Tariffs, the Supreme Court, and the Andrew Jackson Gambit

Yesterday the United States Supreme Court, as conservative half expected, disappointed those wishing to Make America Great Again. In two key cases, the Court ruled against about a third of the tariffs President Donald Trump has recently employed. Specifically, they ruled that the specific authority he cited, was not sufficient to empower him as he thought. But already the President is working around that decision. Furthermore, that workaround recalls an almost two-hundred-year-old precedent, set not by a Chief Justice, but by a President.

The specific ruling against tariffs

Reportage about the ruling of the Court is too poor to rate mention. Therefore, CNAV turns directly to the Supreme Court itself, which provides the text of its recent decisions.

The Court actually issued one opinion governing two cases:

• Learning Resources, Inc., et al., v. Trump et al. (24-1287) (from the D. C. Circuit Court of Appeals), and
• Trump et al. v. VOS Solutions, Inc., et al. (25-250) (from the Federal Circuit Court of Appeals).

Trump had cited the International Emergency Economic Powers Act (IEEPA) as his authority to impose tariffs to deal with:

• Refusal of the governments of Canada and Mexico to deal effectively with drug smugglers, and
• Most other countries’ own tariff policy against American goods.

Lower courts in both cases (U.S. District Court for D.C. and Court of International Trade) found for two importers, Learning Resources and VOS Solutions. The convoluted trail of review petitions brought both cases before the Supreme Court, which heard argument last year.

Yesterday the Court held that the IEEPA does not empower a President to impose tariffs. Chief Justice John Roberts, writing for the Court, basically held that:

• Tariffs are duties on imports,
• Congress and only Congress may “lay and collect taxes, duties, imposts and excises,” and
• President Trump’s tariffs constituted a usurpation of the taxing power of Congress.

Reasoning, concurrences, and dissents

The Court then ruled that the D. C. Circuit Court of Appeals must dismiss the Learning Resources case for lack of subject-matter jurisdiction. In short, tariffs, being an element of trade policy, rate challenge in the Court of International Trade, not the D. C. District Court. The Supreme Court affirmed the judgment of the Court of International Trade in the VOS Solutions case.

Roberts cobbled together a six-member majority, chiefly by recruiting Justice Amy Coney Barrett to his side. Justice Neil Gorsuch went along for the ride. (Originalist though he is, he is also a libertarian. As such he doesn’t think tariffs have any place in the government of a free society. Never mind that other governments impose tariffs; a libertarian stubbornly insists that tariff imposers cheat themselves alone. For further exposition on this point, see Robert W. Peck’s essay opposing tariffs.)

The Equitarians – Jackson, Kagan and Sotomayor JJ – uniformly concurred with Roberts. But Roberts invoked the “major questions doctrine” to say the IEEPA couldn’t grant tariff authority in any case. The Equitarians saw fit to read the IEEPA as specifically precluding such authority.

Justice Brett Kavanaugh flatly declared that his boss is crazy, and that he misreads both the Taxing Clause and the Act. Thomas and Alito JJ joined him. Similarly, Justice Thomas wrote his own dissent, saying the IEEPA does delegate regulatory authority to the President on foreign trade. Tariffs are part of such regulation – and the Constitution does permit such delegation as the IEEPA represents.

The workaround

Trump acted swiftly to reinstate the tariffs involved, or to impose others that would collect the same – or more – revenue. Alison Durkee reported only this morning in Forbes about Trump’s “backup plan.”

The Trump administration will find new ways to impose tariffs after the Supreme Court ruled against the president’s sweeping “Liberation Day” duties Friday, and while President Donald Trump announced “alternatives” Friday, including a 10% tariff he raised to 15% on Saturday, the new tariffs will likely have more restrictions than the ones the high court struck down.

This workaround does include a ten-percent tariff (now 15 percent) on all imports, from wherever. That levy is subject to a 150-day (five-month) deadline. Tellingly, his emergency declaration over a record trade deficit remains in force.

In fact, Justice Kavanaugh, in his dissent, specified the allowable workaround:

Although I firmly disagree with the Court’s holding today, the decision might not substantially constrain a President’s ability to order tariffs going forward. That is because numerous other federal statutes authorize the President to impose tariffs and might justify most (if not all) of the tariffs issued in this case…Those statutes include, for example, the Trade Expansion Act of 1962 (Section 232); the Trade Act of 1974 (Sections 122, 201, and 301); and the Tariff Act of 1930 (Section 338).

Of course libertarians like Justice Gorsuch (and Sen. Rand Paul, R-Ky.) will object that trade deficits don’t matter. Peck (see above) blames trade deficits on the government budget deficit, and on Richard Nixon canceling the redemption of dollars with gold.

But say the United States restored full gold redemption today. Tomorrow gold would start flowing out of the country, to the point of emptying Fort Knox. Unless the country ceased to have a trade deficit and started having a trade surplus.

More saliently: Peck and others insist that “everybody wins,” and that the sum of economic outcomes need never be zero. But need never be does not equate to can never be or will never be. When Communist China builds an economy on slave labor, and undercuts American free labor, that way lies perpetual unemployment and eventual loss of political sovereignty. Recall China’s name for itself: The Middle Kingdom. To rule the world, that is.

Previous articles on tariffs

CNAV has discussed tariffs many times before. Rather than repeat everything it said before, CNAV prefers to link to those articles:

• Trump first uses tariffs against Canada, Mexico and China
• Details on how the U.S. government once financed itself
• Correcting misunderstandings about tariff policy and effects
• The Robert Peck piece,
• and our rebuttal.

