This decision has received considerable attention given its potential economic impact. But there is some risk its impact may be overstated; for now, the tariffs remain place, and ultimately, the litigation may distract more than it changes the course of the president’s trade policy.

The Basics on the Tariff Litigation

Amidst the rapidly changing tariff litigation landscape, here are four topline points of relevance:

First, what tariffs did the CIT’s decision cover? The two consolidated cases before the CIT – which is the court of first instance, equivalent to a district court, for certain trade-related disputes – concerns the so-called “worldwide” tariffs the Trump administration announced on Apr. 2, and the tariffs imposed on products from Canada, Mexico, and China in connection with the president’s declaration of emergency concerning illicit drugs on Feb. 1. The president also has imposed tariffs on specific products under another statute (Section 232 of the Trade Expansion Act of 1962), and those remain in place, as do the tariffs on products from China that the administration developed during the president’s first term under Section 301 of the Trade Act of 1974. Neither of these sets of tariffs was challenged in these particular proceedings though we could see more cases related to those statutes if they are increasingly used, as explained further below. (For a comprehensive overview of the tariffs announced by the Trump administration, Chad Bown has a tracker.)

Second, where do the tariffs stand now? The government appealed the CIT’s decision to the U.S. Court of Appeals for the Federal Circuit. The next day, the Federal Circuit granted the government’s request for an immediate administrative stay while it considers a longer stay that would last the duration of the appeal. As a result, the tariffs are still in place.

Third, what about all the other tariff-related litigation? Ten different groups of plaintiffs have filed in the federal courts seeking to put a stop to some aspect of the president’s tariff actions of the last four months. Some have filed at the CIT and others have filed in courts in Montana, California, Florida, and Washington, DC. The Montana and Florida courts have transferred their cases to the CIT and the California court also concluded the lawsuit falls within the exclusive jurisdiction of the CIT. (In that suit, however, the court dismissed the case at the plaintiff’s request, setting up the opportunity for an appeal to the Ninth Circuit Court of Appeals.) The DC court, on the other hand, denied the government’s motion to transfer and also ruled in favor of the two companies that sought relief from the tariffs; that case is now on appeal as well. With that case now proceeding apart from the CIT cases, we may end up with a circuit split on some of the issues that would make Supreme Court review more likely down the road. The government is seeking to slow down the litigation in nearly all the cases for a variety of reasons that I need not rehearse here. (The Federal Circuit is not known for its speed in any event. A case concerning the Section 301 tariffs from the first Trump administration was appealed to the Federal Circuit on May 16, 2023, and the court has yet to issue its decision.)

From among the 13 pending lawsuits, two recent complaints stand out. Last month, an importer of car parts asked the CIT to reverse President Trump’s termination of the de minimis tariff exemption for low-value Chinese shipments. This lawsuit, which is before the same panel of three CIT judges as the two consolidated cases finding the president’s tariff orders to be inconsistent with the law, is also facing a motion to stay from the government. The plaintiff has argued that waiting any length of time for relief will be too late as the company risks going out of business in a matter of weeks. The de minimis exemption, which allows goods valued below $800 to enter the country duty-free, has been a controversial and important feature in U.S. trade law for many years so the court’s consideration of this facet of the president’s recent orders should be closely watched. And last week, a Las Vegas-based skincare company brought to the CIT a potential class action lawsuit seeking “repayment of illegally exacted tariffs for all goods” on behalf of “all people who paid or will pay tariffs under IEEPA imposed by the Challenged Tariff Orders.” This case is the first to purport to cover all companies and persons affected by the president’s orders.

Fourth, what will happen next with respect to the tariffs in the courts? The appeal of the CIT’s May 28 decision is the one to watch. It is likely that the Supreme Court will hear some aspect of the dispute in the coming months, although we do not yet know whether and, if so, how the issues will be narrowed before the justices get involved. Apart from the most basic matter as to whether the IEEPA authorizes the president to impose tariffs, the case poses many challenging questions, including regarding the reach of the courts into presidential decision-making in an emergency. (A full analysis of all the issues exceeds the scope of this article, but Jack Goldsmith has highlighted several of these in a recent post, and I have noted some in past articles.) In the meantime, the government will continue to seek to keep the tariffs in place as they are now.

Delayed & Different Deals?

While the issue of the president’s authority under the IEEPA makes its way through the courts, the Trump administration has announced that it is negotiating trade-related deals with dozens of countries. Whether these deals, should they be concluded, ultimately address the tariffs applicable to products from those countries remains to be seen. The administration announced progress on a potential agreement with the United Kingdom, but no deal has been reached yet. Likewise a separate “deal” with China was reported, but media accounts suggest that was an understanding about how each country would manage their retaliation against the other and not a written pact.

