Trade Court Rules Against Trump's Tariffs

[00:00:00] Welcome to Discourse where we cut through the noise and make sense of the chaos. I'm your host, Wayne Unger. I'm a law professor and former Silicon Valley nerd, and I've spent years breaking down complex topics into digestible takeaways. And on this podcast, we'll take a deep dive into the pressing issues shaping our world in law.

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All right. Welcome back to Discourse. I'm your host, Wayne Unger, and we are recording today's episode on Wednesday, June 4th at 12:10 PM. And as always, I note things may have changed since.

On today's episode, the latest ruling from the United States Court of International Trade on Trump's broad, global, worldwide tariffs. The court of international trade has ruled that Trump [00:01:00] does not have the legal authority to enact, quote, unlimited tariffs on goods from nearly every country. Specifically, the court said in its ruling that the court does not read the I-E-E-P-A, which we'll discuss here in a second to confer such broad authority and it sets aside challenged tariffs imposed there under end quote. But the appellate court has stayed the International Trade Court's ruling. In the meantime, well, what is the Federal Court of International trade? What is the I-E-E-P-A or as I'll say on this episode, the I-E-E-P-A, and how will this impact you, this and more right after this message.

Thank you for listening to Discourse. We are [00:02:00] excited and honored to announce that you all have put us in the top 60 of News Commentary, podcasts in the United States on Apple Podcasts. So thank you once again. We'd like to continue making this podcast available to you without commercials. To help us continue this work commercial free, please join us as a subscriber and support us with a monthly contribution.

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late on Wednesday, May 28th. Just last week, the United States Court of International Trade struck down Trump's broad, universal, worldwide tariffs that he imposed against nearly all imports. I. From all countries. But since May 28th, a federal appeals court has temporarily stayed the Court of International trades ruling.

Thus effectively, it reinstated the tariffs pending the appeal. So the appeal needs to play out [00:03:00]before we see whether the United States Court of International trade got it right. You might recall that we've discussed these tariffs in past episodes. You might recall that I mentioned President Trump and his administration invoked what is the International Economic Emergency Power Act, or the I-E-E-P-A, or as I will say, the I-E-E-P-A as the source of his legal authority to impose such tariffs.

So let's start there, with the I-E-E-P-A. You might recall that I detailed how the President does not have the constitutional authority to impose tariffs. Rather, it is Congress that has the constitutional authority to tax, and that includes the imposition of tariffs since tariffs are a tax. At the end of the day, that's what they are.

There's no debate here whatsoever. It's indisputable. The Constitution is clear, and the Supreme [00:04:00] Court has consistently ruled Congress has the constitutional authority to tax and to regulate international commerce. So how is it that the President of the United States, who does not hold the constitutional authority to impose tariffs, can impose these tariffs?

How has President Trump done so well? Congress has given the president, the statutory authority to do so. Put simply, Congress has passed several laws over the last few decades that expressly grant the president the legal authority to impose tariffs. But that legal authority is not boundless. When the president exceeds his legal authority, well, that's where the courts come in.

Federal courts in general have the legal and constitutional authority to determine whether the president has acted lawfully or not. That's exactly what the Court of international trade did here. Under Article three of the Constitution, Congress [00:05:00] can create what the Constitution calls inferior courts that are subordinate to the United States Supreme Court.

We generally refer to these courts as Article three courts. The US Court of International Trade traces its history back to 1890, and in 1890, Congress passed the customs administrative act of 1890. Now this act provided for the appointment of nine general appraisers, collectively known as the Board of General Appraisers, inside the US Department of Treasury.

And according to the court's website, the board was responsible for settling disputes over customs, valuations of imported goods, tariff classifications on those goods, and the rate, the amount of the duties AKA, the tariffs, tariffs are duties. Now, the board was later renamed to the US [00:06:00]Customs Court in 1926, and four years later, in 1930, Congress removed the board from the Treasury Department and officially established it as a separate article three court.

In 1980, it was renamed once again, to. The US Court of International Trade and Congress expanded its jurisdiction and its status putting the US Court of International trade on par with other federal district courts. And it is this court, the US Court of International Trade, that issued the ruling one week ago on May 28th.

So let's pause for a second. Congress has created this court for this exact reason to adjudicate disputes, cases and controversies regarding trade. The US Court of International Trade has nine judges. Now one unique aspect of this international [00:07:00] trade court, Congress expressly stated that not more than five of the judges, five of the nine, on the court, shall be from the same political party.