How else Trump reacted

The President never minces words. Indeed he drops words like bombs, as everyone knows who has followed his life and career. After the Supreme Court issued its ruling, he came out in true form.

https://truthsocial.com/@realDonaldTrump/posts/116104407604484915

https://truthsocial.com/@realDonaldTrump/posts/116104410806971686

https://truthsocial.com/@realDonaldTrump/posts/116105594741987893

https://truthsocial.com/@realDonaldTrump/posts/116105691693335080

https://truthsocial.com/@realDonaldTrump/posts/116105858701679073

https://truthsocial.com/@realDonaldTrump/posts/116109104602937332

https://truthsocial.com/@realDonaldTrump/posts/116109447886304328

Here are the relevant excerpts:

To show you how ridiculous the opinion is, the Court said that I’m not allowed to charge even $1 DOLLAR to any Country under IEEPA, I assume to protect other Countries, not the United States which they should be interested in protecting — But I am allowed to cut off any and all Trade or Business with that same Country, even imposing a Foreign Country destroying embargo, and do anything else I want to do to them — How nonsensical is that? They are saying that I have the absolute right to license, but not the right to charge a license fee. What license has ever been issued without the right to charge a fee? But now the Court has given me the unquestioned right to ban all sorts of things from coming into our Country, a much more powerful Right than many people thought we had.

After quoting Justice Kavanaugh’s dissent, Trump continues:

In actuality, while I am sure they did not mean to do so, the Supreme Court’s decision today made a President’s ability to both regulate Trade, and impose TARIFFS, more powerful and crystal clear, rather than less. There will no longer be any doubt, and the Income coming in, and the protection of our Companies and Country, will actually increase because of this decision. Based on longstanding Law and Hundreds of Victories to the contrary, the Supreme Court did not overrule TARIFFS, they merely overruled a particular use of IEEPA TARIFFS. The ability to block, embargo, restrict, license, or impose any other condition on a Foreign Country’s ability to conduct Trade with the United States under IEEPA, has been fully confirmed by this decision. In order to protect our Country, a President can actually charge more TARIFFS than I was charging in the past under the various other TARIFF authorities, which have also been confirmed, and fully allowed.

Therefore, effective immediately, all National Security TARIFFS, Section 232 and existing Section 301 TARIFFS, remain in place, and in full force and effect. Today I will sign an Order to impose a 10% GLOBAL TARIFF, under Section 122, over and above our normal TARIFFS already being charged, and we are also initiating several Section 301 and other Investigations to protect our Country from unfair Trading practices. Thank you for your attention to this matter. MAKE AMERICA GREAT AGAIN!

PRESIDENT DONALD J. TRUMP

In the second Truth listed above, Trump made an electrifying accusation:

It is my opinion that the Court has been swayed by Foreign Interests, and a Political Movement that is far smaller than people would think — But obnoxious, ignorant, and loud!

Trump returned to this theme in his press conference after the decision. When reporters asked him for evidence of “foreign influence” on the Court, he coyly replied, “You’ll find out.” If Trump made a generic statement that the Court has allowed the idea of cheap imports to persuade it, he needs no evidence. That a tariff-free environment serves the interests of exporters, goes without saying. But perhaps Trump has direct evidence to implicate certain Members of the Court. If he has, then he might reveal it in his next State of the Union Address.

In subsequent Truths, he announced his ten-percent baseline tariff, which he later raised to fifteen percent. He also promised further “adjustments” to his policies, which, he promised, would rake in even more money. Trump also singled out Thomas and Kavanaugh JJ for special praise.

Where did this really come from?

Let’s not kid ourselves. Yes, Justice Kavanaugh named, and described in detail, the specific workaround on tariffs Trump used. But Trump still defied the spirit of John Roberts’ decision. (And it is Roberts’ decision. That, no one may doubt with any justice.)

Yesterday, John Roberts presumed to tell a President what to do and what not to do. Trump himself described how incongruous, inconsistent, and intellectually indefensible that decision is. But more to the point, in citing separation of powers, Roberts violated separation of powers.

This, along with his decision in Florida ex rel. Bondi v. Sebelius (the Obamacare legalization decision), leads to one conclusion only. John Roberts is imitating the infamous Earl Warren. Warren decided that the Constitution would mean whatever he said it meant, any time he said it. No wonder his fellow Justice as good as said he was crazy.

This leads to another question. Can the Supreme Court truly make law that everyone else must obey? This would scandalize Hamilton, Madison and Jay (The Federalist Papers) if they saw it happen.

Trump just answered the question – but not, as some will accuse, with an original, unprecedented action.

Andrew Jackson, the first nullifier

The precedent comes from President Andrew Jackson. After the Court overruled him in Worcester v. Georgia (a Native-American land-residency case), Jackson allegedly retorted,

John Marshall has made his decision. Now let him enforce it!

Jackson did decline to assist in the enforcement of a decision to release from prison a man convicted of unlawful residence on tribal lands. This arguably was the first instance of executive nullification of a judicial – or Justicial – decision.

Donald Trump has, in spirit, engaged in executive nullification. True, Justice Kavanaugh pointed out how Trump could do it with little risk of challenge or other sanction. But only someone with the boldness and stubbornness of a Trump would even think to do such a thing.

So: call this the Andrew Jackson Gambit. Jackson would be proud, for two reasons. First, no President since Jackson has done executive nullification like this. Second, Jackson presided over a government that self-financed through tariffs. So the subject matter of the case would impress Jackson at least as much as Trump’s technique.

But Trump might need to employ a more direct act of executive nullification. That would make an interesting challenge. And it might come sooner than anyone thinks, and on the subject of immigration, deportation, and removal.

For now, Trump just nullified a Supreme Court opinion on tariffs. He had to, because the alternative – giving the money back – is unthinkable. But Trump’s term will eventually test the limits of the Supreme Court’s power. The battle is joined, the horns locked – and the stakes high.