← Amicus With Dahlia Lithwick | Law, justice, and the courts
Amicus With Dahlia Lithwick | Law, justice, and the courts
When Tariffs Crashed Into SCOTUS
01:04:47
SCOTUS has let this president do pretty much anything. Are tariffs really where they draw the line?
Loading summary
Transcript57 lines
- [00:18]
A
I'm Dalia Lithwick and this is Amicus Slate's podcast about the courts and the law and the U.S. supreme Court. This past Wednesday, the court heard what might well become one of the signature cases of the 2025 term, the challenge to Donald J. Trump's so called liberation Day tariffs put in place to punish foreign countries running a trade deficit against the U.S. or against Canada just because, well, Canada. The consolidated cases Learning Resources versus Trump and Trump versus Vos selections come to the court as challenges to his very, very broadly stated authority to impose tariffs as he sees fit in order to regul an economic crisis that he has announced is currently happening. Trump asserts that he can do this under the International Emergency Economic powers Act of 1977 IPA, which permits the President to, quote, regulate transactions involving any property in which any foreign country or national thereof has any interest. This power can only be exercised to, quote, deal with an unusual and extraordinary threat. Mark Joseph Stern is here to join me for this inter hi Mark.
- [01:37]
B
Hi Dalia. On this week's show, we want to recap the oral arguments with Mark Bush. He's the Carl F. Landegger professor of International Business Diplomacy at the Edmund A. Walsh School of Foreign Service at Georgetown University. He's an expert on international trade policy and law and also signed on to an amicus brief on behalf of trade scholars explaining the history and context of aipa. Mark, welcome to the show.
- [02:01]
C
Thanks so much for having me. Great to be here.
- [02:04]
B
So it certainly sounded to us like Trump's tariffs were not going to survive contact with the Supreme Court based on our very unscientific nose counting from oral arguments on Wednesday. But before we get into that, could we just ask you to lay out the constitutional and statutory game board here so we understand the pieces we're playing with?
- [02:25]
C
IEEPA is, as you heard during the oral arguments, the follow through to the turmoil that was created when Nixon began to go off gold. And a lot of what you heard goes back to what everybody thought was learned from that moment in time, especially with respect to Nixon's temporary Import taxes of 10% for a short duration to deal with the consequences of the US Dollar and becoming largely floated and the collapse of it at that moment in time. So you heard a lot about something called tuia, which is the Trading with the Enemy act. And you heard about Yoshida, which was the court ruling that was twice heard, hence the term Yoshida 2, although they didn't make a lot of reference to Yoshida 2 versus Yoshida 1 during the hearings. So it all comes together and it gets worse. The plot thickens. Dickens, because you've got a lot of stuff happening in the 1974 Trade Act. And in particular, one item sticks out above the others, namely section 122 of the 1974 Trade act, which concerns balance of payments. And that was largely given by Congress to a President to deal with what Congress thought at the time Nixon was trying to do with his tariffs. Now you also heard during the hearings that there's some confusion about what Nixon may or may not have done with his tariffs. The Department of Justice would like us to believe that Nixon used twia, the Trading with the Enemy act. But it's not clear that that's really true. In terms of the upfront approach, it was more or less an ex post justification offered by his administration to explain what he had done. And that's going to matter, as will section 122 as the Supreme Court goes through the logic, including with respect to major questions and a little bit of this non delegation concern that several of the Justices mused over. So it's a crowded field. You've got a number of statutes from the 1974 Trade act against which they will compare IEPA. A big question will be what did AIPA enshrine? Because it follows from the 74 Trade Act. And the government would have us believe that it enshrined half of Yoshida. But as we heard at the Court of Appeals, there's another half to Yoshida. And the jurists really picked up on that. The second part is Nixon did his tariffs without violating US bound obligations and for a very short period. And that restraint was picked up on by several of the Justices as they asked, is there no limit in place here on what the President can do in your spin on ieepa? And that will be really interesting to read in the final verdict.
