12 States, US Spar on Standing, Whether Tariffs Relate to Emergencies in Briefs Before Hearing
Twelve U.S. states challenging all tariff actions taken under the International Emergency Economic Powers Act traded briefs with the government on the legality of the tariffs ahead of a May 21 hearing on the states' motion for summary judgment and a preliminary injunction. The parties sparred on whether the eight states that didn't act as direct importers have standing to challenge the tariffs, whether the IEEPA tariffs have a reasonable connection to the declared threats of trade deficits and the flow of fenantyl, and whether the term "regulate" in the statute confers the power to impose tariffs (The State of Oregon v. Donald J. Trump, CIT # 25-00077).
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In its opposition to the states' motion, the U.S. said the non-importer states lack Article III standing to challenge the tariffs. The government said judgment should be entered against the states that don't directly import products: Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York and Vermont. The government said prices are set by independent actors and "informed by multiple, complex market forces." As a result, the states can't "reasonably infer that importers will uniformly pass on not just these costs but also any savings" to consumers, including these eight states.
In response, the 12 states said the government doesn't dispute that four of the states "directly have standing," making its objection to the other states' standing "academic." The U.S. also doesn't dispute that the non-importer states "have suffered an injury in fact." The government only disputes that those states' injuries aren't traceable to the tariffs or redressable by the Court of International Trade, but the trade court rejected this very claim in Invenergy Renewables v. U.S.
As both CIT and the U.S. Court of Appeals for the Federal Circuit have held, "standing is not limited to importers of record" but can arise due to "'economic injury' on non-importers that is traceable to the challenged tariff and redressable by an injunction," the brief said.
The U.S. also defended the relationship the tariffs have to the declared emergencies and argued that the issue of whether the emergencies are "unusual and extraordinary" is a political question immune from judicial review. The government said if the court disagrees with it that the court should have no role in reviewing the declaration of an emergency or whether the measures chosen to deal with the emergencies are necessary, the court should only look at whether the "President’s chosen means are reasonably related to the national emergency."
Regarding the use of reciprocal tariffs to address the emergency of trade deficits, the government argued that tariffs have a "direct effect" on the trade deficit and improve on the nation's domestic production capacity, military readiness and national security posture. Regarding the tariffs imposed on China, Canada and Mexico to address the flow of fentanyl, the U.S. said the tariffs "have fostered ongoing negotiations to address the country-specific emergencies." The brief cited steps taken by the Mexican and Canadian governments immediately following the initial imposition of the tariffs to address the "illicit drug crisis" as evidence of this leverage working.
In response, the 12 states first said the court can apply "judicially manageable standards to determine whether the tariffs 'deal with' the fentanyl crisis and the trade deficit," since the court must ask whether the actions are "tailored to address the threat, and only the threat, directly."
On the trade deficit, the U.S. said the 10% baseline tariffs and the reciprocal tariffs "have no basis in economic reality as a response to the trade deficits between the United States and its various trading partners." In addition, Trump has "repeatedly boasted that the tariffs are being used for 'other purpose[s]' than remedying the persistent trade deficit," the brief said.
Regarding the tariffs on China, Canada and Mexico, the tariffs don't bear a "reasonable connection to the fentanyl crisis." The tariffs aren't targeted at fentanyl or related products or other aspects of illicit drug trafficking," but instead apply to nearly all goods from the covered nations "regardless of whether any particular good has a reasonable connection to fentanyl or drug trafficking."
And tariffs imposed for the sake of leverage don't "deal with" the crisis, the states said. "Indirectly inflicting generic economic harm on foreign producers in the hope that they will pressure their governments into taking unspecified actions against fentanyl trafficking runs far afoul of" IEEPA's limitation that the statute's powers not be used for "any other purpose" other than directly dealing with the threat, the brief said. "Defendants cannot claim that the tariffs are tailored to address drug-trafficking or the importation of fentanyl."