Trump's Tariffs Under Supreme Court Scrutiny: Major Questions Doctrine

The ongoing legal battles surrounding President Trump's global tariffs are poised to have significant implications for his administration's trade policies. The legal framework governing these tariffs may soon face the scrutiny of the Supreme Court, a move that could ultimately shape the future of the tariffs and the administration's broader economic strategies. A critical element of this situation is whether these global tariffs possess "vast economic and political significance." If the Supreme Court delivers a ruling in favor of the tariffs, it might solidify Trump's "Liberation Day" tariffs. Conversely, a dismissal could represent a setback for the administration as it faces ongoing legal challenges aimed at overturning these tariffs. Centrally featured in this legal discussion is the major questions doctrine. This judicial principle restricts federal actions on matters of substantial economic importance without explicit clearance from Congress. This doctrine has been bolstered by judges appointed during Trump's presidency, who have previously applied it to challenge President Biden's policies. The recent activities of the US Court of International Trade in New York have invalidated several tariffs, yet these decisions did not explicitly invoke the major questions doctrine. Meanwhile, the US Court of Appeals for the Federal Circuit has opted to uphold Trump's tariffs temporarily while litigation is still underway. On Monday, small business representatives who contested the tariffs argued against the continuation of the temporary stay. They claimed that a broad interpretation of the International Emergency Economic Powers Act of 1977 (IEEPA), which Trump used as the legal basis for his tariffs, would grant unconstitutionally expansive tariff powers to the presidency. This legal dispute challenges the ability of a president to independently impose import duties during what the president classifies as a national emergency. The current administration argues that the major questions doctrine is not relevant to national security decisions, where presidential discretion is paramount. Furthermore, they assert that the doctrine typically addresses federal agencies, not the executive branch itself. Trump has referenced the IEEPA in various executive actions, including tariffs on imports from China, Mexico, and Canada which he announced on February 1, citing concerns related to illegal immigration and drugs. He further invoked the IEEPA on April 2, announcing additional tariffs on multiple countries during the event he coined "Liberation Day." Constitutional law expert Aaron Tang from the University of California Davis regarded the tariffs as a crucial test case for the major questions doctrine. He stated, "IEEPA has never [been] used before to impose tariffs. So if the doctrine means anything, and if it applies neutrally, no matter who the president is, it will apply here." The major questions doctrine was notably highlighted by the Supreme Court in 2022, which imposed limits on Biden’s EPA in regulating greenhouse gas emissions absent clear Congressional endorsement. The court also restricted the Department of Education in forgiving student loan debt under the HEROES Act, demonstrating the doctrine's significant impact on presidential authority. Given the considerable economic stakes involved with these tariffs, Tang anticipates that the courts will rigorously evaluate their legal justification, suggesting, "The tariffs are way more economically significant than any of the Biden administration policies." These ongoing legal challenges present a formidable obstacle for Trump's tariff agenda and underscore the ongoing tension between executive power and legislative authority. Click here for political news related to business and money policies that will shape tomorrow's stock prices Read the latest financial and business news from Yahoo Finance