- [05:47]
A
So Mark, right out of the chute, there were some issues that seemed to be very salient very quickly. The Justices were really all in. And even though it was hours of argument, regardless of party or ideology, certain themes were coming up. You know, taxes versus tariffs and nouns and verbs and the verbs in IPA and what powers they granted and who pays the tariffs. This was in some sense very granular and very fact based and parsing of statutory language that you just flicked at. And then it was also kind of playing out at the highest levels of, you know, questions about separation of powers and delegation. And I wonder, it doesn't often happen that you have such a profound split screen where you are seeing both micro Micro analysis of, you know, the verbs in iipa and at the same time, really, I think profound questions about the limits of presidential power.
- [06:51]
C
I was a little surprised by the fact that there wasn't more attention to major questions and non delegation. And you even heard quips with respect to Neil Katyal potentially having his reputation known going forward with respect to non delegation. That certainly drew a giggle from the justices. Part of what happened with the granular minutiae, as you note, was because the Department of Justice really pinned its hopes on an absurd argument about regulatory tariffs versus revenue raising tariffs. And when you listen to General Sauer constantly rehearsing this theme of foreign facing tariffs as if somehow they're not taxes, as if somehow the American citizen at the grocery store isn't paying the price, as if American businesses on their imported inputs aren't paying the price. And perhaps not surprisingly, the justices went down that rabbit hole because there was such an effective opening line from Katyal that tariffs are taxes. And what a great way to start the critique, the assault on this spin on aipa. But the justices seemed willing to at least listen to the idea that maybe there was more there there. So they compared tariffs to quotas. They asked, could the President stop trade? Could there be a ban on trade? Could there be some relationship between tariff and license? And if a license has a fee, does the fee constitute a tax? And would the plaintiffs be okay if it does? So my thoughts feeling was at the time listening that, wow, they're going to entertain this. And moreover, wow, Sauer is really pinning his hopes on this absurd distinction which no economist would venture forward to propose. I myself on Wednesday had a piece come out on the Hill with two of my economics colleagues where we simply were baffled by and argued against this crazy talk about intent defining a tariff differently than what it is, which is it is a tax on imports. And I have to say that one part as a scholar in this area that really I wish could have been picked up but realize it couldn't, there was no economics, there was no open, honest discussion about how absurd all of this is from an economics perspective. No discussion about how with the exception of Katyal mentioning we've been running a trade deficit in goods since the 1970s. They're not persistent in a bad sense. They're persistent in the sense that goods don't reflect our comparative advantage. And the government's effort on Liberation Day to define out services, when in fact, like all rich countries, we are a services economy, is really hard to square with what is at stake. And as you Point out that leads us back to the macro perspective. This case is so much bigger than trade. This is a separation of powers case, and it deserves to be taken very seriously precisely because of that. But there are some basics in economics that would have shed more light on what a grab this is with respect to wanting a means of raising revenue. And the final point I'll make about that is, as the plaintiffs pointed out, the DOJ's submission was in fact the worst possible foot forward, inasmuch as, like we've been hearing since Liberation Day, these are a tax grab. We've heard they're raising some crazy number of billions of dollars. We've heard that maybe we should have an external revenue agency. We've heard that maybe these can replace income taxes in the United States. Every deal has led to the President boasting about the haul, the haul of revenue, the haul of revenue through tax collection. So what a big morass. But because of this going out on a limb with respect to regulatory versus revenue raising tariffs, the micro, in my view, to tap your question, largely overshadowed the macro in a way that might have surprised many who listened in.
- [11:36]
B
Yeah, it was so interesting because a lot of economists, including you, weighed in on this case through amicus briefs, and they all sort of made the same point, which I think is Econ 101, that a trade deficit is exactly matched by a country's net capital inflow. So what the government is calling a deficit could also be described as a foreign investment surplus. Right. It is a surplus that has existed for more than half a century. As Neil Kadia kept saying over and over again, that sounds good when you put it that way, but the reality is that it's neither good nor bad. It's just the reality of a wealthy nation that buys more from overseas than it sells. Right. There's nothing about it that is a crisis, let alone a threat or an emergency. And the Justices didn't really grapple with that.
