Earlier this month, the Supreme Court heard oral argument in Trump v. V.O.S. Selections, Inc, a case originally decided by the Federal Circuit. The Court granted review to consider whether the International Emergency Economic Powers Act authorizes President Trump to impose tariffs for national emergencies. The Court also granted review to consider, even if IEEPA authorizes the tariffs, whether the Act unconstitutionally delegates legislative authority to the President. This is our argument recap.
Solicitor General D. John Sauer argued on behalf of the United States. Sauer argued the Supreme Court previously “held that IEEPA’s sweeping and unqualified language grants the President’s actions the strongest presumption of validity and the widest latitude of judicial interpretation.” Sauer asserted the respondents are “wrong” to argue tariffs are the “only tool that Congress did not grant the President” when dealing with “foreign emergencies.” In particular, according to Sauer, the “phrase ‘regulate importation’ plainly embraces tariffs.” He contended the tariffs “are among the most traditional and direct methods of regulating importation.”
Sauer also argued the “major questions doctrine does not apply here.” He suggested “IEEPA confers major powers to address major problems on the President, who is perhaps the most major actor in the realm of foreign affairs.” Also, Sauer contended, the “nondelegation doctrine casts no doubt on IEEPA because Congress may assign the President broad authority regarding the conduct of foreign affairs, where he enjoys his own inherent Article II powers.”
Justice Thomas asked why the “major question doctrine doesn’t apply to the President in this case.” In response, Sauer argued that, “in the foreign affairs context,” the President “has his own inherent Article II authority,” so it is “a particularly poor fit to apply the major questions doctrine.”
Justice Kagan asked Sauer to explain “what kind of Article II powers” he relied on in answering Justice Thomas’s question. According to Sauer, the Court has “recognized the President has broad inherent authority to address foreign situations, foreign affairs, [and] foreign policy, including foreign-arising emergencies.” Sauer said the President’s “inherent Article II powers” and a “sweeping delegation of . . . authority from Congress” establish that Congress has provided the President “powers to address international emergencies.” Sauer suggested that, when Congress granted the President this power, it also gave him “tools,” including “Article I tools . . . [and] the power to regulate foreign commerce.” Here, Sauer suggested, the President is not exercising the “power to tax.” Instead, he said, he is exercising “the power to regulate foreign commerce.” He said these are “regulatory tariffs,” not “revenue-raising tariffs.” According to Sauer, the revenue raised “is only incidental” to the power the President is using.
Justice Jackson asked whether “any President” previously interpreted the language in question to impose tariffs.” In response, Sauer pointed to “President Nixon’s 1971 tariffs.”
Justice Kavanagh asked Sauer to explain “the significance of the Nixon example and precedent here.” In response, Sauer argued “regulate importation” provides “the authority to tariff, impose regulatory tariffs at the border, [and] forward-facing tariffs at the border.” According to Sauer, moreover, in a previous case the Court interpreted “regulate importation” to “carry with it the authority to impose tariffs.”
Justice Barrett asked Sauer if he could “identify any statute that used that phrase to confer” the power to impose tariffs. In response, Sauer identified two statutes.
Justice Kagan asked Sauer how the government’s argument fits “with the idea that a tax with no ceiling . . . would raise a deep delegation problem.” In response, Sauer argued IEEPA is a “statute that Congress carefully crafted to grant the President admittedly broad powers to address foreign arising emergencies.”
Justice Gorsuch asked if the government is claiming the President has “inherent authority over tariffs in peacetime.” In response, Sauer maintained the government does “not assert” that the President has inherent authority to assert tariffs in peacetime. But, Sauer argued, “Congress can delegate that” power.
Justice Kavanaugh asked Sauer to explain the “understanding of Congress in 1977 vis-à-vis that Nixon example when Congress re-enacts or enacts the ‘regulate importation’ language into IEEPA.” In response, Sauer argued “Congress at that time was fully aware that a court of appeals with exclusive jurisdiction had interpreted that very phrase [regulate importation] very visibly, very prominently, to include the power to tariff and then re-enacted it without change.”
Neal K. Katyal argued on behalf of the private parties. Katyal asserted that “[t]arrifs are taxes.” And, said Katyal, the “founders gave that taxing power to Congress alone.” Here, Katyal argued, “the President bypassed Congress and imposed one of the largest tax increases in our lifetimes.”
Katyal suggested many other doctrines make the tariffs “illegal.” Katyal pointed to the “presumption that Congress speaks clearly when it imposes taxes and duties and the major questions doctrine.”
