U.S. President Donald Trump speaks during a press briefing at the White House following the Supreme Court's ruling Friday.Kevin Lamarque/Reuters
On the surface, the U.S. Supreme Court ruling against Donald Trump’s suite of tariffs is a major but narrow setback for the President’s trade policy. But the decision also reaches deep into other areas of contention in the Trump era and affects countries far beyond America’s borders.
The high court did more than deny the President’s self-given unilateral authority to impose tariffs on goods entering the country, a ruling that potentially offers economic relief to trading partners such as Canada. It also delivered a substantial defeat to the principal philosophy of the Trump administration, which holds that the presidency has inherent powers that the Constitution does not specifically provide.
“The court has said that there is no authority for the President to impose tariffs on a whim,” said Douglas Irwin, the Dartmouth College economist regarded as the country’s leading expert on trade policy, in an interview.
But the consequences of the decision are unpredictable – and potentially massive.
It is the first time the court has struck down a major Trump initiative in his second term and suggests it may also strike down his effort to ban birthright citizenship.
Canada lauds U.S. court ruling that strikes down legal justification for some Trump tariffs
It represents a sharp rebuke to the Trump administration’s view of nearly unrestricted executive powers. In a significant concurring opinion, Justice Neil Gorsuch, a conservative appointed by Mr. Trump who often sides with him in court cases, wrote, “Americans fought the Revolution in no small part because they believed that only their elected representatives (not the King, not even Parliament) possessed authority to tax them. The framers gave Congress alone ‘access to the pockets of the people.’”
The ruling may spur Congress, which has been passive in asserting its constitutional powers, to reassert its authority in this and other areas. It may reshape foreign relations by removing a major source of irritation with other countries.
It surely weakens Mr. Trump’s power to intimidate foreign leaders, including Prime Minister Mark Carney, who after his powerful speech in Davos earlier this winter emerged as a global leader of the resistance to the U.S. President’s aggressive trade tactics and demeaning language.
The 6-3 decision includes conservatives that in other areas have upheld the President’s policies and initiatives. Democrats and critics of the court have argued that its conservative leaning has essentially transformed it into a wholly owned subsidiary of the Trump administration. Indeed, in past cases, the court gave Mr. Trump temporary permission to ban transgender people from military service and impose deep cuts to federal departments and agencies, especially the Education Department.
But the broad majority who voted to strike down the Trump tariffs is an implicit assertion of the independence of the judiciary.
And by affirming the independence of its own branch in the U.S. government, the ruling has the ancillary effect of affirming the independence of Congress, which in American political theory is party to a fragile but indispensable balance of powers.
Opinion: Does striking down Trump’s ‘emergency’ tariffs make it better or worse for Canada?
It is a second setback for Mr. Trump on trade this week, likely adding to domestic doubts about his economic policies. Commerce Department figures released only a day earlier showed that the Trump tariffs did not erase the country’s merchandise trade deficit, which rose to a record US$1.2-trillion last year. (The government did report a slight decrease in the broader measure of goods and services.)
Mr. Trump repeatedly argues, as he did Thursday in Georgia, that his policies have provided a substantial boost to the economy. His Democratic opponents almost certainly will pair the court’s ruling with estimates from the nonpartisan Tax Foundation that the President’s trade policies cost American households more than US$1,000 last year.
Friday’s high court decision does not mean that tariffs will no longer be a part of U.S. economic policy or even Mr. Trump’s own powers. American presidents have many other statutes that can be invoked to impose tariffs. “It’s just that it will be a little more laborious to do so,” Prof. Irwin said.
In response to the ruling, Mr. Trump lashed out at the court and especially the justices he appointed who defied his wishes. He then signed an executive order imposing a global 10-per-cent duty for 150 days starting Feb. 24.
He also might employ statutes regarding national security that would allow him to impose tariffs on specific goods if they are a threat to the country, an argument he has repeatedly made in the past. In addition, he can target what he considers unfair trade policies of other countries and, in the service of addressing the circumstances of balance-of-trade deficits, impose a temporary 15-per-cent tariff on imported goods.
For months, political scientists, lawyers, members of Congress and the White House staff have examined, debated and struggled with the meaning of Article I, Section 8, of the Constitution, which sets out the specific powers of the legislative branch. The document includes among Congress’s specific prerogatives the power to “regulate Commerce with foreign Nations” and “lay and collect Taxes, Duties, Imposts and Excises.”
Mr. Trump is possessed of a view best expressed by 19th-century Southern politician and political philosopher John C. Calhoun, who, before he became an ardent opponent of tariffs, said, “Protection and patriotism are reciprocal. This is the way which has led nations to greatness.”
Other leaders have felt similarly. During the Depression, Canadian prime minister R.B. Bennett said he would use tariffs to protect Canada’s economy and bring back jobs “or perish in the attempt.” He employed high tariffs to address the economic distress of the period and to respond to the trade barriers erected by the Smoot-Hawley Tariff Act of 1930. And, in a policy that has echoes in our own era, he sought to shift trade away from the U.S. to Europe, especially Great Britain and its empire.