Trade deals, especially mini-deals such as the ones contemplated by the administration, are tricky business even apart from the moving tariff target. First, some trading partners are reluctant to enter into them because they may violate the rules of the World Trade Organization. Second, although the United States is a party to hundreds of trade mini-deals, there is no particular template (unlike with U.S. free trade agreements) so negotiators are not starting with model text that could expedite their conversations. Third, given the lack of a template, there could be a lot of flexibility, and therefore uncertainty, in what they include. Already in the U.S.-UK term sheet, one sees that the parties are expanding their discussions beyond traditional areas of free trade agreements to economic security and “commercial considerations.” Other deals could include commitments to make purchases like the so-called China Phase-One Deal did in 2020, or they could seek to mix and match from other areas like defense (think: military spending and support), or debt relief, or they may even include guarantees regarding specific transactions. In the end, these agreements may not resemble modern trade deals (mini or otherwise) hardly at all. But there are limits to this exercise, which brings me to a fourth difficulty of negotiating international agreements with any connection to foreign commerce: working with Congress.

Why Congress is Needed

By now, many readers will be able to recite Article I, Section 8 of the Constitution at least enough to know that that Article assigns to Congress power to regulate commerce with foreign nations and to impose tariffs. At the core of the tariff litigation is the question of whether Congress delegated that authority to the president in the IEEPA such that he can impose tariffs when he follows the law’s procedural requirements, and if so, whether that delegation is constitutional.

The president’s deal-making activities also prompt constitutional questions. Although the United States has entered into hundreds of trade-related deals in recent years, almost none has been approved by Congress. This approach by multiple administrations has created an obvious tension with the trade separation-of-powers. Congress asserted its authority in this space recently by approving the Biden administration’s trade deal with Taiwan after that deal had been signed, but it has done little on a broader scale. In a recent exchange with members of Congress, U.S. Trade Representative Jamieson Greer said that his office plans to negotiate and conclude the upcoming agreements as executive agreements and not seek congressional approval. Congress has the power to intervene in these negotiations, but it does not seem poised to do so, even where there is bipartisan support for such interventions.

The bottom-line takeaway from recent events is that Congress is needed in both areas: the tariff authorities and the deal-making. The litigation may delay, distract, and disrupt matters, but even if the government loses these cases at the Supreme Court, there are many other statutes that the president could use to implement like tariffs. Accordingly, the lawsuits do not meaningfully affect the president’s trade agenda. More than a dozen congressional delegations of authority, as described in my 2020 Stanford Law Review article, remain on the books that could accomplish the same results. The president need only pivot to others, such as Section 122 of the Trade Act of 1974 as the CIT pointed out, or Section 338 of the Tariff Act of 1930, or back to Section 232 and Section 301. Only Congress can close off these pathways. Similarly, one can expect the president to enter into trade-related deals without oversight from Congress unless the legislature takes up new initiatives to channel the executive branch into the types of deals that the members wish, or away from trade-related deals entirely.

The drafters of the Constitution felt strongly about congressional authority in this area. One of the earliest drafts included text stating the Congress would have “the exclusive Power of regulating Trade and levying Imposts”. And the final version is likewise clear. Congress need not eliminate the IEEPA nor bring back all tariff-related controls entirely to the Hill, but crafting trade-related legislation that directs the executive to act consistently with the bi-partisan support for carefully tailored, consistent, and reliable trade policy should be within reach.

The article has been updated on the evening of June 4 to reflect the state of the appeal in the Ninth Circuit.

The post What Just Happened: The Tariff Litigation Advances appeared first on Just Security.

Instead, this analysis focuses on the issues that many of us in the U.S. trade and customs bar have been waiting to have answered: exactly what tariffs are coming, on what products, from what countries, according to what timeline, according to what legal authority, and with what (if any) exceptions. Those are the questions that are particularly legally important because they define the scope of any potential challenge that could be brought against the executive branch’s tariff moves.

What Has Been Happening in Tariff World

Before we get to the latest announcement, let’s start with what has happened in the last two months – at least some highlights. Since my last article on this topic explaining the tariffs on products from Canada, Mexico, and China that were announced in early February, the president has threatened and imposed various additional trade restrictions. (Colleagues helpfully have put together comprehensive trackers that have tried to keep up with the many declarations of new and suspended and cancelled tariffs or other trade restrictions, as well as with the retaliatory moves U.S. trading partners have developed.)

In mid-February, the White House announced that 25 percent tariffs would be coming in March on imports of steel and aluminum (and their derivatives) from all countries, and these did in fact come into effect on Mar. 12.

In early March, the one-month suspension of the tariffs on products from Canada and Mexico imposed in connection with the president’s fentanyl-related emergency expired, and those tariffs came into effect, although they were somewhat quickly amended to exempt particular imports that were compliant with United States-Mexico-Canada free trade agreement (USMCA) rules.

In late March, the White House proclaimed there would be 25 percent tariffs starting on Apr. 3 on automobiles and certain automobile parts – with some exceptions for certain parts that are compliant with the USMCA. (An Apr. 2 White House fact sheet confirms these are still on track.)

In addition to these product-specific tariffs, the White House in March issued an executive order in which it declared that exports to the United States from any third country found importing oil from Venezuela would be subject to a 25 percent tariff. This move was noteworthy in light of its “secondary” approach, punishing a country for its foreign commercial policies toward another country – not a typical use of tariffs or tariff authorities.

