The government’s case in Learning Resources rested on IEEPA’s provision that allows the president to “regulate … importation or exportation” of “property in which any foreign country or a national thereof has any interest” in the event of a national emergency. Trump had invoked the law last year when issuing a series of executive orders that imposed punitive tariffs on Canada, Mexico, and China to address alleged failures to stop drug trafficking, setting a flat 10 percent minimum tariff on imports from almost every other country, and adding further “reciprocal” tariffs on dozens of countries that the White House believed had engaged in unfair trade practices.
The Supreme Court majority’s reasoning was straightforward: IEEPA does not mention the word “tariff,” has never been used to impose tariffs, and therefore could not be interpreted as giving the president nearly unlimited power to unilaterally set tariff rates.
“We decide whether the International Emergency Economic Powers Act (IEEPA) authorizes the President to impose tariffs,” Roberts wrote in the first sentence of the majority opinion. “Based on two words separated by 16 others in Section 1702(a)(1)(B) of IEEPA—‘regulate’ and ‘importation’—the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time. … Those words cannot bear such weight.”
All six justices in the majority agreed on that basic point. But they split on the “Major Questions Doctrine”: the principle, popular among conservative lawyers and judges, that Congress must be clear and explicit when delegating important powers to the executive branch. While Barrett and Gorsuch signed on to Roberts’ argument that Trump must “point to clear congressional authorization” to impose tariffs, the three liberal justices did not.
Liberal justices have tended to distrust the Major Questions Doctrine as a theory of interpretation, arguing that it expands judicial power at the expense of federal agencies and regulatory expertise. Justice Kagan wrote in her concurrence, for example, that “straight-up statutory construction resolves this case” for her, and that she needed “no major-questions thumb on the interpretive scales.”
The chief dissent was authored by Kavanaugh. “Like quotas and embargoes, tariffs are a traditional and common tool to regulate importation,” he wrote, arguing that previous 20th-century laws granting the president the authority to impose tariffs meant that Congress would have intended regulation to include the tariff power as well. Kavanaugh separately argued that courts should not apply the Major Questions Doctrine to foreign affairs, a position consistent with his broader view of executive primacy in that domain. “Although I firmly disagree with the Court’s holding today, the decision might not substantially constrain a President’s ability to order tariffs going forward,” Kavanaugh concluded, “because numerous other federal statutes authorize the President to impose tariffs and might justify most (if not all) of the tariffs at issue in this case—albeit perhaps with a few additional procedural steps that IEEPA, as an emergency statute, does not require.”
Trump himself seemed to agree, noting in his Friday afternoon press conference that Kavanaugh’s “stock has gone so up.” The president vowed to continue his tariff policies regardless, using different mechanisms that already have congressional approval: Sections 122 and 301 of the 1974 Trade Act, and Section 232 of the Trade Expansion Act of 1962.
On Friday, the White House invoked Section 122, which allows the president to impose tariffs to combat “large and serious” balance-of-payments deficits, to impose a 10 percent across-the-board tariff. One day later, that number was bumped up to 15 percent—the maximum allowable under the law.
While Section 122 tariffs require congressional reauthorization after 150 days, Kathleen Claussen, an expert in international trade law at Georgetown University Law School, told TMD, “I don’t see any legal barrier to the President on day 151, declaring, again, that 122 is in place.”
On Friday, U.S. Trade Representative Jamieson Greer issued a statement declaring that his office would immediately begin investigations under Section 301 of the 1974 Trade Act, which allows the president to impose tariffs after an investigation finds that a given country is engaging in unfair trade practices. Almost all of the tariffs against China fall under this authority and have withstood legal challenges—and Greer believes it could “cover most major trading partners,” hitting a range of potential concerns.
Greer said tariffs under Section 232 of the Trade Expansion Act—which grants the president broad authority to impose tariffs on imports deemed important to national security—will also be maintained and possibly expanded. The White House has already used this authority to set tariffs on steel, aluminum, automobiles, and lumber, among other products.
All of these authorities are on much firmer legal footing than IEEPA tariffs, Timothy Meyer, an expert on international trade law at Duke University School of Law, told TMD. In Learning Resources, Meyer said, the court answered the question of “does the president have the power to impose taxes, basically, given that the statute doesn’t say anything about taxes.” He added that most of these other laws “actually do explicitly authorize tariffs.”
“I’ve heard everybody say the president is more constrained” following the court’s decision, Claussen, the Georgetown University Law School professor, said. “Factually, that is true, but as a matter of magnitude or scale, it’s not that much.”
That only three justices were willing to invoke the Major Questions Doctrine also bodes ill for those hoping that the theory will place further limits on the president’s economic powers, according to Scott Anderson, a fellow at the Brookings Institution and former attorney-advisor for the State Department. “In the context of major questions doctrine, obviously three justices think that a foreign relations nexus is not a barrier to application,” he told TMD. “There’s actually a bigger divide here between Kavanaugh and the other conservative justices that hasn’t fully been reckoned with,” on the question of the courts’ role in foreign affairs.
Friday’s ruling also left another major question unanswered: refunds. In its decision, the majority didn’t address whether the government was now required to issue refunds for the struck-down tariffs, or to whom. “Wouldn’t you think they would have put one sentence in there saying that keep the money or don’t keep the money, right?” Trump complained on Friday. “I guess it has to get litigated for the next two years. … We’ll end up being in court for the next five years.”
Some companies, such as the Toyota Group affiliate Toyota Tsusho, have already sued the U.S. government seeking relief for paying import duties. Claussen noted that there’s precedent here, as many of the tariffs imposed on Japan last year were refunded following the U.S.-Japan trade deal in the fall. But as of now, the White House is waiting for further orders from the courts. “We’ll follow whatever they say to do,” Greer told Fox News on Sunday.
There is also the matter of countries that have agreed to trade deals over the past year that include tariffs above 15 percent. On Thursday—one day before the court issued its decision—Indonesia signed a U.S. trade agreement that included a 19 percent tariff rate. CNBC reported on Sunday that India, which had agreed to an interim deal earlier this month that set the tariff on Indian imports at 18 percent, would be rescheduling meetings with the U.S., set for this week, that were intended to finalize the deal.
It’s unclear whether these commitments still hold. “That’s the one that countries are asking me, with IEEPA having fallen,” Claussen told TMD—not just whether they need to uphold their end of the bargain, but what the U.S. is now offering in return.
For small business owners like Bigglestone, it’s unclear whether refunds would bring any relief at all, as his company mostly suffered from increased costs further up the supply chain. “My big ask is to make [refunds] happen as quickly as possible for the stakeholders, because they’re not going to give me that money back directly,” he told TMD. “I need you to give them some relief so that hopefully we’ll be able to get some relief too.”