U.S. LAW & GLOBAL TRADE RELATIONS.

     In addition to IEEPA, Trump’s has multiple legal tools he can utilize in his international economic warfare. Which may, in fact, withstand court challenges. Namely, Section 232 (national security) of the Trade Expansion Act of 1962 and Section 122 (balance-of- payments) of the Trade Act of 1974. Because Section 232 deals specifically with national security, where presidents have great constitutional authority and because Section 122 provides specific legislative delegation. Of course, the President can use export controls, other financial measures, authority to review foreign direct investment under CFIUS and perhaps new legislation to tax foreign direct investment.

     It is clear to me the issues of geopolitics are at the heart of Trump’s trade actions — involving much more than trade and economics. And foreign policy is a great executive constitutional power. However, Congress has a great say also.

     Nevertheless, it will be up to the federal courts to decide if Trump’s actions are lawful. Many conservative legal scholars have opposed Trump’s tariffs and actions. If Trump stays true to form and exaggerates his actions and authority, once again. the courts will have an easier time of ruling against him. We’ll see ………..

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“In fact, “Taco” is not just a useful heuristic for investors. It also turns out to be a key to analyzing Trump’s foreign policy …. Looking at Trump’s two periods in office, Shapiro finds 22 occasions so far in which he has threatened the use of force — but only two in which he has actually followed through. There have been 25 actual uses of force — mainly limited strikes against terrorist groups such as Isis or al-Qaeda. But only on two occasions were they preceded by a presidential threat …. What sets Trump apart is not his reluctance to go to war — but the striking contrast between his tough-guy rhetoric and his real-world caution. The current president seems to have inverted Teddy Roosevelt’s famous maxim about speaking softly and carrying a big stick. Trump prefers to shout loudly, while brandishing a pencil.” “Trump Always Chickens Out Also on Foreign Policy.” Financial Times (6.3.25).

“Trump loves tariffs, but I’ve long suspected that if that weapon turns out to be ineffectual or gets blocked, he will quite quickly turn to other tools of international economic warfare. In fact, he already has. The nasties in his budget bill that will allow reprisals against foreign companies invested in the US were, of course, there before last week’s ruling. But they’re a warning of what happens when Trump widens the field of fire …. How the US weaponized various aspects of the networks connecting the global economy, including finance, data, semiconductors and data centres. “Trump and Other Legal Tools of International Economic Warfare..” Financial Times (June 3, 2025).

“Now that courts have ruled against the Trump administration on IEEPA, its use of Section 232 is even more likely. If IEEPA is not to be used for tariffs against trade partners, the White House will resort to alternative methods. The courts and Congress tend to be highly deferential to executive claims of national security …. There are at least seven additional Section 232 investigations pending, including against pharmaceuticals, semiconductors, copper, lumber, heavy vehicles, critical minerals, and space products. These cases could be concluded at any time, with tariffs likely as a remedy. Now that courts have ruled against the administration on IEEPA, the use of Section 232 is even more likely …. Trump also has recourse to other trade tools. The CIT judges, for instance, suggested the possible use of Section 122 as a replacement. Section 122 deals with balance of payments issues and allows the immediate imposition of tariffs of up to 15% for 150 days⁷ The original policy document issued by Trump at the start of his term already asked his government agencies to identify all existing legal pathways to manage trade tensions.” “Trump’s Legal Options in the Tariff War – Section 232 (National Security).” Hinrich (June 3, 2025).

”A powerful sign that President Trump’s tariff-driven trade war is at risk came in a friend-of-the-court brief filed by a coalition that included many prominent conservative and libertarian lawyers, scholars and former officials. The brief was also a signal of a deepening rift between Mr. Trump and the conservative legal movement ….  The coalition filed a very similar brief in a second case, too, in the Federal District Court in Washington The trade court ruled for the challengers. On Thursday, the district court judge followed suit, citing the supporting brief eight times …. When it does, the justices will have to grapple with two doctrines dear to the conservative legal movement, both of which would seem to cut against Mr. Trump’s understanding of his powers. One, the nondelegation doctrine, says that Congress may not transfer unbounded legislative powers to the executive branch. The other, the major questions doctrine, says Congress must authorize in plain and direct language any sweeping executive actions that could transform the economy. “Conservatives on Trade Briefs.” New York Times (6.5.25).

     This is good news, finally. Here’s the conclusion of yesterday’s decision of the Court of International Trade declaring unlawful many of Trump’s tariffs (global tariffs).

“The court holds for the foregoing reasons that IEEPA does not authorize any of the Worldwide, Retaliatory, or Trafficking Tariff Orders. The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs. The Trafficking Tariffs fail because they do not deal with the threats set forth in those orders. This conclusion entitles Plaintiffs to judgment as a matter of law; as the court further finds no genuine dispute as to any material fact, summary judgment will enter against the United States. See USCIT R. 56. The challenged Tariff Orders will be vacated and their operation permanently enjoined.”

