Rather than looking at the Constitution, the history, the law, and the facts, many automatically assume President Trump will not prevail at the Supreme Court or anything else, but what else is new?
Last week, Supreme Court pundits and watchers were convinced the Justices were set to overturn President Trump’s global tariff policy because several of them equated tariffs with taxes and declared that the taxing power resided solely with Congress under Article 1, Section 8 of the Constitution. During oral arguments, Chief Justice John Roberts put it this way in a widely circulated remark, “Yes, of course, tariffs deal with foreign powers, but the vehicle is the imposition of taxes on Americans, and that has always been a core power of the Congress.” Though he expanded on this idea later, noting, “The tariffs are a tax and that’s a core power of Congress. But they’re a foreign-facing tax, right? And that –foreign affairs is a core power of the executive. And I don’t think you can dismiss the consequences. I mean, we didn’t stay this case. And one thing is quite clear, is that the foreign-facing tariffs have been quite effective in achieving a particular objective. So I –I don’t think you can just separate it. When you say, well, this is a tax, Congress’s power, it implicates very directly the President’s foreign affairs power,” the initial remark and additional skepticism expressed by Justices Neil Gorsuch and Amy Coney Barrett in particular was enough to convince many if not most that the tariffs would be struck down in short order. Incredibly, none of the pundits or legal analysts I’m aware of bothered to reference what Article 1, Section 8 actually says on the matter, the history of tariffs in general, or what we might glean from how they have been perceived over time. If they did, they’d discover, likely to their shock that tariffs are not directly mentioned in the Constitution in the first place. Instead, it only says, “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States, but all Duties, Imposts and Excises shall be uniform throughout the United States.” Though taxes and duties are frequently considered synonyms for tariffs, there are subtle differences in both their application and their purpose. Taxes generally apply to individuals, businesses, and transactions universally and within a domestic economy to generate reliable and consistent revenue to fund the government. Tariffs, in contrast, are more narrowly targeted at specific goods or categories of goods, and are used primarily to regulate trade, protect domestic industries, and apply pressure to foreign countries in the modern era rather than simply raise revenue. Duties, meanwhile, are also more general taxes and fees on goods that cross borders, used for either revenue generation or general compliance. Imposts are considered similar to duties and excises function internally, an indirect tax on goods, services, or activities within the domestic economy.
While many will undoubtedly insist the similarities between tariffs and taxes and tariffs and duties implies they are covered under either or both, and it is clear that for more than a century tariffs were passed by Congress, two things come to mind. First, the Founders are generally known to be precise with their language, having debated over the text of the Constitution for four months before beginning the ratification process. That the word does not specifically appear, nor does it seem to have been debated directly during the Convention itself should be considered at least somewhat meaningful, especially when the term was used widely at the time, bringing us to the second point. The first law regarding tariffs was passed shortly after the Constitution was ratified and even in those early days of the Republic, was clearly labelled as a tariff, not a duty, impost, or excise tax, suggesting that they differentiated at some level between these different mechanisms, even if tariffs only originated in Congress in the early days of the Republic. In fact, the Tariff Act of 1789 was Congress’ the first major legislative achievement, levying a $.50 per ton duty on goods imported foreign ships, $.30 on American ships owned by foreign powers, and $.06 on ships owned by Americans. At the time, it served three key purposes, raising revenue to support the government, pay down the debt incurred during the Revolutionary War, and prioritize US industry, setting the stage for a pattern that would continue throughout the 19th century, where tariffs served a dual role as a primary way to raise money and foster growth. Like most other initiatives in the early days of the Republic, the act was hotly debated, the result of a compromise between the North and the South in a country that just fought a war at least partially over taxes, and not surprisingly, it was updated frequently over the next few years which should also make clear that tariff rates were never chiseled in the proverbial stone. Between 1792 and 1816, there were twenty five follow up tariff acts passed, and as the 19th century progressed, tariffs tended to become both more onerous and more politically explosive. The Tariff of 1828 set a 38% tax on certain finished goods and a 45% tax on certain raw materials, but was immediately vilified in the South. There, it became known as the Tariff of Abominations because Southern states tended to rely on finished goods rather than being able to manufacture their own. The outrage was enough to set off the first nullification crisis until Andrew Jackson, a Southerner himself declared “Union or death” and threatened to enforce the law with military force. The South did go on to score a practical victory, however, as the tariff rate on imported goods was reduced over ten years to between 15% and 20%.