- [12:22]
C
That's right. And part of the frustration with the amicus brief is that we couldn't do that either in the sense that we had to stay to the narrow and short with respect to Section 122 being the correct statute, not IEEPA, and especially given the history and the legislative Backdrop to section 122, trying to make that case. But I can tell you I got a Nobel laureate economist to sign off on our amicus brief, Joe Stiglitz, and his first email back to me was, why stop there? Let's tell them this doesn't make any economic Sense. Why aren't you talking about the Constitution? Why aren't you talking about this, that and the other? The number of economists who signed our amicus brief and who begged for more because of the absurdity of the underlying economic logic. And the one thing I haven't heard in the media played up nearly enough was the logical conclusion of Sauerkraut. He said in defense of his spin that this is a foreign facing tariff, not a revenue generating tariff. That in the President's ideal state of the world there is no revenue collected. Why? Because every business has moved to the United States and is sourcing and doing everything domestically such that the tariff wall is irrelevant and not a revenue raising mechanism. Do you realize what that means? That is autarky. And I have to say again, Economics 101. That's why you've never heard the President give a press conference or a speech about what his strategy is with respect to these tariffs. Because that is the logical conclusion that Sauer laid out and no American would vote for that. The tariffs are not popular. Polls show that 60 to 70% of Americans are against them. But I could not believe that Sauer said that. I get logically why he had to concede it, but I wish more in the media would pick up on the fact that he did utter that. And that should be one of the scariest econ realities coming out of this litigation.
- [14:35]
B
As frustrating and really exasperating as it was to hear the Justices sort of fumble their way through, through a macro economic illiterate argument from the Solicitor General. There was some skepticism toward this core idea that you've raised, Mark, about, you know, these are not revenue raising tariffs. Right. There is merely regulatory tariffs. Let's listen to a clip of, of Chief Justice John Roberts drilling down on that.
- [15:00]
D
Yes, of course, tariffs, dealings with foreign powers. But the vehicle is imposition of taxes on, on Americans. And that has always been the core power of Congress. So to have the President's foreign affairs power trump that, that basic power for Congress seems to me to kind of.
- [15:22]
E
At least.
- [15:24]
D
Neutralize between the two powers, the executive power and the legislative power.
- [15:30]
F
Let me say two things in response to that. First, the notion that these are the taxes are all borne by Americans, are not borne by foreign, foreign producers who are, whose goods are imported is empirically that's not, there's no basis for that in the record. It's actually a mix.
- [15:44]
D
Who pays the tariffs? If a tariff is imposed on automobiles, who pays them.
- [15:52]
B
So I think that at least some of the Justices realize that these Are taxes on American consumers at bottom? Did that hearten you at all? Did it make you feel like, okay, some of these guys are smart enough to understand that this whole smokescreen is obscuring the reality that the President is simply imposing a tax regime unilaterally on Americans.
- [16:14]
C
I was elated to hear that line of questioning by several, including I thought best articulated by Sotomayor. Wow, what a relief to hear them utter that line, terrorists are taxes. And in that regard, one of my favorite brief submitted by anyone was we pay the tariffs. And in their brief rivaled perhaps only by the watch association representing those who both make and repair watches both here and abroad, we Pay the Tariffs as a group did a terrific job setting out this logic and very little else. You could almost feel their plea in as much as they didn't engage with the law nearly as much as the other briefs. They just wanted to make that simple point which Katyal opened with and which several of the Justices then echoed. They're attacks, there's no mystery. And while Sauer wanted us to believe that the pass through rate isn't 100%, and he came up with this far fetched notion that maybe 70% of the tariff is eaten by foreign exporters, which is absurd, the evidence we have Both under Trump 1.0 and to date, especially by virtue of the Yale Budget Lab, is that the pass through rate is about 80% to Americans, maybe 20% pricing to market by exporters abroad. But there's no way to misunderstand these as anything other than what they are, which is a tax and a tax, mind you, that disproportionately hurts American manufacturers because you have to keep in mind about half of what the US Imports include intermediate inputs which are then used for production, including to export. And so this manufacturing renaissance that the administration likes to dangle in front of us is far fetched in as much as we're handicapping precisely those that we wish to champion.