Katyal argued it is “implausible” that Congress provided the “President the power to overhaul the entire tariffs system and the American economy in the process.” Congress, Katyal continued, knows “how to delegate its tariff powers,” because every time for “238 years, it’s done so explicitly.” According to Katyal, moreover, “IEEPA looks nothing like those laws.” Furthermore, Katyal argued, Congress has used the word “regulate” hundreds of times, but “never once to include tariffs.”
Justice Thomas suggested Katyal’s argument “on nondelegation would also have to apply to embargoes and to quotas.” In response, Katyal asserted that, in “1790, George Washington was delegated massive embargo power from the Congress,” but Congress “never gave the president any sort of delegation of tariff authority at the time.” Katyal explained the private parties are not saying Congress cannot ever “delegate tariff authority.” Instead, Katyal argued, they are arguing there must be “intelligible principles” limiting that authority. On this point, Katyal suggested every limit Sauer argued existed in IEEPA are “not judicially enforceable,” and so, Katyal said, there is “no limit whatsoever.”
Justice Roberts suggested that, while “tariffs are a tax” and the power to tax is “a core power of Congress,” here the tarrifs are a “a foreign-facing tax” and the power to deal with foreign states is a “core power of the executive.” Thus, Justice Roberts said, even though the tariffs are a tax, they directly implicate the “President’s foreign affairs power.” In response, Katyal asserted that, “instead of thinking about foreign versus domestic, the better way of thinking about it is Article I versus Article II.” Also, Katyal maintained, the Founders recognized that tariffs have “foreign policy implications,” but they “exclusively committed that power to the Congress in Article I, Section 8.”
Justice Kavanagh asked about President Nixon’s tariffs. He asked Katyal why Congress didn’t “change the language” in IEEPA. In response, Katyal argued that “President Nixon did not rely on the statute whatsoever.” According to Katyal, moreover, Congress has never used “regulate” for “impos[ing] taxes or revenue-raising.” Thus, Katyal argued, when Congress enacted IEEPA, “there is no evidence Congress though it was ratifying” the Supreme Court’s precedent conferring on the President the power to apply tariffs.
Justice Alito asked Katyal if he would agree that statutes conferring “on the President real emergency powers are often phrased much more broadly than other statutes.” In response, Katyal asserted that “other emergency statutes have very serious limits.”
Justice Kagan asked about the “foreign-facing” nature of tariffs. In response, Katyal argued, even if the tariffs are foreign-facing, “there is still no Article II power whatsoever.” According to Katyal, there “is no citation whatsoever in the government’s brief to any notion that the President has Article II tariff authority.”
Justice Jackson asked “whether there is anything [in IEEPA’s legislative history] that supports the conclusion that Congress actually intended for this IEEPA statute to allow or authorize the President to impose these tariffs.” In response, Katyal contended there “was virtually nothing.”
The Solicitor General of Oregon, Benjamin Gutman, argued on behalf of the state respondents. Gutman argued “[l]icenses are different than license fees.” Gutman, moreover, said he is “not aware of any history in the five decades that IEEPA has been in force of any fees charged for the licenses under this statute.” Gutman argued licenses have been used when “the President might ban certain transactions with a foreign country but then grant licenses to do them for humanitarian reasons.” But, he said, there has “never been a fee charged for that.”
Justice Gorsuch asked for an explanation of what the language “or otherwise” does in IEEPA. In response, Gutman argued “‘or otherwise’ could be things like instructions or licenses.” Gutman contended that “having something that is a revenue-raising measure” is “fundamentally categorically different” from licenses. Moreover, Gutman argued, “the 19th century cases about the President’s inherent Article II authority” with respect to wartime importation do not allow the President “to impose tariffs on imports coming into the . . . United States.”
In Sauer’s rebuttal, he highlighted that the statutory language, “regulate importation,” is accomplished by means of “instruments, licenses, or otherwise.” According to Sauer, tariffs are the only means of regulation the opposing parties “would not include.” But, he argued, tariffs are the “most historically tested method of regulating imports.” As an example, Sauer pointed to a statue from 1790 that, he said, “delegated to President Washington essentially the entire scope of the Indian commerce power.” Sauer said the statute is “obviously analogous” here. He reiterated, moreover, that President Trump’s tariffs address a “foreign-facing situation,” with a “deep and profound historical pedigree [shown] through broad delegations of the regulation of commerce.” In short, Sauer maintained, the tariffs are “clearly regulatory tariffs, not taxes.” He said they are an exercise “of the power to regulate foreign commerce.” Sauer concluded his argument by saying President Trump’s tariffs are within the tradition of “historically very broad delegations of the power to regulate foreign commerce to the President because he has inherent Article II authority” to conduct foreign affairs.
We’ll report more when the Court decides this case.