While the president still holds the power to a point, the judges to the international trade court, just how he has the power to appoint any other judge or justice to the federal courts, and these judges, even though they have lifetime tenure under Article three, just like all other federal court judges, the president, however, must balance the political makeup of the court's judges. No more than five judges can be of the same political party. In effect, this means that the federal international trade court cannot, by law, have a super majority like we see on the United States Supreme Court. Now Trump and his supporters might argue that the international trade court cannot overrule the President on this.[00:08:00]

In fact, shortly after the decision was released on May 28th, many conservatives, including advisor Steven Miller, took to Twitter or X to express their disdain for the decision. But the law is crystal clear here, the Congressional Act that created the US Court of International trade, as we know it today, also provided that this court has the exclusive jurisdiction of any civil action commenced against the United States or its officers, and that's like Trump in his cabinet, for instance, that arises out of any law of the United States providing for number one, revenue from imports or tonnage; number two, tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than raising revenue; And number three, embargoes or other quantitative restrictions on the importation of merchandise.

That is what the [00:09:00] law says that created this court. They have the exclusive jurisdiction in those areas. So given all of this, the International Trade Court unquestionably has the legal authority to rule on Trump's unilateral tariffs, and any Republican or conservative who states otherwise is plainly incorrect.

There's no other way to slice it. Now that we've established that the Court of international trade has the legal authority to issue the ruling, let's dive into the ruling itself and let's see what the court said. In short, the court of international Trade said that President Trump acted unlawfully when he cited the I-E-E-P-A as the source of authority to impose these broad, unilateral worldwide tariffs. But there's another act that's relevant here that I should probably detail just a little bit further, and that is the Trading with the Enemy Act, or TWEA.

The Great [00:10:00] Depression led Congress to expand the president's authority under TWEA to declare states of emergency and exercise authority over international trade, even outside times of war. But decades later, Congress reformed the Pre's emergency powers, and as a part of this reform, Congress cabined the president's powers under TWEA to wartime only.

So, in so doing, Congress created a new law, the I-E-E-P-A to confer upon the president a new set of authority for the use in times of national emergencies, which powers are limited in scope than those that were previously given to him under TWEA. But Congress tied the IEPA to another act called the National Emergencies Act.

The National Emergencies Act placed new restrictions on the president with respected declarations of [00:11:00] national emergencies. So, first, as an example, the NEA, the National Emergencies Act, requires the president to transmit to Congress a notification of the declaration of a national emergency; and second, the act requires a biannual review by Congress to determine whether the national emergency shall be terminated.

This case arises from President Trump's April 2nd, 2025, executive order number 1 4 2 5 7. This executive order invoked the I-E-E-P-A to impose that 10% duty or 10% tariff on quote, all imports from all trading partners, end quote, which shall increase for a list of 57 countries to higher rates ranging from 11% to as high as 50%.

Now, per that executive order, the president stated that these quote, [00:12:00] large and persistent annual US goods trade deficits constitute an unusual and an extraordinary threat to the national security and the economy of the United States having its source in whole or in substantial part outside of the United States, in the domestic economic policies of key trading partners and structural imbalances in the global trading system.

So let's clear the air for a second, because Trump's tariffs have been hard to follow given their on again off again, chaotic nature. With many professionals in the global financial system, calling them. Taco tariffs. You might have heard that Taco tariffs and taco stands for Trump always chickens out and that has apparently upset him.

Very much so. But right now the worldwide tariffs at 10% remain in place for all countries while country specific higher rates are set to take [00:13:00] effect within the next few weeks. Some tariffs are paused. We know this because Trump has issued those pauses pending negotiations on trade deals, which we have yet to really see any substantive trade deal actually be finalized.

Now, the plaintiffs in this case argued that language in the IEEPA. Which is regulate importation does not confer a power on the president to impose tariffs. The court agreed with those plaintiffs. The court said that the plaintiffs in this case who sued the Trump administration over these tariffs are correct in the narrow sense that the imprecise term regulate importation from the law under any construction, that's any interpretation,

would comport with the separation of powers, the underpinnings of the non delegation, and the major questions doctrine. Well, it simply does not authorize anything as unbounded, as [00:14:00] unfettered as the worldwide and retaliatory tariffs that Trump issued. The court's reasoning was unlimited

delegation of tariff authority would be unconstitutional. And I agree with the court on this because again, remember, Congress has the authority to issue taxes, not the president. So there's a lot going on in this decision and there's a lot of law going on here. So let's try to break it down for it. Our system of government is founded on the separation of powers where each branch of government has a set of powers and authority so that no single branch of government becomes too powerful. And each branch of government should pay due respect to the other branches of government and their powers granted to them by the federal Constitution. So for instance, the President should respect to the decision of the United States Senate if the Senate voted not to confirm one [00:15:00] of the president's nominees, or appointees, because it is the Senate's job, the Senate has the sole authority to advise and consent AKA to confirm the presidential appointees. Congress through the authorities granted to it under Article one of the Constitution, can delegate some of its authority to the president.