     Unfortunately, the decision of the Court of International Trade was stayed the next day when the Trump administration appealed to the U.S. Court of Appeals for the Federal Circuit.  Undoubtedly, this will go to the Supreme Court.

    A second case decided the same day also declared the tariffs unconstitutional. Of course, Trump can try other statutory avenues such as Section 122 (balance of payments) and Section 301 (retaliation for trade restrictions) of the 1974 Trade Act, as well as imposing additional duties under Section 232(b) of the 1962 Trade Expansion Act, to enact even greater mercantilist and predatory tariffs and trade policies.

     This story is far from over. The once obscure issue of tariffs has now morphed into the geopolitical and legal issue of the day — with grave economic and financial consequences. The appeal raises the question of a 50-year-old case from the Nixon era upholding a limited tariff surcharge. The question comes down to the proper interpretation of the statutory language of IEEPA and the willingness of the courts to review excessive executive actions under newer statutory rules of interpretation.

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“A federal trade court ruled President Trump didn’t have the authority to impose sweeping tariffs on virtually every nation, voiding the levies that have sparked a global trade war and threatened to upend the world economy. The decision on Wednesday from the Court of International Trade blocked one of the Trump administration’s most audacious assertions of executive power, under the International Emergency Economic Powers Act of 1977 …. The order blows a hole in global trade talks, already under way with more than a dozen nations, which began after the reciprocal tariffs were imposed. It also throws into question recent agreements with the U.K. and China …. The panel also said the U.S. trade deficit didn’t fit the law’s definition of an unusual and extraordinary threat.  The Trump tariffs led to several challenges in the Court of International Trade and in federal courts around the country. The trade court, which has nationwide jurisdiction over tariffs and trade disputes, was the first to rule on requests for injunctions after holding hearings in two cases. Appeals from the court are heard by the U.S. Court of Appeals for the Federal Circuit and ultimately the Supreme Court …. The plaintiffs said no other president had ever invoked IEEPA to impose tariffs, because nothing in the law authorizes such power. There is also no emergency, they said, noting that the U.S. trade deficit has existed for decades without creating an economic crisis …. National security tariffs imposed on products like steel and aluminum, as well as similar duties planned on sectors like lumber and semiconductors, are justified under a different law and wouldn’t be affected by the ruling.” “Trade Court Strikes Dow Trump’s Global Tariffs.” Wall Street Journal (May 29, 2025).

“A federal appeals court (CAFC) has temporarily put on hold a ruling that voided President Trump’s tariffs while it considers the administration’s challenge to the lower-court decision (CIT). In a brief order Thursday, the U.S. Court of Appeals for the Federal Circuit said it was pausing Wednesday’s decision from the U.S. Court of International Trade until it can hear further legal arguments. The order, known as an administrative stay, didn’t rule on the merits of the litigation. Administrative stays are common in emergency appeals …. A three-judge panel of the Court of International Trade, a tribunal in New York City, ruled Wednesday that Trump lacked authority under IEEPA to impose the levies. The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage, wrote the three-judge panel. That use is impermissible not because it is unwise or ineffective, but because [IEEPA] does not allow it.”  “Tariff Ruling Put on Hold.” Wall Street Journal (May 29, 2025).

