‘Tariffs are taxes’: challenger to Trump’s tariffs speaks to supreme court
Michael Sainato
At the supreme court, Neal Katyal, the attorney arguing for private companies challenging Trump’s tariffs, said: “Tariffs are taxes. They take dollars from Americans pockets and deposit them in the US treasury. Our founders gave that taxing power to Congress alone. Yet here, the president bypassed Congress and imposed one of the largest tax increases in our lifetimes.”
He added:
Many doctrines explain why this is illegal, like the presumption that Congress speaks clearly when it imposes taxes and duties and the major questions doctrine, but it comes down to common sense. It’s simply implausible that in enacting IEEPA, Congress handed the president the power to overhaul the entire tariff system and the American economy in the process, allowing him to set and reset tariffs on any and every product from any and every country at any and all times.
Key events
Richard Luscombe
in Miami
Away from the supreme court for a moment, my colleague Richard Luscombe reports that we might hear more of Donald Trump’s thoughts about Tuesday’s election results shortly when he addresses the America Business Forum in Miami.
The president is the headline speaker at the two-day conference, which brings together influencers and leaders from the worlds of politics, business and sport.
According to White House officials, he will focus his remarks on economics, especially a number of trade deals he has taken credit for brokering around the globe. But Trump is known to veer off script, so we’ll be listening for any further commentary about the disappointing night for Republicans.
Earlier today, the conference heard via a video link from Venezuelan opposition leader and democracy activist Maria Corina Machado, winner last month of the Nobel Peace Prize the president had coveted.
Trump’s recent aggressive stance towards Venezuela and its president Nicolás Maduro, which has included military strikes on multiple alleged drugs trafficking vessels, was “correct”, she said: “[Maduro] is not a legitime head of state, he is head of a narco-terrorist structure. You need to cut those cash flows and that’s precisely what President Trump is doing to protect millions of lives. Maduro started this war and President Trump is ending that war.”
Other conference speakers include soccer star Lionel Messi, Argentina’s president Javier Melei, Trump’s Middle East envoy and adviser Steve Witkoff, and Amazon and Blue Origin founder Jeff Bezos.
Trump’s address is scheduled for 1pm ET. We’ll bring you anything noteworthy.
Kavanaugh asks why Congress would rationally give the president the power to shut down trade but not to take a less severe step, such as impose even a 1% tariff. He says it creates an “odd doughnut hole in the statute”.
But Benjamin Gutman, Oregon’s solicitor general, says the power to tax is fundamentally different. He says, to laughter:
It’s not a doughnut hole, it’s a different kind of pastry.
Katyal told the court that “we have no problem” with the president executing tariffs under trade acts, but “this president has torn up the entire tariff architecture”.
Pointing specifically to the example of Switzerland, a close US ally, where tariffs are currently 39% (and which, he notes, has a trade surplus with the United States), he said:
That is just not something any president has ever had the power to do in our history.
“There is no citation whatsoever in the government’s brief to any notion that the president has Article II tariff authority,” Katyal said. “In wartime, conquered territory, maybe. But this is not a wartime or conquered territory statute … They are tariffing the entire world in peacetime, and they are doing it asserting a power that no president in our history has ever had.”
Katyal also noted that Congress knows “exactly how to delegate its tariff powers”, and has done so in many instances for 238 years. “It’s done so explicitly, always with real limits. IEEPA looks nothing like those laws,” he said.
As he answered questions from the justices, he pushed back against the government’s characterization that revenue from the president’s tariffs is simply incidental. “Our founders didn’t give the president revenue-raising power, even in a time of war,” Katyal said.
‘Tariffs are taxes’: challenger to Trump’s tariffs speaks to supreme court
Michael Sainato
At the supreme court, Neal Katyal, the attorney arguing for private companies challenging Trump’s tariffs, said: “Tariffs are taxes. They take dollars from Americans pockets and deposit them in the US treasury. Our founders gave that taxing power to Congress alone. Yet here, the president bypassed Congress and imposed one of the largest tax increases in our lifetimes.”
He added:
Many doctrines explain why this is illegal, like the presumption that Congress speaks clearly when it imposes taxes and duties and the major questions doctrine, but it comes down to common sense. It’s simply implausible that in enacting IEEPA, Congress handed the president the power to overhaul the entire tariff system and the American economy in the process, allowing him to set and reset tariffs on any and every product from any and every country at any and all times.
Before the US solicitor general finished taking questions, Justice Ketanji Brown Jackson probed him a final time: “What is a little concerning to me is that your argument suggests that we should see the word ‘imposed’, the phrase ‘impose tariffs’… We don’t see that word. Instead, you take ‘regulate’ and say that must mean that.”
Conservative justices also voice doubt on Trump administration’s tariff argument
Michael Sainato
It’s worth noting that even conservative justices sound doubtful of the strength of the Trump administration’s position on the legality of its tariffs. “The vehicle is the imposition of taxes on Americans, and that has always been a core power of Congress,” said Chief Justice John Roberts.
After D John Sauer argued that the International Emergency Economic Powers Act, or IEEPA, enabled Trump to impose sweeping tariffs, Justice Brett Kavanaugh said: “One problem you have is that presidents since IEEPA have not done this.”
If you’re listening to the arguments, you will have heard the term “major questions doctrine” come up a few times. This is the legal principle that means a federal agency cannot create new, significant economic or political policies unless Congress uses plain language to authorize them.
Because the IEEPA doesn’t include specific terms like “tariffs” or “duties”, justices today have taken issue with the Trump administration’s argument today. Chief Justice Roberts questioned why the solicitor general doesn’t think the doctrine applies in this case.
Justice Gorsuch pushed Sauer even further, warning that the tariffs in this case could be “a one-way ratchet toward the gradual but continual accretion of power in the executive branch and away from the people’s elected representatives”.
Trump administration defends tariffs as ‘regulatory’
Interestingly, Sauer said today that the tariffs “are regulatory”.
“They are not revenue-raising tariffs, the fact that they raise revenue is only incidental,” he added.
Trump, however, has touted the levies as a huge boon for the American economy, including offsetting the national debt, and revitalizing domestic manufacturing.
