“Number one, I don’t need them. I don’t need Congress {to impose tariffs}.”
– Donald J. Trump at a campaign rally in Pennsylvania (Sept. 23, 2024)
The 2024 U.S. Presidential Election cycle has seen renewed discussion of just how much tariff-making authority Congress has delegated to the executive branch. In addressing the prospect of an across-the-board tariff on imported goods advocated by former President Trump’s presidential campaign (as opposed to targeted tariff measures for leaving the U.S. dollar as reserve currency also advocated by the Trump campaign), commentators have identified a threshold question — does the executive branch have legal authority to do such a thing?
Answers have varied, with one camp asserting that the President has “clear authority” to do so while another contends “there is no ambiguity” that it would be overreach. On balance, while acknowledging the uncertainty inherent in untested legal approaches, there are grounds to believe that the Executive Branch has authority to impose universal tariffs. Such a tariff proposal should be taken seriously because a President could likely find a path to do it and defend such an action.
Where Does the Power Come From?
When it comes to imposing tariffs, the U.S. Constitution establishes that the “Power To lay and collect … Duties, Imposts and Excises …” and to “regulate Commerce with foreign Nations” rest with the legislative branch of our government. Art. I, § 8, Cl. 1, 3. Over the years, however, Congress has delegated substantial portions of its authority to the Executive Branch. Congressional delegations at centerstage of the debate over universal tariff authority are the International Emergency Economic Powers Act (IEEPA) (50 U.S.C. §§ 1701-1709) and Section 301 of the Trade Act of 1974 (Section 301) (19 U.S.C. §§ 2411-2420).
Diving Deeper: The International Emergency Economic Powers Act
IEEPA Section 1702 grants the President broad economic powers, while IEEPA Section 1701 limits the exercise of those powers to “deal{ing} with any unusual and extraordinary threat” to U.S. “national security, foreign policy, or economy” originating in substantial part outside the United States, with respect to which the President has declared a national emergency. The national emergency declaration must follow National Emergencies Act (NEA) (50 U.S.C. §§ 1601-1651) procedures, in addition to IEEPA-specific instructions for consulting with and reporting to Congress found in IEEPA Section 1703.
What Sort of Emergency Does IEEPA Require?
IEEPA makes the declaration of a national emergency based on an “unusual and extraordinary threat” to U.S. “national security, foreign policy, or economy” a prerequisite to Presidential action.
Prior to IEEPA’s existence, President Nixon’s Proclamation 4074 (1971) invoked Section 5(b)(1)(B) of the Trading With the Enemy Act (TWEA) to place a 10% ad valorem tariff on imports, with certain exceptions, in response to a “balance of payments” national emergency. However, this precedent is of limited usefulness, insofar as the TWEA, unlike IEEPA, did not incorporate language requiring that the declared national emergency constitute an “unusual and extraordinary threat” to U.S. “national security, foreign policy, or economy.” Indeed, the Supreme Court quoted IEEPA Section 1701(a)’s description of a qualifying “national emergency” in explaining how “the conditions…for the{} exercise {of authority under the TWEA and IEEPA} are different.” Regan v. Wald, 468 U.S. 222, 228 (1984).
An emergency declaration pursuant to IEEPA is thus arguably more open to legal challenge. Nevertheless, neither IEEPA nor the NEA defines “national emergency” or “unusual and extraordinary threat” to U.S. “national security, foreign policy, or economy,” and IEEPA’s direct relation to foreign policy, national security, and the economy increases the prospect that any legal challenge might ultimately be deemed by a reviewing court to be a political question and one that the judiciary would not second-guess.
The potential for this result in the judicial branch is heightened by the fact that the NEA expressly preserves Congress’ power to override national emergency declarations through a (veto-proof) joint resolution. It may have been for this reason that the petitioner in Dames & Moore v. Reagan, which challenged President Carter’s IEEPA actions, did not challenge the underlying emergency declaration. Dames & Moore v. Regan, 453 U.S. 654, 663 n.1 (1981).
Separately, the open-endedness of the statutory terms and link to foreign policy, national security, and the economy also gives the President wide discretion in defining both the threat and the actions that the President finds necessary to deal with the circumstances of the emergency. Although there is some indication that IEEPA’s emergency standard is higher than that of the TWEA, Congress nevertheless chose statutory language that leaves the President substantial room to maneuver in identifying a qualifying threat. With regard to what constitutes “unusual and extraordinary,” past IEEPA declarations offer guidance that indicate it is not an insurmountable bar. The statements of the candidates for President provide a sense of which circumstances each considers to be emergent (e.g., the U.S. border, authoritarian military aggression, supply chain security, etc.).
