As I predicted and hoped the Supreme Court has struck down President Trump’s tariff regime imposed since he became president. Amy Howe comments at SCOTUSBlog:
In a major ruling on presidential power, the Supreme Court on Friday struck down the sweeping tariffs that President Donald Trump imposed in a series of executive orders. By a vote of 6-3, the justices ruled that the tariffs exceed the powers given to the president by Congress under a 1977 law providing him the authority to regulate commerce during national emergencies created by foreign threats.
The court did not weigh in, however, on whether or how the federal government should provide refunds to the importers who have paid the tariffs, estimated in 2025 at more than $200 billion. In his dissenting opinion, Justice Brett Kavanaugh suggested that the federal government “may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others.” Moreover, he added, “[b]ecause IEEPA tariffs have helped facilitate trade deals worth trillions of dollars—including with foreign nations from China to the United Kingdom to Japan, the Court’s decision could generate uncertainty regarding various trade agreements. That process, too, could be difficult,” Kavanaugh warned.
Let’s not lose sight that there are two issues: the legal one and the policy issue. As Justice Kavanaugh went on to note the Court has only ruled on the legal issue.
The Congress may yet act in support of Trump’s tariffs with appropriate legislation. As the Court decided, that is its prerogative.
For the last 30 years or more we have embraced a neoliberal agenda, the “Washington consensus”, which included the presumption that unilateral tariff reduction is always beneficial regardless of trading partner behavior. I do not see how we can stubbornly insist on free trade by the United States while China maintains a mercantilist policy of quotas and export subsidies without threatening our economic strength, the downstream military power that rests on that strength, and, ultimately, our freedom.
Free trade is sustainable when it is reciprocal. It is destabilizing when it is unilateral.