Finally, the administration has also previewed some potential forthcoming tariffs by announcing investigations into imports of copper, imports of timber and lumber, and into digital services taxes (DSTs) levied or due to be levied by certain U.S. trading partners. The latter is not a new issue; both of the last two administrations studied the DST issue. Ultimately, the Biden administration decided to suspend and then close the investigations into several countries’ DSTs. Also expected shortly under the same legal authority are massive service fees on Chinese maritime transport operators and other trade restrictions in connection with unfair trade-related acts, policies, and practices by China in the shipbuilding sector.

What Did the President Just Announce?

Yesterday, having received the results of the studies that he had commissioned on his first day in office, the president issued an executive order under the National Emergencies Act and International Emergency Economic Powers Act (IEEPA) finding that “underlying conditions, including a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and U.S. trading partners’ economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits, constitute an unusual and extraordinary threat to the national security and economy of the United States.”

On that basis, the president has imposed a minimum 10 percent tariff on nearly all goods imported into the United States beginning on Apr. 5. For goods from dozens of countries, and beginning on Apr. 9, the tariff rate increase will be higher than 10 percent – up to a high of 49 percent for products imported from Cambodia. Trade lawyers are still parsing the wording of all the various parts of what the White House issued, including but not limited to a potential list of exemptions (the order includes a 37-page annex listing particular goods that appear to be exempt from this tariff regime for various reasons), yet-to-come annexes, and further guidance on how cumulative these rates are in respect of other existing tariffs, but the bottom line remains: nearly everything coming into the United States from everywhere will face a notable surcharge by this weekend.

While the breadth of the order is no doubt sweeping, it leaves many nuances unanswered that will keep companies, as well as U.S. trading partners, very busy for the coming days and weeks.

Is the President Legally Authorized Do This?

The imposition of tariffs that is now unfolding is unprecedented in legal terms. Until February, no president had relied upon IEEPA as his basis for increasing tariffs. And what was announced yesterday expands the scope and scale of IEEPA tariffs to a staggering total. So, is this IEEPA-premised action supported by the text of IEEPA itself, or is the president acting beyond his delegated authority?

To answer this question, one needs to first step back to understand U.S. trade law’s vast collection of delegations. Most of the tariffs imposed before February were based on various delegations afforded to the executive branch by Congress in several Cold War-era statutes. These statutes enable the executive branch to raise tariffs when an agency or the president finds a threat to the U.S. economy or national security.

When these laws were passed, the global economy looked quite different from what it does today, just as the international and U.S. trade law toolkit was likewise different. As I detailed back in 2020 in an article in the Stanford Law Review, on the whole, the focus of these statutes was on empowering the president to negotiate trade agreements that would lower tariffs in reciprocal fashion with trading partners. By contrast to this general goal, the handful of provisions in these long trade acts that allow the president to raise tariffs for security reasons were exceptions, intended to be used sparingly and to accommodate moments where the president needed to act faster than Congress could on behalf of an industry or issue. And indeed, most presidents treated these special tariff-raising provisions as exceptions for decades until the first Trump administration, when they were dusted off and deployed on multiple occasions.

The other important feature about the U.S. trade law landscape is that, from the 1970s until today, while Congress has repeatedly tightened the procedural hurdles and its scrutiny of its tariff-lowering delegations, it did not do the same with respect to the security-premised tariff-raising provisions. As a result, these delegations are subject to very little congressional supervision.

What should be clear now to Congress – and as some members of the House Ways and Means Trade Subcommittee repeatedly emphasized at their latest hearing – is that Congress retains the authority to legislate and re-take its constitutional prerogative to regulate commerce with foreign nations. Like six years ago, there are some legislative proposals on the table to do just that, and yesterday, the Senate passed a resolution that would terminate the national emergency on fentanyl underlying some of the administration’s tariffs on products from Canada. But little progress is expected in the near term on a statutory overhaul and, even if the Canada-specific resolution were to make it through the House of Representatives, Congress would likely need to overcome a presidential veto.

As my co-authors and I have explained, courts have been highly deferential to the executive branch on these sorts of trade-related actions lately and not-so-lately. Some litigation is still ongoing, such as a major case related to the tariffs put on products from China back in 2020, but for the most part, the government has won those challenges.

No importer has brought a case yet to the U.S. courts challenging the new tariffs of the last two months, but with yesterday’s announcement, it seems very likely litigation is imminent. To be sure, IEEPA is somewhat differently situated from these other statutes because, unlike many of them, it does not expressly mention “tariffs” or “duties” as among the president’s available tools. Rather, it says he may “regulate” “importation or exportation.” Some colleagues have proposed additional thoughtful arguments to try to overcome the courts’ apparent inclination toward deference, but the deference is widespread on multiple dimensions. Given past practice, any case that seeks to put a stop to the IEEPA tariffs no doubt faces an uphill battle.

What’s a Company or Trading Partner to Do?

For now, the focus is on trying to understand all the technicalities and details behind yesterday’s big announcement and how it will be implemented. Many importers will try to qualify under one of the few exceptions or to advocate for more exceptions. Trading partners are already lining up to negotiate exemptions at the same time they prepare to retaliate against U.S.-made goods and likely also prepare dispute settlement complaints under their free trade agreements and at the World Trade Organization.

