President Trump has implemented tariffs on Canada and Mexico, citing reasons such as fentanyl and illegal immigration, which raises the need for a legal challenge. Many are concerned that courts will show deference to the broad powers given to the executive branch through the International Emergency Economic Powers Act.
These fears fail to acknowledge that Trump’s executive order includes a provision for escalating tariffs on Canada and Mexico if they retaliate. This approach of tit-for-tat is more of a trade war tactic than a solution to a true national emergency, and it does not align with the intent of the International Emergency Economic Powers Act.
Focusing on a more specific argument about the escalation provision, rather than the overall legality of imposing tariffs, could simplify the challenge process, produce similar outcomes, and bring up broader concerns about the law.
There is a growing chorus of voices calling for a legal challenge against Trump’s tariffs under the International Emergency Economic Powers Act. The Wall Street Journal recently supported this notion in an editorial.
While concerns about the legality of Trump’s tariffs are valid, the vague language of the legislation and the absence of any prior rulings against a president’s national emergency declaration under the International Emergency Economic Powers Act make potential plaintiffs hesitant.
Targeting the escalation mechanism would help avoid these obstacles. By arguing that escalating tariffs against Canada and Mexico do not relate to fentanyl or illegal immigration but are instead part of a trade war, one can navigate through these challenges.
Similar arguments are currently being presented in a case before the U.S. Court of Appeals for the Federal Circuit that may eventually reach the Supreme Court. This case involves two rounds of Section 301 tariffs that Trump imposed on China during his first term.
In one instance, a U.S. vinyl tile manufacturer, HTMX, pursued a tariff refund for Section 301 tariffs, citing them as part of an unfounded trade war with China. The Court of International Trade acknowledged this issue but chose not to take immediate action, requesting a more detailed justification from the United States Trade Representative.
Although Section 301 tariffs can be adjusted based on changing circumstances, this was not the case with China, where later rounds of tariffs were driven by retaliation rather than initial non-compliance.
Trump’s executive order’s escalation mechanism is even more disconnected from compliance compared to the China tariffs, making it vulnerable to legal challenges. The courts can criticize these actions without having to declare tariffs under the act as impermissible forever.
While litigation is essential, congressional intervention is needed to prevent misuse of the International Emergency Economic Powers Act. Until then, courts must play a role in restricting the executive branch’s ability to engage in extensive trade wars.
Marc L. Busch holds the Karl F. Landegger Professor of International Business Diplomacy position at the Walsh School of Foreign Service, Georgetown University.
Comments are closed