“The ruling came down in two cases — one filed by a group of small businesses and the other by 12 Democratic state attorneys general. There are at least five other cases challenging the tariffs pending at the Court of International Trade and other courts throughout the country (including one that dealt Trump another defeat Thursday), but Wednesday’s decision was importantly the first ruling on the merits that Trump had exceeded his authority in imposing such sweeping tariffs. It will also likely pave the way for a more definitive resolution — the administration quickly filed notices of appeal and moved to stay the ruling — perhaps going all the way up the Supreme Court …. There were recent signs of desperation on the part of the administration as the court’s skepticism became increasingly evident over the course of lengthy oral arguments in the two cases …. The litigation is not over, but the legal terrain is probably not going to get any better for Trump. In some respects, it may actually get worse as the case moves up on appeal. And although Trump has a Supreme Court that is heavily skewed in his favor — a 6-3 super-majority of Republican appointees that includes three named by Trump — it is far from clear that they will bail him out when all is said and done …. To fully understand the legal headwinds that continue to face the administration, it is helpful to zero in on a 50-year-old decision that quickly emerged as a central point of contention among the parties — and that the Court of International Trade relied upon heavily in ruling against Trump …. The case in question is known as United States v. Yoshida International, which affirmed President Richard Nixon’s power to impose a 10 percent tariff on imports that he announced in August 1971, under a statute known as the Trading with the Enemy Act (TWEA). The TWEA was the predecessor statute to the International Economic Emergency Powers Act (IEEPA), which Trump invoked to support his tariffs …. Nixon justified the tariff by claiming that an overvaluation of the U.S. dollar at the time had contributed to a trade imbalance and a deficit in America’s “balance of payments” (a broader economic measure that includes both trade and capital flows). The tariff was short-lived — Nixon terminated it in December 1971 after negotiating a realignment of exchange rates with a group of developed countries — but in the meantime, U.S. importers that paid the additional tax challenged Nixon’s legal authority …. One of those companies was Yoshida — now known as YKK — which challenged the tariff on zippers imported from Japan. The company filed a lawsuit and won in the lower court, but the decision was overturned on appeal several years later …. Yoshida at first glance appeared to be quite helpful to the Trump administration …. The court concluded that the tariff was legally justified under the TWEA to address the trade imbalance and pointed to language in the statute that authorized the president to “regulate” the “importation” of foreign goods in the event of an emergency …. For starters, the Yoshida decision rejected a key proposition that is at the heart of the government’s defense of Trump’s tariffs — the notion that courts have no power to review a president’s actions under IEEPA …. Nixon’s tariff was fixed at 10 percent and in place for less than five months. Trump’s tariff framework is far more ambitious, open-ended and has been all over the place since his inauguration — with the effective dates and applicable countries, rates, exceptions and concessions under seemingly constant revision …. And if Trump and some of his advisors are to be believed, there would be no end in sight. “If President Trump succeeds like he wants to succeed,” Trump’s trade adviser Peter Navarro said earlier this year, “we are going to structurally shift the American economy from one over-reliant on income taxes and the Internal Revenue Service, to one which is also reliant on tariff revenue and the External Revenue Service.”  …. That is a far cry from a five-month, supplemental 10 percent tariff like what Nixon imposed. ….Two other, subtler points in the Yoshida decision made things worse for the administration. ….First, Nixon’s tariff did not apply to all imports — only those that had been the subject of prior concessions under the government’s tariff schedule — and Nixon made clear in announcing the policy that the rates would nevertheless be capped at levels that Congress had previously set for the relevant goods. …. As a footnote in the Yoshida decision notes, Congress later enacted a specific statutory provision to address the problem that attracted the Nixon administration’s attention. That provision authorizes the president to impose tariffs in response to “large and serious … balance-of-payments deficits,” but it caps those tariffs at 15 percent and limits them to a duration of just 150 days unless Congress authorizes an extension …. There is no way to definitively predict how the appellate court — and eventually the Supreme Court — will approach the matter. But there is good reason to question whether Yoshida will spur them to come to Trump’s rescue …. To start, the country’s federal courts — led by the Supreme Court — have become more committed to textualism as a mode of statutory interpretation. That has generally led to more fine-grained and narrower readings of statutes passed by Congress …. It is far from clear, for instance, whether the current Supreme Court would agree with the conclusion in Yoshida that the power to “regulate” the “importation” of foreign property under the relevant U.S. law includes even a limited power to impose tariffs or otherwise tax those goods. The textual analysis of that position was debatable even at the time and, if anything, is even shakier now …. The Supreme Court’s conservatives have also developed and emphasized two broader interpretive doctrines and themes that suggest that the outcome in Yoshida would not be the same today …. Under the so-called major questions doctrine, when an executive action exceeds an undefined threshold of “economic and political significance,” the justices insist on a clear delegation of authority from Congress on the matter. That does not exist in the case of Trump’s claim to sweeping, open-ended and unreviewable tariff powers …. And in overruling the Chevron doctrine last summer, the court’s conservatives emphasized that judges should not simply defer to the executive branch’s interpretation of ambiguous statutes when evaluating legal questions …. Indeed, the Court of International Trade cited — though did not fully rely upon — both of these points in ruling against the administration. …. “Both the nondelegation and the major questions doctrines, even if not directly applied to strike down a statute as unconstitutional,” the court wrote, “provide useful tools for the court to interpret statutes so as to avoid constitutional problems.” The judges went on to explain that those “tools indicate that an unlimited delegation of tariff authority” from Congress to the president — which the Trump administration effectively claims that it has under IEEPA — “would constitute an improper abdication of legislative power to another branch of government.”

     What’s really interesting in tariff litigation against Trump’s tariffs? Six very interesting facts.

       One, there is an expanding legal campaign against these tariffs. Two, litigation has been filed by small firms (not large firms or multinational corporations) and various states — in both federal district courts and the Court of International Trade. Three, most interesting, it’s conservative non-profits funded by Koch and others that have funded many of these cases. Four, states (Oregon and California) have also brought litigation. Five, also to be noted is that attorney-generals of numerous states have signed off on amicus briefs. Six, needless to say, the administration is claiming reliance on tariffs is a necessary part of carrying out trade negotiations and foreign policy generally.