- [18:19]
A
You know, it's such an interesting problem because we talk all the time about the moments in which the Justices substitute their own knowledge for, you know, what's in the brief and the submissions, what's on the record, you know, about science, about climate change, about epidemiology. I mean, we hear it all the time and they're so often wrong. Mark, I feel like I'm hearing you a little bit saying this was a situation where just having some rudimentary sense of who pays tariffs and how they work was an actual bonus because it got to pierce through what Sauer was saying, and I just feel like I want to mark that as a gear change, because we don't often laud the Justices for knowing that which is knowable, but they don't always find it out. So it does seem like it is a moment that we should kind of credit where it's due. They at least took the time to figure out the stakes of this case. You had said earlier they didn't spend enough time on the sort of meta questions and that, you know, this got very quickly into a very wonky econ problem without the big separation of powers scrutiny that you would have liked to see or that I think the case demanded. But I do want to talk about the major questions doctrine. You mentioned it. This seemed to just be a roadblock and a railroad crossing, a bridge too far from John Roberts. Right from the beginning, we heard General Sauer saying, there's no issue here because this is foreign policy and therefore it's inapposite to even raise it. But very early on in the oral argument, we heard the Chief justice peeling off and more or less saying, you're not going to get past this with me.
- [20:10]
D
Some time ago, you dismissed the applicability of the major questions doctrine, and I want you to explain that a little bit more. I mean, it seems that it might be directly applicable. You have a claim source, an IPA that had never before been used to justify tariffs. No one has argued that it does until this particular case. Congress uses tariffs and other provisions, but not here. And yet, and correct me on this if I'm not right about it, the justification is being used for power to impose tariffs on any product from any country for, in any amount, for any length of time. That seems like, I'm not suggesting it's not there, but it does seem like that's maybe authority, and the basis for the claim seems to be a misfit. So why doesn't it apply again?
- [21:09]
F
Well, we agree that it's a major power, but it's in the context of a statute that is explicitly conferring major powers that the point of the statute is to confer major powers to address major questions which are emergencies. So it'd be unusual to say, look at the statute and say, we're not going to find a major power.
- [21:24]
D
Well, but the exercise, the power is to impose tariffs. Right. And the statute doesn't use the word tariffs.
- [21:31]
A
Is it your sense that that was in a very, very profound way, the Chief justice saying, hey, if the rules applied to President Biden, they apply here, and this is insurmountable.
- [21:44]
C
In my view, you'd like to think so. And listen to the defense by Sauer. He uttered the word major more times than I could count. And it was a major delegation of major powers for major circumstances. And he was clearly playing on this idea that with these foreign facing terrorists being all about quite definitionally foreign affairs, that there should be wild deference and that major questions shouldn't apply. And the clip you played is pushback. And you heard that pushback from most, but you had to have been surprised by how little that seemed to temper the enthusiasm for Sauer to press the point. It was almost as though he wasn't updating his priors. He had pegged his hopes to this one line of argumentation, and he wasn't gonna let it go, despite the fact that the pushback was there from most, if not all. And as you say, what's good for Biden is good for Trump. It is almost impossible to downward revise how big a reach these tariffs are having on domestic economic life of the United States. How could you not apply? Major questions. And as you say, they were quick to hold the line on it for the most part. I was just surprised that we didn't get into as much theory behind it. You had some back and forth on certain cases and that was as much as we really got into it. Whereas by the time some of the more conservative jurists were questioning Katyal about non delegation, it was almost as though, look, we're done and let's round this one out, let's check all the relevant boxes. We know what's been raised, we know what's in the briefs, we know. Let's just make sure we've done a definitive job because of the magnitude of what's at stake here. And I just want to add that Trump overplayed his hand. These were big tariffs and they made a big impact. And because of their bigness, he denied the Supreme Court the opportunity to come up with a narrow ruling. And that shouldn't be let go. It's really something that has to be emphasized. The bigness of this action, the bigness of the reciprocals and the, and the trafficking tariffs. The justices couldn't hide from that. You can't equate these with what Nixon did with a short term 10% tariff. And even when Nixon did that, he was reprimanded in Yoshida 2 for not having the clear authority. But hey, he's respecting the duration, he's respecting the short term of this. They're modest, they're small, Trump's are not Modest. They're not small.