Once a qualifying emergency has been identified and declared, IEEPA places few procedural hurdles between a President and the implementation of their chosen response. Section 1703(a) obliges the President to “consult” with Congress “in every possible instance” before taking action and Section 1703(b) requires the President to transmit a report to Congress “immediately” upon taking action. Neither requirement appears onerous. “Consultation” is undefined and past Presidents have, at times, construed similar requirements very liberally. As for the report, broadly speaking, it surveys the nature of the emergency, necessity of the President’s chosen response, and the foreign countries impacted. For comparison, President Nixon’s TWEA emergency proclamation was made effective for entries the day after it was signed.
Congress could, of course, amend IEEPA to circumscribe Presidential authority or impose additional procedural requirements at any time, but the present statute appears to lack the objective thresholds necessary to conclude that an economic/security/political emergency of global reach could not lawfully be identified. Originally, IEEPA included a provision pursuant to which Congress could terminate the underlying national emergency via Concurrent Resolution, an unconstitutional procedure per INS v. Chada, 462 U.S. 919 (1983). Instead, under the NEA, Congress may extinguish a national emergency — and thus Presidential powers under IEEPA — via a veto-proof joint resolution. Congress never attempted to terminate an IEEPA emergency until 2023, but none of the attempts came close to succeeding. Indeed, no emergency declared under the NEA has been terminated without Presidential assent. Given the contentious subject matter that would likely underlie any emergency declaration in the near term, it would be difficult to expect a divided Congress to marshal the veto-proof support required by the NEA for extinguishment.
Do The Powers Conferred by IEEPA Include Imposing Universal Tariffs?
IEEPA Section 1702(a)(1)(B) empowers the president to “regulate … prevent or prohibit … importation … of … any property in which any foreign country or a national thereof has any interest.” In general, this has been applied as the baseline statutory authority for U.S. export controls and certain economic sanction regimes. Although IEEPA has never been used to impose tariffs on imports, then-President Trump threatened to impose tariffs on Mexican goods using IEEPA in 2019. U.S. v. Yoshida Int’l Inc., 526 F.2d 560 (C.C.P.A. 1975) indicates that the statute would most likely be amenable to that interpretation, but Yoshida also indicates skepticism concerning an entirely universal tariff action.
TWEA Section 5(b)(1)(B) contained language identical to IEEPA Section 1702(a)(1)(B). President Nixon relied on this portion of the TWEA to impose the universal 10% ad valorem tariff, with exceptions, discussed above. President Nixon’s tariff was sustained in Yoshida, which held that the TWEA permitted the President “to ‘regulate importation,’ by imposing an import duty surcharge or by other means appropriately and reasonably related…to the particular nature of the emergency declared.” However, the court also found significant Proclamation 4074’s “limited nature,” including its proviso capping the total increased duty rate for a given article at its HTSUS Column 2 rate. Such carve-outs, Yoshida reasoned, “resulted in a range of effective surcharge rates and duties” and obviated Constitutional concerns about the Executive Branch fixing duty rates “without regard to the statutory rates prescribed by Congress.” Yoshida, 526 F.2d at 577. IEEPA was enacted after Yoshida, and the Supreme Court described the relevant IEEPA language as being “directly drawn” from the TWEA. Dames & Moore v. Regan, 453 U.S. at 671 (eschewing the notion that Congress must expressly spell out each power given to the President).
Yoshida’s holding suggests that IEEPA’s economic powers would include the authority to impose tariffs to “deal with” a declared emergency, in the words of IEEPA Section 1701(b). Nevertheless, a court might invoke Section 1701(b)’s proviso that IEEPA powers “only be exercised to deal with” the declared emergency and “not…for any other purpose” to narrow an IEEPA action whose breadth appears to exceed the declared emergency. This would be one conceivable way to “impede an unreasonable or ultra vires exercise of…power,” as cautioned in Yoshida, 526 F.2d at 583, without ever questioning the emergency itself. In addition, even a tariff “dealing with” a declared emergency within the meaning of IEEPA Section 1701(b) may be vulnerable to Constitutional challenge if it were to conflict with statutory tariff rates.
Continued Use of Section 301 of the Trade Act of 1974
In relevant part, 19 U.S.C. § 2411 authorizes the U.S. Trade Representative (“USTR”) to take action to eliminate acts, policies, or practices of a foreign country that are “unjustifiable and burdens or restricts United States commerce” or “unreasonable or discriminatory and burdens or restricts United States commerce.” Action responsive to the first category of practices is mandatory; action responsive to the second category is discretionary.
Could Section 301 Authorize a Universal Tariff?
