Unconstitutionality of Trump’s tariffs is clear, but where trade war goes from here isn’t

Trump and his “liberation day” poster board. (Photo by Chip Somodevilla/Getty Images)

Most of the tariffs that have been decreed by Donald Trump were ruled unconstitutional by the U.S. Court of International Trade Wednesday.

While markets were rallying Thursday at the prospect of a halt to Trump’s trade wars, it is unclear whether the ruling will mark a dramatic curtailment of Trump’s taxes on imports or merely add to global economic chaos and confusion Trump’s policies have created.

Trump has claimed his tariffs are authorized by the International Emergency Economic Powers Act (IEEPA), which was passed by Congress a half century ago. Trump is the first president to cite the act as the legal basis for establishing tariffs. 

Trump had declared that fentanyl trafficking was an “emergency” warranting tariffs against China, Mexico, and Canada, and that trade imbalances with other nations was an “emergency” warranting his worldwide retaliatory tariffs announced on April 2, which Trump dubbed “liberation day.”

Trumps’ “assertion of tariff-making authority… exceeds any tariff authority delegated to the President under IEEPA,” the three member federal court unanimously ruled Wednesday.

Citing the IEEPA, the court noted the act “may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared,” and the law “may not be exercised for any other purpose.” 

“Because of the Constitution’s express allocation of the tariff power to Congress, we do not read IEEPA to delegate an unbounded tariff authority to the President,” the court’s ruling said. 

Under the Constitution, Congress “shall have the power to lay and collect taxes, duties, imposts, and excises,” and also has the power  “To regulate commerce with foreign nations.”

There have been attempts by some members of Congress, including some Republicans, to reassert congressional authority over Trump’s tariffs, but those efforts have failed to win the support of a significant number of Republicans who control Congress.

The court’s ruling Wednesday effectively declared congressional inaction “an unlimited delegation of tariff authority” and “an improper abdication of legislative power to another branch of government,” adding “simply with separation of powers in mind, any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional.”

The case against Trump’s tariff authority was led by the attorneys general of Oregon and Arizona, and joined by several other AGs, including Nevada’s Aaron Ford.

“The president had no legal authority to impose these tariffs, and his unlawful actions would have caused billions of dollars of damage to the American economy,” Ford said in a statement Wednesday. “This decision is a win for the rule of law and for Nevadans’ pocketbooks.” 

But the impact of the Wednesday’s court decision remains unclear. The Trump administration immediately signaled it will appeal the trade court’s ruling. And economists and analysts note Trump could turn to interpretations of laws other than the IEEP to claim authority to impose tariffs.