- [24:45]
B
I think that's a really smart point. At the same time, I do want to say I wasn't surprised that there wasn't as much discussion of the theory behind the major questions doctrine, because I do kind of think it's something that the Republican appointed justices largely made up to justify striking down a lot of President Joe Biden's policies. You know, it's. It's this idea that when a president wants to enact a policy that has vast economic or political significance, he needs really clear congressional authorization. But that is a fundamentally subjective test. And I guess I sort of saw this case as an opportunity for some of those justices who voted against so many of Biden's initiatives to show their consistency and principle and to say, no, it's not something that we only made up to rule against Democratic presidents. We're going to apply it here, too. And think about how they've used it in the past. They struck down Biden's climate regulations, the student loan forgiveness plan, the eviction moratorium, and you know, those were multibillion dollar policies. But these tariffs are set to raise, according to Trump, trillions of dollars in their lifetime. And so if the major questions doctrine has any, any legitimacy whatsoever, it had to be used here. And yet the, in my view, the problem remains that this is a textual doctrine that really gives courts a lot of wiggle room to knock down a law or an executive action that they just personally don't like. What do you make of that?
- [26:14]
C
That's why you heard so much attention to the other statutes. And while it didn't fall under the theory of major questions, it was certainly meant to calib whether, in fact, Congress, if it had intended tariffs, couldn't have said tariffs. And so when you compare to the various other statutes, like section 301, like section 232, like section 338, which they had to bring out of the grave from the 1930 Tariff act, and of course, Section 122. A lot of the questioning, while not theoretical, was, well, why were they able to say import duty or tariff in those statutes and they couldn't have mustered the courage to figure out tariff under iipa? And I don't know about you, but wow, how many times did Sauer revert back to regulate with this expansive view? And for Katyal to come back and say, you know, we did this check 1500 utterances of the word regulate throughout various statutes and not one of them offered as a synonym for tariff. So where's this disconnect it was kind of major questions in the mud. It was. Take a look. Lots of opportunities. Hard to believe that after witnessing Nixon and his 10% tariffs, Congress couldn't have said tariff. Why is it that you see regulate to be so expansive in scope when in fact it doesn't jibe with either the legislative history or, and let's keep this one in mind, too, use of IEEPA since its debut until now, no other president has used the IEEPA to get terrorists on the books. And perhaps the most fundamental retort to Sauer was, can you imagine ever using any of those statutes? If you had IEEPA to employ tariffs, why would you ever submit to the guardrails of those other statutes? If you've got this deus ex makina that works wonders and is unfettered by any congressional guardrail? That, to me was one of the best lines uttered and certainly deserved a lot more prominence.
- [28:37]
B
So Justice Amy Coney Barrett had a really incisive line of questioning about exactly that and the capacious definition of regulate importation that the government was putting forward. Let's listen to this clip of her grilling Solicitor General Sauer and then Justice Sonia Sotomayor actually jumping in to provide backup when Sauer wouldn't give her a straight answer.
- [28:57]
G
Can you point to any other place in the code or any other time in history where that phrase together regulate importation has been used to confer tariff imposing authority?
- [29:08]
F
Well, as to regulate importation, that was held in tweet, so obviously. And that's okay.
- [29:13]
G
Okay, so an intermediate appellate court held it in twia, but you just told Justice Kavanaugh that wasn't your lead argument, that your lead argument was this long history of the phrase regulate importation being understood to include tariff authority. So my question is, has there ever been another instance in which a statute has conferred used that language to confer the power?
- [29:32]
A
Putting aside Yoshida, I mean, obviously other.
- [29:34]
F
Statutory example is just imports. The cases we rely on on our cases where, for example, in Gibbons, it's Ogden and justice stories, but that just.
- [29:40]
G
Shows the word can be used that way. None of those cases talked about it as conferring tariff authority. I understood you to be citing McGoldrick and Gibbons and those cases just to show that it's possible to say that regulating commerce includes the power to tariff.
- [29:56]
F
I think. I think our argument goes a bit further than that as interpretive matter, because if you look at that history, the history of delegates.
- [30:01]
C
Could you just answer the Justice's question.
- [30:04]
B
To you, Mark, does that suggest that Barrett's a vote against the government here. Is it a pretty clear cut case?
- [30:10]
C
She asked a lot of really interesting questions. She wanted logic. She wanted definitions. And my sense is that she's at least skeptical, if not opposed to this deployment of IPA to do such wide, sweeping, unfettered tariffs.