This is well established. This is, and I am simplifying, what gave rise to the administrative agencies that all roll up to the president of the United States. For instance, when Congress created Social Security, the Social Security program, it also created the Social Security Administration and it tasked the Social Security Administration with managing or administering the Social Security program.

As another example, Congress created the Federal Aviation Administration or FAA. If you have ever been on a plane that originates or [00:16:00] terminates in the United States, you are likely aware you are limited to two carry-ons, that you must listen to and comply with crew instructions, and for example, that it is unlawful to tamper with or disable the smoke detector in the lavatories.

All of those rules, and others to be fair, are imposed by the FAA in the form of regulations. The FAA has enacted regulations that prohibit the tampering with or disabling of smoke detectors. And if you do, then you'll face criminal punishment. Some of you might realize that doesn't Congress have the authority to enact to the laws? And that yes, it does.

Congress has the authority to enact laws. But in the FAA example, it has granted the FAA kind of the pseudo legislative authority to enact regulations, different from [00:17:00] statutes, to be clear, because Congress simply cannot, Likely should not as many argue, be in the business of enacting every small little detail in the law.

We never get anything done because, well, Congress can't seem to pass anything in this era. It doesn't make sense for Congress to pass laws that regulate every little thing on planes, right? Everything from seat belts, to the number of carry-ons, to the required leg room, to crew and pilot training standards.

Congress should not be in the nitty and gritty there, rather it defers to the experts, the Federal Aviation Administration to create those standards. And this principle is called delegation. Congress can delegate its authority to make laws to the executive branch via what's called rulemaking authority.

But the Supreme Court has been somewhat clear on this point. Congress cannot delegate unfettered [00:18:00] or unbounded authority to the president. That would violate the separation of power's principle, so structured into our constitution. See, under the delegation or non delegation doctrine, as it's generally referred to, Congress must lay down by legislative act, what's called an intelligible principle, to which the person or the body authorized within the executive branch is directed to conform.

In other words, Congress must say, in whatever that Congressional act is, Congress must provide that the executive branch person or body, like an administrative agency, it must provide them with some guidance and boundaries to their powers. Congress must meaningfully constrain the President's authority given to him by Congress via that statutory act.

So what's an example of this? [00:19:00] Let's go back to the FAA for a second. I mentioned that the FAA regulates air transportation airspace, et cetera. That's their intelligible principle. The FAA is tasked with regulating the airline industry. It would not make sense for the FAA to regulate, say, water pollution.

That's the EPA, the Environmental Protection Agency's job. Thus, the FAA doesn't have this kind of unfettered or unbounded authority, right? It is actually fettered. It is bounded to the airlines, air travel, air transportation, airspace, et cetera, and nothing more. It is restricted to the air. So the plaintiffs in this trade case claim against the tariffs that when Trump imposed these broad, unilateral tariffs on all foreign countries, that he actually acted outside of his legal authority under the [00:20:00] I-E-E-P-A because , Congress did not give him the authority to impose broad unilateral worldwide tariffs. And even if it did, that would be unconstitutional because there's no intelligible principle there.

There's nothing that limits the president. It is unconstitutional for Congress to delegate, unfettered or unbounded authority because that would violate the separation of powers. Again, the power to tax is with Congress, but the plaintiffs invoked another doctrine, what's called the Major Questions Doctrine.

And under the major Questions doctrine, it says, when Congress delegates powers of vast economic and political significance. Congress must be clearly. Some legal scholars trace the major questions doctrine back to the 1980s with what is commonly referred to as the benzene cases. But the term [00:21:00] Major questions doctrine is a relatively new invention only recently catching on amongst the courts and legal scholars.

But I think most scholars would agree with me on this, that the fundamental purpose of the major questions doctrine is to constrain administrative agency actions. Some actions are simply of too great significance. Both economically and politically. We want Congress, the people's branch, to expressly and clearly and unambiguously state that the administrative agency could do whatever it is that they're trying to do.