As noted above, there may be a path to a U.S. courthouse for importers facing irreparable harm, even if narrow. With more tariffs on the way under other authorities, lawyers are watching agencies closely to see if, apart from the foundational tariff challenges, there is room for procedural-styled challenges under the Administrative Procedure Act, especially where the executive branch is relying on years-old investigations to act now. The lack of clarity in the implementation of these overlapping and sometimes conflicting announcements may necessarily require litigation to sort, or it may require agencies to issue guidance that provides some relief simply because those agencies lack the resources and capacity to do all that the president wishes.

Economic Security and the Past, Present, and Future of Foreign Commerce

Over the last several years, the executive branch has sought to take advantage of what some see as blurry lines between international commerce, national security, and foreign policy to defend broad actions by agencies and by the president in international trade. But as Tim Meyer and I have argued, these tariff-raising statutes merely draw on the president’s national security expertise to make discrete determinations in limited circumstances; they do not open the door to the president to deploy such authorities as the nation’s primary foreign commercial policy tool. This week’s announcement will test the strength of both international and U.S. domestic trade rules.

Editor’s note: This piece is part of the Collection: Just Security’s Coverage of the Trump Administration’s Executive Actions

IMAGE: Stacks of shipping containers sit at the Port of Baltimore in Baltimore, Maryland, on March 31, 2025. (Photo by Jim Watson/AFP via Getty Images)

The post What Just Happened: The Trump Administration’s Latest Moves on Tariffs appeared first on Just Security.

On Feb. 3, the leaders of Mexico and Canada each spoke with the president. Following those calls, the Trump administration announced a 30-day suspension of the tariffs on products from Mexico and Canada in light of promises made by each leader (some of which were promises that they had made already in 2024) to shore up their border protection and related efforts.

On Feb. 4, China announced retaliatory measures against the United States in the form of tariffs on certain U.S. products, as well as export controls among other regulatory interventions.

What Has Been the Effect?  

The U.S. foreign commerce bureaucracy – in this instance, namely the International Trade Commission and Customs and Border Protection (CBP) – moved swiftly to take steps to arrange to charge importers additional taxes on the goods they bring in to the United States from these three countries, although now only the restrictions related to products from China will remain in place. Products from China will face a 10 percent levy on top of any other tariff to which they would be subject.

If the Trump administration decides to lift the suspension and re-impose the measures on Canada and Mexico, then all products from Mexico and most from Canada will be subject to a 25 percent levy. Energy products from Canada will be subject to a 10 percent levy. (Recall that, as a result of the United States-Mexico-Canada Agreement (USMCA) – the free-trade agreement negotiated by the Trump administration in 2018-2019 – most products presently enter the United States from these two countries with no such charge.)

Customs brokers will need to work with CBP to possibly amend their paperwork regarding these goods in which they estimate their duty liability. Products are likely to continue to flow, but CBP will send importers potentially hefty bills. Perhaps most problematic, or at least challenging to implement, is the president’s effective elimination of the de minimis qualification regarding products from China. CBP has reported that nearly four million de minimis shipments enter the United States on an average day and about two-thirds of those originate in China. The need to review all those shipments will take away from other work, and may require more staff when CBP is already facing a staff shortage.

What is the Legal Basis for These Actions?  

President Trump invoked the 1977 International Emergency Economic Powers Act (IEEPA), and relatedly the National Emergencies Act, as the basis for these actions. As Scott Anderson and I discussed the last time the president considered this path for putting tariffs on products from Mexico in 2019, the IEEPA provides the president with certain extraordinary authorities that he may use to “deal with any unusual or extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.”

Although no president has used the IEEPA to introduce tariffs on products from U.S. trading partners before, the IEEPA allows the president to exercise wide-ranging authority. In relevant part, it authorizes the president to:

(A) investigate, regulate, or prohibit—

(i) any transactions in foreign exchange,

(ii) transfers of credit or payments between, by, through, or to any banking institution, to the extent that such transfers or payments involve any interest of any foreign country or a national thereof,

(iii) the importing or exporting of currency or securities … [;] [and]

(B) investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest ….

Some commentators have argued that the president’s use here of the IEEPA exceeds the bounds of this statutory authority, pointing to the fact that, for example, the IEEPA does not mention explicitly the power to impose duties, among other arguments. But courts have tended to favor the president’s wide discretion under both the IEEPA and similar laws in the past. In the 1970s, a federal appellate court upheld President Richard Nixon’s authority to impose tariffs under a similar law for a limited period of time.

Interestingly, another law, which the president did not invoke, gives the president the authority to impose tariffs specifically to address uncooperative drug-producing and drug-transit countries. This statute, enacted as part of the Trade Act of 1974, allows the president to apply up to 50 percent tariffs to products from any country that is considered a “major drug producing country” or “major drug-transit country.” In September 2024, President Joe Biden determined that Mexico and China qualified as such countries. The availability of this authority may cast doubt on claims that the president has exceeded his delegated powers. For U.S. trading partners, however, premising the tariffs on drug issues on which Canada, Mexico, and the United States were already working together as compared to other thorny problems among the three countries may have made it easier to find common ground on an arrangement that would allow the president to suspend the tariffs.

