New Trump Trade Action Will Face Day in Court, Lawyers Say
After President Donald Trump announced his sweeping tariff action on China under the International Emergency Economic Powers Act, as well as now-delayed IEEPA tariffs on Mexico and Canada, trade lawyers told us to expect the duties to be challenged in court. Matt Nicely, lead counsel in the ongoing case against tariffs imposed on China during Trump's first administration, said in an email that a legal challenge is coming, a sentiment echoed across the trade bar.
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IEEPA is a broad statute, empowering the president to "nullify, void, prevent or prohibit" any "importation or exportation of" any "property in which any foreign country or a national thereof has any interest" in order to address an "unusual and extraordinary threat."
But Michael Roll, partner at Roll & Harris, said during a webinar that a resulting legal challenge could contest whether Trump has appropriately identified there to be an "unusual and extraordinary threat." In his executive orders imposing the tariffs, the president said the duties are needed to induce compliance from China, Canada and Mexico in combating the flow of fentanyl and migrants into the U.S.
Roll said the questions for a judge will be if the tariff is an "appropriate" means to address the crisis and if an "unusual, extraordinary threat" exists. He added that the likelihood of success on this claim is slim, since "judges typically are hesitant to get into those kinds of judgment calls, believing it's typically the President's call whether he gets it right or gets it wrong."
Perhaps complicating Trump's expected defense of the tariff moves is the fact that his executive orders state one justification for the duties, while the man himself offers various different reasons for the measures publicly. For instance, Trump has suggested that the tariffs are also being imposed to address trade deficits and Canadian banking regulations.
Mona Paulsen, assistant professor of law at the London School of Economics Law School, noted this discrepancy in a social media post, writing that it seems like "the lawyers have a carefully thought-out justification that a key political figure ignores."
Nicely added that he hopes the discrepancy between Trump's official justifications for the tariffs vs. his public ones will make the duties more difficult to defend. Nicely also noted that the president is "invoking national emergency, not national security" -- an "important distinction" for "some judges."
John Peterson, partner at Neville Peterson, also said any impending lawsuit is facing a steep uphill climb, though he rooted his pessimism in the 1975 case Yoshida International v. U.S. -- the only instance of a court reviewing presidential trade action taken under a broad grant of authority to address national security.
While Trump's new tariffs are the first use of IEEPA to levy duties, President Richard Nixon used the Trading With the Enemy Act (TWEA), IEEPA's predecessor, to impose a 10% duty surcharge on all imports to address a balance of payments crisis. The surcharge was challenged in federal court, succeeding at the trial level but ultimately losing on appeal (see 2412120075).
The appellate court said Nixon's duties under TWEA weren't an unconstitutional delegation of power, since they were "limited in time and scope," Peterson noted. The decision from the Court of Customs and Patent Appeals said that while such a "broad grant may be considered unwise, or even dangerous, should it come into the hands of an unscrupulous, rampant President, willing to declare an emergency when none exists, the wisdom of a congressional delegation is not for us to decide." Peterson took this language to mean that any check on presidential tariff power under IEEPA has to come from Congress and not the judiciary.
Another question surrounding future litigation concerns the availability of injunctive relief. Roll says don't count on it.
"I don't think it's going to be a court that's going to order customs and the government to not collect these or to cease from collecting," he said. "That's probably a bridge too far." Roll invoked the ongoing Section 301 litigation as evidence of this theory, noting that any relief in that case will take the form of refunds. Similarly, "litigation is not going to be, in my mind, any kind of short-term solution," Roll said, declaring that it would be "more of a refund opportunity."
Peterson agreed, adding that a plaintiff would have to show "irreparable harm" to get an injunction. This standard isn't cleared by a party just having to pay money, Peterson said.