Professor: Tariffs May Be Halted While Appeal Continues
Georgetown University law professor Jennifer Hillman said that while she expects the U.S. Court of Appeals for the Federal Circuit to take months to decide if the tariff actions under emergency powers weren't legal, the court might not stay the vacation of the orders during that time.
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She said we may know whether the stay will be longer term "even before the end of June."
Hillman was speaking on a webinar June 2 hosted by the Council on Foreign Relations, where she is a senior fellow.
"I think that’s a really close call," she said, whether the government has to stop collecting tariffs as the appeals process continues. "I think the better of the arguments is the Trump administration is not irreparably harmed if the duties are not collected," she said.
The threat of a possible victory for broad tariff powers provides the same leverage, whether the tariffs are currently being collected or not, she argued.
"The more irreparable harm is on the small businesses that are going to go out of business" because they cannot afford to pay tariffs on their imports, she said.
Hillman said that the appellate court has to consider who would suffer irreparable harm if the tariffs are halted, "as well as weighing what is the likelihood of success on the merits."
She said she thinks the Court of International Trade's reciprocal tariffs decision will be upheld, but the court's reasoning on why the tariffs on Canada, Mexico and China to combat fentanyl smuggling are outside the bounds of IEEPA isn't quite as strong.
Fellow Edward Alden, a business professor at Western Washington University, said he agrees that the case against the reciprocal tariffs ls stronger than the one on the fentanyl-related duties.
In response to a question from International Trade Today, Hillman said if the stay is removed, but the appellate court and/or Supreme Court eventually says the tariffs were legal, CBP wouldn't be able to go back and collect duties for entries that had been liquidated while the case was being decided.
However, given that there is nearly a year before liquidation, Hillman said there may be "very many" entries that enter without the 10%, 25% or 30% duties, that then will owe the money to CBP.
Hillman said she's not sure if the Supreme Court will take the case, if it likes the CAFC reasoning on principles the Supreme Court has laid out on the limits of executive power.
She said, "The Supreme Court may say there's no reason to review this, because they’ve gotten it right."
Still, she said, given how significant the actions were, and the case is, "it’s far more likely than not the Supreme Court would take this up and would consider this issue."
One listener asked what if the administration decides to collect tariffs anyway if the stay is lifted, or if it loses on appeal?
Alden said that although the administration has quibbled on the meaning of rulings to bring back immigrants who were removed from the U.S., he said, "so far the administration has hesitated to be in open violation of a court’s ruling."
He predicted, "They’re not prepared to go that far."
Hillman said CIT's language, "the challenged tariff orders will be vacated, and their operation permanently enjoined," is so clear that violating that order would be equally clear.
CFR Trade Policy Fellow Inu Manak agreed. "I don’t think they will openly ignore a court ruling," she said, particularly since a loss in this case doesn't mean the administration has to stop hiking tariffs without congressional involvement. "This just takes away just one of the toys Trump can play with," she said.
Commerce Secretary Howard Lutnick supported that argument on Fox Business News on June 1, when he said, "Rest assured, tariffs are not going away; he has so many other authorities, that even in the weird and unusual circumstance where this was taken away, we just bring on another or another or another."
She said that at least while these tariffs are being collected under the stay, there's little need for the administration to turn to Section 122 to impose 15% tariffs over the trade deficit, or to begin the process of making the case that countries are discriminating against U.S. commerce, which could result in an up to 50% tariff on their goods (or some of their goods).
She said it's more likely that the administration expands existing trade remedies, such as when the president announced May 30 that he would be doubling the Section 232 tariffs on steel and aluminum. "He could also expand and modify his Section 301 tariffs," or hike the auto tariffs.
"We have a lot of pending [232] investigations, seven in total," she said. "Some of those will be fast-tracked a little bit."