What Could Happen Next?

CBP has begun to collect these tariffs on products from these China. As of now, there are few exceptions or exclusions. If these tariffs remain in place for an extended period, we may see the business community seek an exclusion process by which companies can at least apply to be exempted from having to pay these border taxes on their products. The first Trump administration set up an exclusion process for the tariffs imposed on products from China (one study has concluded that that process favored politically connected companies over others). No law requires the administration to set up exclusions, nor does any law prohibit it.

Canada, Mexico, and China have also announced that they will commence dispute settlement proceedings at the World Trade Organization (WTO) and, in the case of Mexico and Canada, under the USMCA. In simplest terms, the legal arguments for such proceedings turn on the fact that the United States, as a USMCA party and as a WTO member, has an obligation not to impose discriminatory tariffs on other parties and members. Even if the United States were to lose such a case under the USMCA, the likely remedy for Canada and Mexico would be to impose their own trade-related measures – something they already planned to do. And the WTO dispute settlement system is in a state of disarray such that disputes cannot be resolved absent agreement between the parties to use a special process.

Given the president’s seemingly broad authority under the IEEPA, questions remain about what those opposed to the tariffs – apart from the trading partners themselves — could do to stop their implementation.

Let’s start with the litigation option. An affected importer could file a lawsuit challenging the president’s action along one or more dimensions such as with respect to the nature of the national emergency or the constitutionality of the use of the IEEPA to impose tariffs. The importer’s choice of court would depend on the part of the action that it claims is a violation of the law and on what grounds. Most cases concerning tariff actions are filed at the U.S. Court of International Trade, a specialized federal court based in New York City.

Many of the cases against the Trump and Biden administrations that sought to put a stop to tariffs during the last eight years have been filed in that court. On appeal to the U.S. Court of Appeals for the Federal Circuit, the government has won nearly all the cases that have concluded (some remain pending), but those cases have not involved the IEEPA. We may see a case concerning the tariffs on products from China in the coming days. One might expect an importer to seek a preliminary injunction to put a pause on the implementation of the tariffs as soon as possible, but that is a high bar to meet.

As for Congress, although some members have spoken out in opposition to the tariffs, there is not enough resistance within the legislature for it to intervene. During both the first Trump administration and the Biden administration, members proposed legislation that would retract some of the delegated authority to the president to regulate international commerce, but none of those initiatives gained sufficient traction with respect to the president’s security-premised tariff-raising authority. Now does not seem like the time when the momentum will shift. Without legislation to revise its prior delegations, it would take a veto-proof majority for Congress to intervene in this particular national emergency and tariff action.

In all likelihood, the three governments will continue to negotiate arrangements with the United States to address the president’s concerns such that these tariffs may be lifted or may be more limited than the initial orders suggest. One question remains as to how long that will take, and how long a deal will last. For now, there is supposedly 30 days’ reprieve on the North American disruptions. But there may be others. We know well by now, just two weeks into this administration, that Trump is inclined to threaten and apply tariffs as a means of coercing governments to accede to his wishes on a variety of topics at any time.

Editor’s note: This piece is part of the Collection: Just Security’s Coverage of the Trump Administration’s Executive Actions

IMAGE: Shipping containers are seen at the Port of Montreal in Montreal, Canada, on February 2, 2025. (Photo by Andrej Ivanov/AFP via Getty Images)

The post What Just Happened: New Tariffs on Products from Mexico, Canada, and China appeared first on Just Security.

Indeed, officials from both the Trump and Biden administrations have invoked economic security as a reason for action across a wide range of policy issues. In addition to tariffs on goods from China and on steel and aluminum, take the proposed outbound investment screening mechanism, the Trump administration’s efforts to force a sale of TikTok, or the extensive new export controls, as obvious examples. The justifications reflect a broader conversation on security that is now pervasive in trade policy circles. Compare the U.S. Trade Representative’s Annual Report published in 2016 to the version published this March. The 2016 report mentioned security 25 times, frequently in the context of food security. The 2024 report mentioned security 129 times. And the 2024 Report added a section on “enhancing economic security,” just one example of the securitization of U.S. foreign affairs, especially in Washington’s relationship with Beijing.

In a forthcoming article, we argue that this linking of “foreign commerce” to “economic security” in U.S. policymaking has had the effect of dangerously, and often erroneously, intermingling authority that Congress has delegated to the executive branch with the president’s constitutional powers to oversee foreign affairs. The Constitution assigns plenary authority over taxes, tariffs, and commerce – including, explicitly, foreign commerce – to Congress. The Constitution assigns other kinds of foreign affairs powers, such as the role of commander-in-chief of the armed forces or the power to negotiate treaties, to the president. The executive branch’s authority over foreign commerce began as a statutory authority, but over time the executive, with some backing from the courts, has increasingly claimed that such authority has constitutional dimensions. Constitutional claims over the president’s non-commercial foreign affairs authority have begun to engulf understandings of Congress’s plenary authority over the regulation of commerce with foreign nations – from the perspective of both the executive branch as well as the courts. 