The decades leading up the Civil War proved much the same. The Tariff of 1832 eliminated some features of the 1828 act that were disliked in the North, but increased rates on other products and raw materials like woolens. A compromise the following year gradually reduced the rates overall at two year intervals until they reached 20%, but then the Tariff of 1842 reverted back to the levels of the Abominations, continuing the back and forth, constantly changing with the politics and the needs of the day theme. There were subsequent and dramatic revisions to the tariffs again in 1846 under President James K. Polk, who formed an anti-tariff coalition that sought to use them for “revenue only” and 1857, which greatly reduced the overall burden. This was at least partially because Jackson himself had reduced the need to rely on tariffs for revenue by being the only President in US history to fully pay off the debt. Unfortunately, this only served to increase the political schism around tariffs in general. With revenue no longer as much of a priority, the focus turned to protecting industry, leading the Northern manufacturing base to demand higher tariffs on finished goods which remained anathema in the South. After losing the Civil War, the South’s political power was greatly reduced for a time and tariffs began increasing again for protective purposes, primarily on iron, steel, and wool once again. Rates reached 40-50% during the war itself and continued afterwards for several decades over objections from detractors. Grover Cleveland, the lone Democrat to occupy the White House during this period, attempted to change this trajectory, insisting that tariffs were inherently corrupt, antithetical to republican government and inefficient, but his coalition of Southerners and Westerners wasn’t enough to turn the tide. As he argued, “When we consider that the theory of our institutions guarantees to every citizen the full enjoyment of all the fruits of his industry and enterprise… it is plain that the exaction of more than [minimal taxes] is indefensible extortion and a culpable betrayal of American fairness and justice,” then-Congressman and future-President William McKinley shot back, “Free foreign trade gives our money, our manufactures, and our markets to other nations to the injury of our labor, our tradespeople, and our farmers. Protection keeps money, markets, and manufactures at home for the benefit of our own people.” At least partially because of the issue, Cleveland lost the argument soundly enough that he lost the overall election of 1888, but the back and forth continued, both for tariffs and his own political career. The backlash against the McKinley Tariffs of 1890 swept Cleveland back into office and then the Wilson-Gorman Tariff Act of 1894 lowered rates once again, though Cleveland himself refused to sign it.
After McKinley ascended to the Presidency in 1897, rates rose again to the 50% level and Teddy Roosevelt, who assumed the role upon his assassination, deemed the topic too controversial to touch, fearing it would tear apart the Republican Party. In perhaps this one and only area, his successor, President William Howard Taft was bolder and he sought to lower tariffs, ending with a compromise bill that reduced rates on products for Midwest farming while raising them on items favorable to the Northeast. While the debate likely would have raged continually from there, the passage of the income tax in 1913 opened up a new revenue stream that greatly reduced the importance of tariffs in general and rates were reduced the following year under the Underwood Tariff. Regardless, rates went up again in 1922 and in 1930 thanks to the infamous Smoot-Hawley Tariff Act, which was said to greatly exacerbate the Great Depression. In the aftermath, Congress began the process of using tariffs to seek fair trade agreements in a precursor to the Trump Administration approach and empowering the President to negotiate rates with countries without requiring specific legislation. Under the Reciprocal Tariff Act of 1934, 32 bilateral trade agreements were negotiated by 1945, solidifying the idea that more trade is better for both sides of the deal. This trend continued after World War II with the establishment of the General Agreement on Tariffs and Trade in 1947, known as GATT which ultimately went on to become the World Trade Organization in 1994, between capitalist countries seeking free trade or at least uniform tariff rates. Generally speaking, tariffs fell out of favor during this period, though there were several instances where Presidents used them or similar means to protect US industry. In 1963, President Lyndon Baines Johnson claimed GATT authorized him to levy a 25% tariff on imported light trucks, potato starch, dextrin, and brandy, an executive order known as the “chicken tax” because Germany was believed to be blocking imported US poultry. This tariff actually remains in place today, though automakers have found ways to circumvent it and only the Ineos Grenadier Quartermaster is subject to the full 25%. While President Ronald Reagan was said to be adamantly against tariffs, he imposed tariffs on the European Economic Community in 1986 and a whopping 100% tariff on certain Japanese electronics in 1987. President Bill Clinton also imposed tariffs on luxury goods from Europe including items like Waterford crystal and Italian pecorino cheese and in 2000, imposed 10% tariffs on wire rods and 19% on line pipe imports over a certain quota. President George W. Bush also imposed tariffs on the steel industry, between 8% and 30%. President Obama did so on tire imports from China in 2009.