So the major questions doctrine has been a frustrating judicial constraint to many presidents. For example, conservative states such as Missouri invoked the major questions doctrine on President Biden's student loan forgiveness plan. Now to be clear, that would be President Biden's [00:22:00]initial student loan forgiveness plan, the one that said, we will forgive $10,000 to all borrowers unless you qualify for a higher level of forgiveness, then you would get $20,000 of forgiveness.

Conservatives argued that Biden's student loan forgiveness plan, the one that the U United States Supreme Court ruled on, would cost approximately 450 to $500 billion. And at the sheer economic size of this plan, according to the conservatives, congress must clearly give the president the legal authority to forgive this much. And President Biden, however, invoked what's called the Heroes Act, saying that his administration had the legal authority to forgive 10,000 to $20,000 per borrower under the provision that says, quote, waive or modify end quote in the Heroes Act. Now, the Supreme [00:23:00] Court, as you may know, ultimately disagreed and said that the waive or modify provision is not Congress speaking clearly.

The plaintiffs in the tariffs case have argued that the Trump administration's interpretation of the IEEPA transforms the IEEPA into an impermissible delegation of power because the president's assertion of authority here has no meaningful limits, essentially enabling him, to impose any tariff rate that he wants on any country at any time for virtually any reason or no reason at all.

And if we subscribe to the President's interpretation, then in, these are my words that would run so afoul of the Constitution because the Constitution is clear. Again, Congress has the authority to impose tariffs under its taxing power, not the President of [00:24:00] the United States. I argue that if the United States Supreme Court considered Biden's student loan forgiveness plan as something that was too economically and politically significant as to trigger the major questions doctrine, then almost certainly the same goes for the broad, worldwide unilateral Trump tariffs. In fact, I argue that the Trump's invocation of the IEEPA is even more offensive to the Constitution because the power clearly does not belong to him. It belongs to Congress. It says so right there in Article one. And the economic effects of Trump's tariffs here are way more

than Biden's student loan forgiveness plan, and in both circumstances, biden's student Loan Forgiveness Plan and Trump's tariffs, with Trump's worldwide 10% tariffs and Biden's broad [00:25:00] student loan forgiveness Plan, Congress has spoken no more clearly in the IEEPA than it did in the Heroes Act.

Now to be clear, trump can still impose the tariffs under some other legal authority, just not according to the International Trade Court, just not under the IEEPA. Some other Congressional Act may give him the statutory authority to impose these tariffs, and the ruling from the International Trade Court is, to be crystal clear, that Trump can't impose these tariffs under or via the IEEPA, that law does not give him the authority.

That said, Trump has chosen to appeal the decision instead of trying another pathway, invoking another law besides the IEEPA. And as I mentioned, a federal appellate court has stayed, that's an official term, stayed the International Trade [00:26:00] court's ruling.

To be clear, this doesn't mean that Trump wins. This is merely a procedural matter. Courts often stay, or in other words, pause the lower court's ruling as the appellate process plays out. That is completely normal. We see that all kind of all the time, and that is what is happening here. The appellate court said that it was going to pause the trade court's ruling effectively allowing Trump's worldwide tariffs to go into effect until the appellate court gets to rule on the substantive arguments advanced by these plaintiffs.

So we wait. We wait for the appellate court to weigh in, and I'd expect the case to eventually get appealed to the United States Supreme Court. More after this.

[00:27:00] Thank you for listening to Discourse. We are excited and honored to announce that you all have put us in the top 60 of News Commentary, podcasts in the United States. On Apple Podcasts. So thank you once again. We'd like to continue making this podcast available to you without commercials. To help us continue this work commercial free, please join us as a subscriber and support us with a monthly contribution.

Visit discourse pod.org and click the support button today.

President Trump, of course, did not take the news well. He posted on truth social quote. The horrific decision stated that I would have to get the approval of Congress for these tariffs. If allowed to stand, this would completely destroy the presidential power. The presidency would never be the same. This decision is being hailed all over the world by every country [00:28:00] other than the United States End quote.

Stephen Miller, one of Trump's senior advisors, and the deputy Chief of staff to the president, called the trade court's ruling a judicial coup. And he claimed that we are living under a judicial tyranny. End quote. And I've talked about Stephen Miller in the past. If only Steven Miller knew what the heck he was talking about.