     Need to keep in mind that various presidents got the U.S. involved in wars (Korea, Vietnam, Iraq and Afghanistan) without a declaration of war — contrary to the fact that it’s Congress that has the exclusive right to declare war. Indeed, the Trump administration is already claiming in court that the president ha broad tariff power as part of his extensive foreign affairs and diplomatic powers under the Constitution.

      We’ll see how all this plays out in the federal district courts and the Court of International trade and then the Supreme Court.

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“The New Civil Liberties Alliance (NCLA), a nonprofit asked Ley to join a lawsuit challenging the constitutionality of the tariffs. Now in the vanguard of a rapidly expanding legal campaign arguing that the president overstepped his authority and usurped the role of Congress in applying levies to almost all imports entering the United States …. The NCLA describes itself as a nonpartisan organization that addresses violations of Americans’ civil liberties, but it has previously received financial support from conservative donor Charles Koch’s foundation — highlighting how backlash to Trump’s tariffs does not neatly follow traditional political lines …. Many large companies and top business executives have remained silent, in part for fear of drawing Trump’s ire, and no Fortune 500 company has pursued legal action …. Another nonprofit, Liberty Justice Center, has filed a suit in the U.S. Court of International Trade on behalf of a group of small businesses …. The states of Oregon and California have also sued. The complaints argue that no other president has used the International Emergency Economic Powers Act to implement tariffs, and that Trump cannot bypass Congress’s authority to draft tariff laws simply by invoking an emergency …. Tariffs now stand at 30 percent on imports from China after the Trump administration announced a deal Monday to lower tariffs for 90 days.” “Small-Business Owner and Tariff Litigation (Florida Federal Court.” Washington Post (May 20, 2025).

“A ruling that narrows IEEPA would have ripple effects across every domain in which economic instruments are used for strategic effect.” CIT Filing by Administratio (May 23, 2025).

“The starting point in thinking about the government’s power to impose tariffs is that under the US Constitution that power is given exclusively to the Congress, not the president. When the president announced his so-called “Liberation Day” tariffs on April 2 without going to Congress, he needed to have had in hand a pre-existing delegation of authority from the Congress for the tariffs to be legal. His announcement assigned tariff levels to nearly two hundred countries and territories. The grant of authority from Congress, if it occurred, must be very great indeed, nearly co-equal to that first given to Congress by the Constitution. The delegation to the president cannot have happened accidentally or simply be implied …. One would think that the issue is so clear-cut that the government would have no arguments to make, but it does have arguments and has made them. Here it is worth reflecting on the fact that what may appear to be inarguable on its face is often, in courts of law and in public discourse, very arguable. Take for example going to war. The Constitution assigns the sole authority to declare war to the Congress. But in the case of the Korean, Vietnam, and two Gulf Wars, all conflicts that were beyond all doubt “wars,” there was no Congressional declaration of war. Congressional approval was clear, it could be said, by Congress appropriating monies to support US participation in those conflicts. And besides, the president is commander-in-chief. Under the Constitution he has authority to conduct a war, not to declare it …. In a genuine balance of payments crisis in 1971, President Richard Nixon declared a national emergency. Using a World War I statute, the Trading with the Enemy Act (TWEA), in a way it had never been used before, he imposed a 10 percent import surcharge (a tariff) for four months to enable the US to abandon the gold standard and devalue the dollar, the latter with the agreement of America’s major trading partners. An importer of zippers, Yoshida International, challenged the president’s tariff. The CIT ruled that Nixon’s action was beyond what Congress had delegated. On appeal, the surcharge was upheld as an exercise of emergency authority properly delegated …. This did not sit well with the Congress. In 1974 it created a separate 150-day limited authority to deal with future balance of payments crises. In 1976, it enacted legislation to delete non-war situations from the 1917 TWEA and to terminate national emergencies by means of a vote of Congress. In 1977 it enacted the International Emergency Economic Powers Act (IEEPA), in which it provided authority to regulate trade whenever the president finds that an international economic emergency exists. Prior to the second Trump administration, presidents had declared 70 national emergencies but never used IEEPA to impose tariffs. Trump’s lawyers assert that this statute is a sufficiently broad delegation of the power over commerce that it authorizes his imposition of tariffs and his declaration of a national emergency …. The Senate sought to end this emergency, but its effort failed by a vote of 47–52. The Chinese president sought to remove all the tariffs by retaliating against American trade. The financial markets swooned when faced with the high levels of tariffs on both the Chinese and American sides. The resulting pressures appear to have caused President Trump to reduce substantially the tariffs on US imports from China. But the tariffs are suspended, not canceled …. The question of whether Trump’s broad tariffs will remain is therefore in the hands of the US courts …. How strong a bulwark against trade protectionism imposed at the sole discretion of the president will the courts prove to be?” “Trump’s Tariffs in Court.” Petersen Institute for International Economics (May 26, 2025).