Assertions of Executive Branch Power in Foreign Commerce

Officials from both the Biden and Trump administrations have advanced novel arguments before the courts asserting this point: foreign commerce is part of security, and therefore the president has his own constitutional foundations for action in the domain of commerce. In a case concerning the Trump administration’s tariffs on steel and aluminum, the government argued that “[t]he President’s coexistent constitutional foreign affairs and national security responsibilities compel the conclusion that Congress did not enact an unconstitutional statute.” In the context of a case about tariffs, this claim is extraordinary. The text of the Constitution expressly allocates the power to tax, as well as the power to regulate foreign commerce, to Congress exclusively. It makes no difference that the statute in question – Section 232 of the Trade Expansion Act of 1962 – invites the president to evaluate a threat to national security as a predicate to exercising purely delegated power to impose taxes. Such an exercise of delegated power does not open the door to his constitutional authority; rather, it draws on his expertise. 

The idea that statutory interpretation – which, as the Supreme Court has emphasized, is the crux of nondelegation analysis – would be different because the president has constitutional authority over other kinds of foreign affairs issues represents a significant effort to expand extra-textual presidential foreign affairs powers into areas reserved to Congress. And this argument was not a one-off. Although courts have not embraced the executive branch’s most expansive arguments, they have usually upheld challenged action that the executive branch has defended in these terms. For example, in Transpacific Steel LLC v. United States, the government defended the president’s decision to impose additional tariffs under Section 232 after the statutory deadline for presidential action by arguing that the president has inherent authority to modify his actions “when the President is exercising powers that are quintessentially executive in nature” such as “foreign policy and national security.” Although the Federal Circuit did not embrace this expansive argument explicitly, it interpreted Section 232 to allow the president to modify his actions after the statutory deadline. In this way too, disputes over foreign commerce are coming to resemble those over national security, where the president (almost) always wins.

Congress Can Restore the Balance

Given that the courts usually have not been willing to course-correct in this area, it falls on Congress to restore the balance in its favor. And rightly so; the complex geopolitical problems of today may require more guidance from our elected leaders. Existing delegations to the executive branch – which, like Section 232 and Section 301 of the Trade Act of 1974, often date from the Cold War – are imperfect instruments for the set of geoeconomic challenges currently facing the United States. Congress should reconsider these authorities with attention to the domestic, economic, and foreign policy challenges of this century, not the last. To the extent “economic security” is a central element of U.S. foreign and domestic policy, the many constituencies in that policy space should press for Congress’s attention. Our article outlines three potential paths to serve that end. 

First, we argue that Congress should amend a variety of statutes (such as Section 232 and Section 301) to sunset the president’s economic security actions after 90 or 180 days without the possibility of renewal unless Congress authorizes their extension. As the cases discussed above illustrate, the president has used his constitutional authority over foreign affairs to push the limits of broadly-worded delegations, and to deflect efforts to persuade courts to read such delegations narrowly for separation of powers reasons. A clear statutory withdrawal of tariff authority would blunt the president’s efforts, in effect, to constitutionalize control of foreign commerce and to wage trade war. It would still enable the president to act quickly in the face of an emergency, but without sacrificing Congress’s role. During the Trump administration, a number of bills were introduced that would have curtailed the president’s authorities in ways similar to those we propose, but none made it out of committee. Given the uncertainty created by this year’s presidential election – in which former President Trump has promised even more expansive uses of executive authority, including an across-the-board 10 percent tariff on imported products if reelected – Congress may be more disposed to enact such legislation in 2024, regardless of which candidate occupies the White House in 2025. 

Second, Congress should prohibit the executive branch from relying on an international agreement it has negotiated as the legal basis under which any good or service is imported into the United States, exported from the United States, or regulated while in the United States, unless Congress has either explicitly authorized the agreement in advance or approved it after its conclusion. Trade agreements and their negotiations have increasingly become a flashpoint for tension between the executive branch and Congress. In recent decades, the executive branch has concluded hundreds of commercial agreements – often with significant geopolitical and foreign affairs implications – that were neither authorized nor approved by Congress. Congress should clarify and reform the executive branch’s trade agreement authorities by imposing bright-line rules via statute. While the executive branch might object that such a statute interferes with its constitutional authority to negotiate with foreign countries, our proposal is carefully drawn to limit only the domestic effects of agreements, not the president’s authority to negotiate the agreements in the first place – an approach that falls well within Congress’s plenary constitutional authority over commerce.

Third, and finally, Congress should eliminate the U.S. Court of Appeals for the Federal Circuit’s exclusive jurisdiction over appeals in most trade cases and transfer that jurisdiction to the U.S. Court of Appeals for the D.C. Circuit. At present, the Federal Circuit is the appellate court for final decisions from the U.S. Court of International Trade. In that role, it has been responsible for the decisions we discuss above upholding broad exercises of authority by the executive branch. But the Federal Circuit is primarily an intellectual property court. Indeed, one member of the court has estimated that intellectual property cases consume more than half the court’s docket and more than 80% of its time. Given that international trade law cases in federal court are primarily statutory interpretation and administrative law cases, the D.C. Circuit makes more sense as a forum for appeals. As the premier administrative law circuit in the country, running appeals through the D.C. Circuit would force the bar and the Court of International Trade to approach these administrative law cases in the same manner as other administrative law cases – and that would enhance review of the executive’s activities in a way that is currently lacking. 

