Appeals court judges question trade emergency behind Trump tariffs
Why it matters: It is among the high-stakes legal questions threatening the sweeping tariffs at the center of Trump's economic agenda.
The big picture: Trump has leaned on untested powers to impose tariffs across much of the globe.
Those powers faced legal scrutiny on Thursday, just one day before he's set to lean on them to impose higher tariffs.
What they're saying: The judges pushed Justice Department lawyers on the Trump administration's declaration of a national emergency over trade deficits that have been persistent for years.
The judges questioned whether the administration can lean on a law that does not mention tariffs at all to impose them.
"If the president says there's a problem with our military readiness and he puts a 20% tax on coffee," that would not deal with the emergency, one judge said.
Details: The White House says the tariffs are covered under the International Emergency Economic Powers Act (IEEPA).
The law says the president can regulate economic transactions "to deal with any unusual and extraordinary threat" that amounts to a national emergency.
The White House says that U.S. trade deficits are among the national emergencies justifying its global tariff policies.
The intrigue: " A dissatisfaction with the limits in IEEPA itself is not a license for the court to impose its own limitations," Brett Shumate, an assistant attorney general at the Justice Department, argued.
Shumate argued that the trade deficit has "reached a tipping point" and the tariffs give the "president leverage to address the emergency."
The other side: A group of small businesses sued the Trump administration over the tariffs.
The judges pushed Neal Katyal, who argued on behalf of the plaintiffs, to clarify why the powers to regulate granted in IEEPA did not cover the imposition of tariffs.
"If this argument is true, every single time you and I sell a stock, the SEC can tax it,"Katyal, a former top DOJ official during the Obama administration, argued.
Context: Thursday's hearing comes after the Court of International Trade ruled in May that Trump overreached when imposing the tariffs.
The bottom line: Trump's global tariffs have unleashed a bout of economic uncertainty.
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