Crucially for the Supreme Court’s purposes, all of these actions since 1934 have been done unilaterally by the Chief Executive using executive orders. These Presidents have been able to do so because – as has been the case since 1934 – Congress has generally delegated this power to the President. Beyond the initial 1934 reciprocal trade legislation and the GATT, this delegation has occurred under various acts which are broadly worded and therefore can be construed to delegate broad powers. While President Trump is currently relying on the International Emergency Economic Powers Act (IEEPA) of 1977, which allows the President to directly regulate international commerce if they declare an emergency related to an “unusual and extraordinary threat … to the national security, foreign policy, or economy of the United States” which originates “in whole or substantial part outside the United States” there are several laws which directly delegate the tariff power. These include the Trade Expansion Act of 1962, Section 232, which focuses on the restriction of imports, and Trade Act of 1974, Section 201 which can be used to “safeguard” domestic industries and Section 301 which targets foreign practices that are unjustifiable, unreasonable, or discriminatory towards US commerce. Even before President Trump took office, it is estimated that about 30% of imports were subject to some form of tariff under these acts. As the National Constitution Center described the history of tariffs in the United States in general, “Tariffs are a form of taxes placed by the federal government on imported goods and services. The president does not have the direct power to set or impose tariffs on nations that trade with the United States, and can only take such action if a law is passed by Congress granting him such powers. But since the 1930s, Congress has delegated tasks such as setting tariff rates to the chief executive as part of his foreign policy and trade negotiation duties.” Furthermore, the legality of Congress delegating this power was affirmed by the Supreme Court as early as 1928, when J. W. Hampton, Jr. & Co. v. United States “confirmed the ability of Congress to delegate tariff powers to the executive branch. Chief Justice William Howard Taft rejected claims by J. W. Hampton, Jr. & Co. that a high tariff levied on it by the Coolidge administration violated a congressional statute, the Tariff Act of 1922. The statute provided that a president could adjust tariff rates after proper investigation and in response to changing production costs” to use the Constitution Center’s phrasing.
While none of this means the Supreme Court will not rule against the administration in this matter, it does make clear that there is a reasonable legal rationale supporting the President’s belief that he has this authority, one rooted in almost a century of law and jurisprudence. It also suggests that even should this ruling go against him, President Trump can issue much the same tariffs under a different statute, bringing us back where we started all over again. As I have previously insisted, these are issues best left between Congress and the Executive, the two elected branches of government, and that especially in light of the 1928 ruling, it is not up to the Supreme Court to “save” Congress because it chose to delegate too much power. Since it has not chosen to take it back, the lack of a choice is a choice in and of itself. Last but not least, it also goes to show that, not unexpectedly, the media and many pundits continue to believe that only the worst possible outcome for President Trump and the future of his Administration is likely. Rather than looking at the Constitution, the history, the law, and the facts, they assume he will not prevail based on cherry picking comments from the Justices, but what else is new?
Confessions of a Conservative Atheist 