Judicial Review Without Chevron

A shift to the D.C. Circuit would be especially well-advised in light of the Supreme Court’s recent line of cases cutting back on administrative agencies’ authority. The most recent such decision is Loper Bright Enterprises v. Raimondo, which eliminates “Chevron deference.” Under the “Chevron doctrine,” courts deferred to an agency’s reasonable interpretation of an ambiguous statute. The Chevron framework applied generally, not specifically to trade statutes, but agencies administering trade statutes regularly relied on Chevron deference to defend their interpretations. Chevron’s demise leaves the scope of deference to agencies up to the federal courts to determine going forward. 

The Supreme Court’s opinion suggests that lesser deference, such as when a court uses an agency interpretation as an aid in the court’s decision as to a statute’s correct interpretation, might continue to be appropriate. In trade cases, however, the government is almost sure to double down on its constitutional arguments, invoking “foreign affairs exceptionalism” – “the belief that legal issues arising from foreign relations are functionally, doctrinally, and even methodologically distinct from those arising in domestic policy” – to try to shield its interpretations of trade authorities from judicial review. The Federal Circuit’s record in trade cases suggests that it may be open to these arguments, creating special deference for trade statutes (over which, again, it often has exclusive jurisdiction), while other circuits develop a less deferential standard based on Loper Bright for other kinds of regulation. 

An early test of how the Federal Circuit will handle the Supreme Court’s new administrative law doctrines in these foreign commerce contexts is likely to come in HMTX Industries v. United States (in full disclosure, one of us has filed an amicus brief in HMTX in support of the challengers). That case asks whether Section 301 – which authorizes, and sometimes mandates the U.S. Trade Representative to take a variety of measures to counter unjustifiable, unreasonable, or discriminatory actions by foreign countries that burden U.S. commerce – allows the executive branch to increase the tariffs on products from China without the investigation usually required by the statute. The government asserts that a new investigation is unnecessary because these new tariffs address the tariffs China imposed on U.S. goods in response to the Trump administration’s Section 301 tariffs, which were designed to combat China’s intellectual property theft. Despite the Supreme Court’s recent change of direction with regard to agency authority, the government has continued to argue that the decision to expand the tariffs without a new investigation is subject to only limited review. 

As “economic security” has become an organizing concept for U.S. foreign commerce policy, the executive branch has drawn on this blurry policy space to argue that statutory limits on its foreign commercial authority do not bind it. Instead, it has buttressed its delegated authority with claims of independent constitutional authority over commercial matters like tariffs. And unlike Founding Era courts, today’s judiciary has often accepted these claims. Clearly, some members of Congress have different views on how to address economic security concerns. Congress has grabbed some low-hanging fruit by enacting legislation that reclaims some of its authority over trade agreements and there are signs of bipartisan interest in other trade actions. But whether Congress will intervene to address the executive’s efforts to use economic security to expand its control over commerce remains to be seen.

The post How ‘Economic Security’ is Re-shaping Presidential Power appeared first on Just Security.

Part of the reason for the State Department’s underperformance on executive agreement publication and reporting is that not every agency provides the State Department with copies of the agreements it concludes. That is especially true when it comes to trade-related executive agreements (TEAs) – foreign commercial agreements not approved by Congress after their conclusion. But forwarding completed deals to State is not the only accessibility issue surrounding our more than 1,200 TEAs.

As I explore in a forthcoming essay in the Columbia Law Review Forum, trade deals are frequently left unpublished and unreported by the U.S. agencies that negotiate them. In fact, TEAs are sometimes not available to anyone apart from the agency that concluded them and the foreign government partner. Worse still, in some instances, the U.S. government has misplaced its copy entirely.

Not having the text of commercial agreements concluded by the U.S. government is troubling as a matter of good governance, though it would matter less if these agreements were relatively inconsequential. But even a brief glimpse of those that are available indicates that these agreements create binding commitments of reasonably significant value. They govern the goods and services that get into the country and under what conditions. They set up systems for food safety, product quality, cooperation with significant foreign partners, and much more. The result is that hundreds of agreements critical to our globalized supply chains are simply unavailable.

My team and I had to locate these trade deals by hand – reaching out to foreign governments, subscription services, retired U.S. government workers, and anyone else who might have access to agreements that the U.S. government no longer has or is unwilling to share.

That executive branch agencies are not reporting and providing TEAs to Congress also has constitutional implications. Unlike some other areas of foreign relations, the regulation of foreign commerce is a congressional prerogative per Article I of the U.S. Constitution; and yet, as our work revealed, Congress has only limited information about the foreign commercial agreements into which the U.S. government is entering.

Despite the explosion in the use of hidden trade deals in recent years, Congress has only barely spoken to the problem. A 2002 statute provides that an undisclosed TEA related to a major free trade agreement shall have “no force and effect” under U.S. law. That constraint does little to address the unavailability of hundreds of other TEAs, let alone the executive’s engagement with Congress about them or the delegation of authority issues that they also implicate.