Both Trump and Miller are just plainly wrong, both express opinions that are far removed from the law and American legal and constitutional principles. Let me explain. Whenever the president invokes a statute as his legal authority to do something, and in this case it's Trump invoking the I-E-E-P-A, the federal courts have every constitutional right and in fact, some may say duty, to review the president's action against the statute that he invokes to determine whether the [00:29:00] president interpreted the statute correctly. It is the court's job to interpret the law. That means it is the court's job to determine what a statute means, the extent of the statute's language, and other. And this is precisely what the trade court did in this case.

Trump invoked a federal statute, the IEEPA plaintiffs who allege that they would be economically injured by the tariffs, Well, they filed suit and they argued that Trump's interpretation of the federal statute, the IEEPA, is incorrect and in fact unconstitutional. The trade court, in doing its job interpreting the law, ultimately agreed, and this is completely normal for the courts to do. They do this day in and day out. This is literally their job.

So to Steven Miller, this is not a judicial [00:30:00] coup, and frankly, it's irresponsible to state or imply that it is, because that is grossly misleading. This is not a judicial coup.

This is simply the federal courts executing their constitutional duty and authority. Full stop. And I find it very, very rich that when you, Stephen Miller want courts to do exactly what they've done here, when the Democrat is in the White House. After Trump's first term,

stephen Miller founded an organization called America First Legal Foundation. And America First Legal pursued legal actions against the Biden administration, including those related to student loan forgiveness. America First Legal Foundation filed countless briefs, opposing Biden's presidential actions. But now that Trump is in the White house, Miller apparently advocates for unchecked presidential power.

[00:31:00] Trump should be allowed to do whatever it is he wants. And that any attempt to check Trump's presidential power in the federal courts, which is their constitutional duty and authority, as I mentioned, is somehow judicial tyranny. Even if we say that it is judicial tyranny, then Miller sought judicial tyranny under President Biden.

Stephen Miller wanted the courts to strike down President Biden's actions but refuses to acknowledge that the courts can do the same to Trump. That his hypocrisy at its finest.

Now, Trump claims the decision will radically change the power of the president except. Except no president has ever tried to invoke the IEEPA or any other law to impose such broad, unilateral, worldwide tariffs on every country around the world.

If anything, it is Trump. I. Who seeks to [00:32:00] change the power of the presidency by claiming that he does have this unchecked, unfettered authority to impose these tariffs and that the courts can't interfere with that. In other words, Trump seeks to expand presidential power. Even if we set that aside for a second, the last six months of judicial rulings that have been adverse to Trump's executive actions are no different than what federal courts have done for past presidents. The federal courts restrained President Bush. The federal courts restrained President Obama. They did the same for Trump during his first term.

And for President Biden. Guess what? None of those judicial actions taken during those administrations, quote, completely destroyed, to use Trump's language, the presidential powers. To me, this is just another example of Trump's desire to rule authoritatively with the stroke of a pen, or in [00:33:00] this case a fat black Sharpie and executive orders.

Our government was never designed to run this way, by executive orders only. The framers created a system of governance that separated power into three branches of government. With each branch having the authority to check each other. In seeking unchecked presidential power is plainly offensive to the Constitution and the system of governance that the frameworks created.

You don't have to take my word for it. Take one of Trump's lawyer's words for it. Ty Cobb, a lawyer who represented Trump in the Special Counsel investigation during his first term said, according to the New York Times, that Trump's attack on judges is an attempt to undo the separation of powers. It is an attempt to take what is three co-equal [00:34:00] branches and make it one dominant branch end quote.

Conservative lawyers like Ty Cobb are coming out against Trump's actions and countless other staunchly conservative lawyers have put their names on lawsuits against the Trump administration for presidential overreach and abuse. Like, for example, in Harvard's case, against the Trump administration, which is currently in the courts as we speak.

But we'll reserve that Harvard lawsuit for future episode regarding the First Amendment. Until then, that's all for today, and thank you for listening.

 That's it for today's episode of Discourse. Thank you for tuning in and being part of the conversation. You can catch future episodes of discourse wherever you get your podcasts. If you found this discussion insightful, be sure to subscribe, leave a review and share it with [00:35:00] others who value thoughtful analysis over the noise.

You can also join the conversation by visiting discourse paw.org and following me on x and blue sky at Prof Unger for more insights and updates. Until next time, keep thinking critically, stay curious and engage with respect. We'll see you soon.

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