What legal tests are Donald Trump's tariffs facing?

Al Jazeera

4 days ago

Companies, consumers and countries have been paying close attention to United States President Donald Trump's aggressive policy of imposing tariffs.
Soon, the courts will weigh in on whether Trump has the power to levy those tariffs in the first place – a high-stakes legal battle that will either affirm a key pillar of Trump's economic policy or cut it off at the knees.
The US Constitution says Congress holds the power to impose tariffs, not the president. However, over the years, Congress has passed multiple laws ceding some of that power to the president.
Trump has justified his most far-reaching assertions of tariff power by citing the 1977 International Emergency Economic Powers Act, which allows tariffs on all imports during an 'unusual and extraordinary threat … to the national security, foreign policy or economy of the United States'.
Small businesses challenging that position in the case VOS Selections v Trump make two key arguments. They contend that the law doesn't explicitly allow the president to impose tariffs. And they argue that neither of two Trump tariffs – the levies against Mexico, Canada and China to counter a declared fentanyl crisis and those against a broad swath of trading partners to address US trade deficits – rise to the level of an 'unusual and extraordinary' emergency.
On Thursday, one day before Trump's deadline for a batch of new tariffs to take effect, the US Court of Appeals for the Federal Circuit will hear oral arguments in the case. The Trump administration lost the first round in May at the Court of International Trade. (That decision did not affect other Trump tariffs, such as those on steel, aluminium and cars or proposed tariffs on pharmaceuticals and semiconductors. Trump imposed these using other legal authorities.)
The appeals court will be the last stop before expected consideration by the Supreme Court.
Here's a primer on how this case could affect Trump's tariff policies:
Does the International Emergency Economic Powers Act allow tariffs?
Whether the law permits the imposition of tariffs may be hard for the administration to prove.
The law 'authorises the president to take various actions but with no mention of 'tariffs', 'duties', 'levies', 'taxes', 'imposts' or any similar wording', said Meredith Kolsky Lewis, a University at Buffalo law professor. 'No president has sought to impose tariffs pursuant to the law' before Trump
The administration's strongest argument may be that although the law 'doesn't specifically authorise tariff measures, it doesn't bar them either', said David A Gantz, a Rice University fellow in trade and international economics. 'Some have questioned whether Congress intended to cede basic Commerce Clause powers so completely to the president, but the statute does not appear to ever have been seriously challenged in Congress with repeal.'
Does the present situation constitute an emergency?
The second issue might be more challenging for Trump: Are trade deficits a security threat?
In asserting the authority to impose tariffs, Trump said 'large and persistent annual US goods trade deficits constitute an unusual and extraordinary threat to the national security and economy of the United States.'
Babson College economist Kent Jones was sceptical. 'Those with knowledge of trade economics scoff at the notion that a trade deficit is a national emergency,' he said. 'The US has run trade deficits consistently for the last four decades without signs of an economic emergency that can be systematically linked to the deficits.'
The tariffs are being applied to dozens of countries that ship more goods to the US than they import, which 'suggests a lack of an 'unusual' threat', Lewis said. 'In other words, this is commonplace.'
Using fentanyl trafficking and trade deficits as examples of emergencies breaks new ground, said Ross Burkhart, a Boise State University political scientist who specialises in trade.
Although the law 'does not delineate what a national emergency is, the precedent from previous administrations is not to invoke a national emergency based on day-to-day trade flows', Burkhart said.
An even more aggressive argument in the case of Brazil
Trump's threat of 50 percent levies on Brazil may be on thinner legal ground, legal experts said.
On July 9, Trump wrote a letter to Brazil's president, Luiz Inacio Lula da Silva, explaining that the new tariffs would be 'due in part' to Brazil's prosecution of former President Jair Bolsonaro, a Trump ally, as well as its treatment of US social media companies. The letter also cited a 'very unfair trade relationship' with Brazil.
[Screengrab from Truth Social]
On Wednesday, Trump declared an emergency based in part on the Bolsonaro prosecution, triggering a 40 percent tariff, effective after a week.
Experts said Trump's justifications ring hollow legally under the International Emergency Economic Powers Act. The Brazil policy isn't at issue in the case being argued on Thursday, but it has already resulted in at least one lawsuit.
Experts said they doubted that citing the Bolsonaro case as an emergency would survive judicial scrutiny. Bolsonaro sought unsuccessfully to hang on to power after Lula defeated him in the 2022 election, which prompted years of investigations and charges that could land him in prison.
'I and many others would agree that the Bolsonaro trial – even if [it were] questionable, and it isn't – would not come close to meeting' the standard under the International Emergency Economic Powers Act, Gantz said.
Trump's letter undercuts another key fact in the US-Brazil trade relationship: The US had a $6.8bn trade surplus with Brazil in 2024 and surpluses in earlier years as well.
Certain US sectors, such as social media and electronic payment networks, may have plausible gripes with Brazil over trade policy. Even so, Gantz said, 'all of these grievances together seem to me insufficient for action under the International Emergency Economic Powers Act.'
What happens next?
Most legal experts we talked to said the appeals court would have ample reason to follow the Court of International Trade's lead in striking down Trump's authority. 'I am quite confident that the law doesn't give a limitless grant of authority to the president simply by saying some magic words,' said Julian Arato, a University of Michigan law professor.
But that result is no certainty – and ultimately, the US Supreme Court will have the final say. The conservative-majority court should be a friendlier venue for the administration.
If the appeals court doesn't reverse the Court of International Trade's ruling, 'the Supreme Court will, in my opinion, likely do so,' Gantz said.
And even if the Supreme Court were to rule against Trump, he could still impose tariffs under other laws.
He could use Section 301 of the 1974 Trade Act, which allows tariffs when the president determines that a foreign country 'burdens or restricts United States commerce' through violations of trade agreements. This authority has been invoked dozens of times by various presidents.
Or he could use Section 232 of the 1962 Trade Expansion Act, which lets the president impose tariffs if national security is threatened. Trump and former President Joe Biden used this as the basis for steel and aluminium tariffs imposed since 2018.
These more traditional mechanisms have been more battle-tested in court than the International Emergency Economic Powers Act, Gantz said, providing 'a more persuasive legal basis for the tariffs'.