Why the SCA Doesn’t Solve Problems with Trade Agreements

It doesn’t have to be that way. But the proposed changes set out in the SCA will not do what is needed to fix trade’s transparency problems.

One primary limitation of Section 310 of the SCA – and of the 1972 Case Act – is its focus on the State Department as the clearinghouse for executive agreements whereas trade has been institutionally and procedurally separate from other areas of foreign relations for more than fifty years. In 1962, the Office of the U.S. Trade Representative (USTR) was created to take trade out of the State Department’s purview and, while an interagency structure was built around it to provide support, USTR has the lead on the trade agreements program. That division of labor, enhanced by later legislation giving USTR still greater management and control, created different lines of authority and processing for trade agreements than for other agreements.

Thus, withholding appropriations from the State Department as the SCA seeks to do would not prevent trade-engaged agencies (any one of more than a dozen agencies that are so engaged such as the Department of Agriculture, the Department of Commerce, the Food and Drug Administration, USTR, etc.) from doing what they are already doing – concluding, on average, twenty of these off-the-radar agreements each year. The SCA also would require that the executive branch notify committees within five days after the State Department approves negotiation or conclusion of an agreement, but there again, State is often left out of the trade dealmaking exercise, so such an obligation is likely to fall flat.

This partitioning of trade by design allows the trade lawmakers in the executive branch to claim that trade is part of “foreign relations” when convenient, such as when their actions may risk falling under Administrative Procedure Act’s scrutiny, and to claim trade is more like domestic lawmaking when convenient, such as to avoid subjecting TEAs to the strictures of the Case Act. It remains contested between State and trade-engaged agencies as to which, if any, TEAs ought to go through State’s Case Act processes. Even adding a Chief International Agreements Officer at trade-related agencies as the SCA purports to do may not be sufficient to overcome those interagency debates as to what qualifies for State’s processes. The issue is not one of staff shortage but rather statutory interpretation.

Trade is Also Specially Situated on the Hill

That the Senate Foreign Relations Committee’s suggested changes to the Case Act are insufficient for dealing with TEAs is unsurprising. The same structural distinctions for trade are found on the Hill: USTR reports to the Senate Finance Committee, not the Senate Foreign Relations Committee. Likewise, it regularly engages with the House Ways and Means Committee, not House Foreign Affairs. That close relationship with Congress stands out among the foreign relations bureaucracy just as does trade’s constitutional positioning. As the former chair of the House Ways & Means Committee recently put it, Congress is USTR’s client.

It is not that the Senate Finance Committee is not paying attention. It very much is. Just recently it re-upped a proposal for a USTR Inspector General for greater oversight at that agency. But it has paid less attention to TEAs and their invisibility. The focus of trade negotiating authority over the last fifty years has been the content and congressional approval of major free trade agreements (FTAs). That authority is time-limited and expires this summer. Already some on the Hill have called for its renewal despite President Biden having previously said he will not enter into new FTAs until “we’ve made major investments here at home.”

How to Address TEA Transparency Issues

If new trade negotiating authority comes into effect in the Biden Administration, lawmakers from both branches should use it as a chance to address the transparency problems with TEAs. The next trade legislation ought to include provisions to temper the publication, reporting, and record-keeping issues of the past.

The solutions need not be that different from those in the proposed SCA but they need to be directed to the right places and be clear about what is required and under what timeline. For example, requiring trade agencies to “publish” agreements is not enough. Even where an agency makes TEAs publicly available on the internet, it takes some significant web sleuthing to find them or to know they exist at all. Thus, the publication requirements set out in any legislative reform need to be clearer about where and how the many trade-engaged agencies ought to publish TEAs.

Similarly, critical to clarity in the rules and expectations for reporting and publishing is defining what constitutes a TEA. In trade-land, deals take many forms. Part of the challenge that my team and I faced was trying to figure out what falls into this category in the absence of any standardization.  The State Department has developed its own criteria for international agreements as the Case Act prescribes but again, whether the disciplines of the Case Act and State’s regulations under that Act apply to the work of trade agencies is a matter of debate. Explaining what sorts of deals are subject to which transparency regime (State’s or another trade-specific process) will help.

Conclusion

These suggestions and others I set out in my forthcoming essay are badly needed to modernize the TEA system to reflect and account for the practices developed by our trade administrative state – above and beyond what the SCA may do for other types of executive agreements. The time is now: on May 7, the Biden Administration announced new “Transparency Principles” for USTR which include ensuring that the USTR website “contains up to date information on current trade initiatives and programs . . . . [M]aterials related to agency programs, initiatives, and negotiations will contain sufficient information to adequately inform the public and will link to available background information on the USTR website.” Further, commentators have recently suggested the Congress is getting back in the trade game after a period of more “limited presence.” Dealing with TEA transparency together with the Biden administration ought to be front and center in the playbook.

IMAGE: (L-R): Senator James E. Risch (R-ID), Senator Marco Rubio (R-FL), Senator Benjamin L. Cardin (D-MD), and Senator Robert Menendez (D-NJ) attend a hearing of the Senate Foreign Relations Subcommittee on US-Venezuela Relations (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)

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