The statute grants USTR broad discretion to fashion its responsive “action,” subject to specific direction of the President, if any. For example, Section 2411(c)(1)(B) empowers USTR to “impose duties or other import restrictions on the goods of…such foreign country for such time as {USTR} determines appropriate.” Thus, unlike IEEPA, there is no ambiguity about whether tariff action falls within the scope of the Executive Branch’s Section 301 powers.
That statute permits goods to be targeted for Section 301 action “without regard to whether or not such goods or economic sector were involved in the act, policy, or practice that is the subject of such action” per Section 2411(c)(3)(B). Thus, for example, where acts, policies, or practices of the PRC were the basis for USTR action, the statute would, in theory, permit USTR to impose 60% duties on all imported products from the PRC.
However, Section 2411(c)(3) goes even further, permitting USTR to take action “against any goods or economic sector on a nondiscriminatory basis….” Congress indeed conceived of USTR targeting “innocent foreign countries” with “retaliatory action” under Section 301 “on a most-favored-nation (i.e., across-the-board) basis,” even when the offending acts, policies, or practices originated elsewhere. See Senate Finance Committee Report 93-1298 (1974). In view of the potential for “unfair” application, Section 302 of Pub. L. 93-618 had originally provided for a two-house Congressional veto via concurrent resolution of such “across-the-board” Section 301 action, but this was removed by Sections 901 and 902 of the Trade Agreements Act of 1979, even before Chadha. Yet, USTR’s authority to include “innocent foreign countries” on an “across-the-board” basis has been unchanged. Although untested in practice, one could read this expansive grant of authority as permitting USTR to impose 10% across-the-board tariffs, even if the offending acts, policies, or practices were only attributable to one country.
Would a New Section 301 Investigation Be Necessary?
Assuming that Section 301 powers would extend to the imposition of a universal tariff, the question remains as to what procedures USTR must observe. Perhaps the most straightforward option would be for USTR to ground such an action in an entirely new Section 301 investigation.
Even if USTR were to consider that 19 U.S.C. § 2417’s grant of power to “modify” an existing Section 301 action provides a viable alternative, disagreement (and pending litigation) concerning the extent of that power cautions against such an approach. Moreover, Section 2411(c)(3)(A) uses a disjunctive formulation, empowering USTR to act “on a nondiscriminatory basis or solely against the foreign country {investigated}.” This could be interpreted as creating a fork-in-the-road, such that any across-the-board action undertaken as a “modification,” could threaten to jeopardize existing country-specific measures.
Beginning anew by self-initiating a Section 301 investigation would avoid such complications. 19 U.S.C. § 2414 provides a 12-month deadline for completing investigations and determining remedial actions. There is no minimum timeline and required procedures are limited. 19 U.S.C. § 2413 obliges USTR to request consultations with the target country, and USTR consults with an interagency “Section 301 Committee,” to which USTR generally delegates the investigative legwork in practice. As for public input, Section 2414(b)(2) specifically contemplates scenarios in which “expeditious action is required” and USTR concludes its investigation and determines remedial actions before soliciting comments. Indeed, the factual basis for an affirmative finding of “unreasonable” acts that burden U.S. commerce could in theory be drawn from existing reports, such as the 2024 National Trade Estimate Report on Foreign Trade Barriers, making a quick-turnaround investigation appear more feasible.
It is also important to note that while the purpose underlying Section 301 is to create leverage to negotiate the elimination of the act, policy, or practice that is “unjustified” or “unreasonable,” Section 301 does not, unlike other trade-related remedies, e.g., antidumping and countervailing duties, have a binding statutory process for evaluating necessity and discontinuing actions. 19 U.S.C. § 2417(c) does provide for automatic termination of Section 301 actions after four years if no member of the domestic industry requests their continuation, but authority to terminate is otherwise discretionary. Even after termination, USTR can reinstate previous actions after observing the procedures required by 19 U.S.C. § 2416(c).
Conclusion
The imposition of across-the-board tariffs would certainly be unusual, unprecedented under IEEPA and Section 301, and open to challenge, but in IEEPA and Section 301 Congress passed broadly written laws that delegate substantial economic powers to the President and grant the President broad discretion as to when that power should be exercised. There are, nevertheless, foreseeable pathways for courts to find across-the-board tariffs unlawful under either IEEPA or Section 301, although these are more likely to be grounded in issues of procedure rather than doubts about the ultimate authority to impose tariffs. Of course, Congress retains the authority to amend or circumscribe existing delegations. Given the current environment in Congress, it is unclear whether any such rescission of authorities would be possible to enact. Perhaps from a practical standpoint, the ability to make reasonable legal arguments on both sides of this debate and lack of clarity regarding the reaction (or lack thereof) from the other branches of government yield the most significant impact — uncertainty among importers and domestic producers who compete with imports.
This post updated October 7, 2024.