Speaker 8: requires a detailed study by the US Trade representative with
35:22
Speaker 8: public inputs. So those tools, for the most part, cannot
35:26
Speaker 8: be used as quickly as AEPA was used by President.
35:29
Speaker 2: Trump or anything that was striking to you in the
35:33
Speaker 2: oral arguments.
35:34
Speaker 8: I thought it was interesting when Chief Justice Roberts said
35:38
Speaker 8: that it seemed to him that using this law to
35:41
Speaker 8: have the president's foreign affairs power trump the legislative power
35:46
Speaker 8: to regulate trade seems to neutralize Congress's power. So I
35:50
Speaker 8: thought that was notable. Justice Barrett asked whether there was
35:54
Speaker 8: any other time in history with a phrase regulate imports
35:57
Speaker 8: was read to include the imposition of tear riffs, and
36:01
Speaker 8: she seemed not entirely convinced by the response from the
36:04
Speaker 8: Solicitor General, and then Justice Kavanaugh asked, you know, the
36:10
Speaker 8: historical perspective was the tariff power the kind of power
36:14
Speaker 8: understood by Congress to exist when the AEPA law was passed,
36:19
Speaker 8: and he also did ask why in prior economic emergencies
36:22
Speaker 8: have other presidents not used IP but to invoke tariffs.
36:26
Speaker 8: So again, very tough questions on all sides, and still
36:31
Speaker 8: a very close case as to how this will ultimately
36:34
Speaker 8: come out.
36:34
Speaker 2: Thanks so much for joining me, Jim. That's Timothy Brightbill
36:38
Speaker 2: of Wilie Rhine, and that's it for this edition of
36:41
Speaker 2: The Bloomberg Law Show. Remember you can always get the
36:44
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