It is time to start paying attention to tariffs
Photo via Reuters
LUCAS HAYDEN: If you ask the average American what, in their view, the government’s biggest priority should be, you can expect to get a plethora of responses—but it is not likely that tariffs would be frequently mentioned. Yet the outcome of the case over President Donald Trump’s authority to levy tariffs on the grounds of national emergencies, currently in the Supreme Court, will have incredibly far reaching effects for the country—far beyond trade policy.
Four national emergencies declared by Trump in sequence—one to impose a 10% tariff on all countries coinciding with “reciprocal” tariffs of up to 50% and three more to levy additional tariffs on China, Mexico and Canada—sparked the case, which the Court heard arguments for on Nov. 5. The question of legality revolves around the President’s usage of IEEPA, the International Emergency Economic Powers Act, which Congress passed in 1977 to rein in presidential responses to international economic emergencies. It gives the president the authority to regulate international commerce only after declaring a national emergency.
While the justices have not finalized their ruling yet, the majority of them seemed skeptical of the federal government’s reasoning for invoking IEEPA. Central were the questions of whether or not tariffs counted as taxes, whether or not the ability to “regulate” conferred authority to levy tariffs and how Trump’s usage of IEEPA affected the separation of powers. It is impossible to know for certain how the court will answer these questions before the decision comes out, but it is possible to weigh what the decision will impact, regardless of what it is.
There are a number of ways the court could side against the administration. They could rule that there is no national emergency requiring the invocation of IEEPA, that the act does not allow the president to levy blanket tariffs on every country, or that IEEPA does not allow the president to levy tariffs at all. If the court were to side this way, the government would have to initiate a very messy process of refunding revenue collected by the tariffs as companies clamor to get their money back while also barring the president from, at the very least, levying blanket tariffs on the world, and force the administration to retreat in order to find other legal justification for them or to abandon them entirely. More broadly, however, the ruling would resoundingly place trade policy back in the hands of Congress, and likely cut back on the ability of the president to push policy through on the basis of national emergencies, of which President Trump has already declared nine in his second term. Some justices, such as Justice Brett Kavanaugh, worry that in these outcomes the president’s ability to manage foreign affairs would be severely set back.
The other potential outcome would be for the court to side with the Trump administration, allowing the president to continue declaring national emergencies in order to levy tariffs. This would further open the door for presidents to cut Congress out of the picture when attempting to enact their agenda via national emergencies, making for a stronger executive that can potentially continue siphoning power out of the legislative branch, a trend that has been continuing for decades. The more power the executive has over Congress, the easier it is to gain even more power over Congress, creating a positive feedback loop that eventually would render the people’s elected representatives obsolete. This consolidation of power in the executive could manifest even if the administration ruled against the government, in the outcome where the Supreme Court ruled that IEEPA tariffs were unconstitutional but that the court shouldn’t be the one to decide if a national emergency exists. A ruling such as this would greatly strengthen the president’s ability to conduct foreign policy.
Beyond loftier constitutional questions, however, the outcome of the case also will likely affect prices of the goods we buy. The prices of most imported goods, especially “durable” ones, such as electronics, have noticeably increased alongside tariffs. A ruling that allows the Trump administration’s tariffs to continue will maintain that trend, whereas a ruling striking them down will likely result in a decline in prices, if nothing else but for a short time. At the same time, the White House is still toying with the idea of “tariff checks,” checks for Americans funded by tariff revenue. This would be placed into jeopardy if the tariffs were struck down. The constitutionality of trade policies may not be the most exciting topic for many, but it has become undeniably important in the current political environment. The decision that will come out of this case, likely releasing in early January, will affect not just each and every person in America, but many abroad as well: strap in.
Lucas Hayden is a freshman from St. Louis majoring in International Politics at the School of Foreign Service.