- [30:31]
A
And now time for a short break.
- [30:35]
H
This episode is brought to you by Planned Parenthood Federation of America. The courts matter. The law matters. And so do the people behind the cases, the patients, families and communities Planned Parenthood serves every day this year. Attacks on reproductive freedom have been relentless. The Trump administration and Congress. Congress passed a law to defund Planned Parenthood, a move that puts the health of 1.1 million patients across the country at risk. Planned Parenthood is in court to keep this law from taking away care from millions of people. But they urgently need your help. You can rush your gift by visiting plannedparenthood.org defend no matter the size, your donation makes a real difference. Helping Planned Parenthood protect access to care when it matters most. Don't wait. Donate today@planned parenthood.org defend.
- [31:33]
A
As the air turns cooler and the holidays are upon us, comfort becomes in fact the very best gift of all. I have been loving wearing my Mongolian cashmere quince turtleneck over top of my Quince slip dress that with high boots and I look kind of intentional and put together and very much like I have an outfit to wear for Thanksgiving. By working directly with ethical top tier factories, Quince skips the middleman and offers prices 50% less than similar brands. Step into the holiday season with layers made to feel good, look polished and last from Quince, perfect for gifting or keeping for yourself. Go to quince.comamicus for free shipping on your order. And 365 day returns now available in Canada too. That's Q-U-I-N-C-E.comamicus to get free shipping and 365 day returns. Quints.comamicus now back to our conversation with Mark Bush of Georgetown University Law School. Mark, you just said, and I think it was such a through line in this case that one really ongoing theme that transcended, I think, you know, partisanship and ideology was this question of once you give over this power, how do you ever claw it back? It will be used forever. And I think another version of that same question was this question of the one way ratchet of power from Congress to the president. And you had written a piece in the Hill previewing what was gonna be argued eventually at the court and you wrote this quote, another key difference. The Supreme Court will be thinking about precedent. A ruling that blesses Trump's use of the act for tariffs would not just rewrite trade law. It would expand the President's emergency powers into new terrain with no obvious limiting principle. Future could invoke it to sidestep Congress on taxes, regulations, even domestic commerce, so long as they framed it as a foreign policy emergency, end quote. And it was sort of fascinating to have the court almost across the boards wake up to the reality of what happens when you give away congressional prerogatives to the executive, not just this executive, but to any executive. And I heard that anxiety pinging around the room in ways that felt actually quite unfamiliar to me from this Roberts court.
- [34:17]
C
I agree, there was that mention. Could you imagine the next president doing whatever he or she wanted in the name of climate change? That example has been bandied about by the Wall Street Journal editorial page for months now. And, and it was almost as though the justices grabbed it and ran with it. And what I really appreciated in certain questions was this reminiscing about the historical backdrop and legislative history of aipa. We should keep in mind AIPA was written to rein in the President. And when we, for the sake of writing the amicus brief, got into that legislative history, the committees weighing in were very clear about this, that emergencies were willy nilly created and never ended. And to this day, according to the Congressional Research Service, many of those emergencies are still in effect today, that is from the 1970s. And Congress wanted to rein in these non war emergency powers, wanted some guardrails with respect to what the President thought he could do. And what was also interesting was this vote, which is now slated on the underlying national emergency for the House at the end of January. You saw several votes last week in the Senate that's not really a guardrail anymore. And you heard the justices say that, they said to Sauer, where's the guardrail on ipa? And Sauer kept saying, well, there's a ability for Congress to rein it in. Well, not really in the sense that it, it takes a 2/3 super majority joint resolution to ride over a presidential veto to bring the national emergency, which is the underlying crisis, to an end. And like you say, you could almost feel the tension in the room. What would this mean going forward if we are essentially going back in time to Pre ieepa, where everything can and will be a national emergency. But even at the dawn of aipa, there was a sense that the guardrail, the vote on the underlying emergency was credible. It's no longer so and so. What will happen in the future, including climate change, which of course will be garnering a lot of attention and has in global trade circles for quite some time. As the WTO has long grappled with. Could you imagine the National Security exception being used to essentially do whatever you want in trade in a lawful means under WTO rules? That has been bandied about at the UN's cop for years now. And so the Wall Street Journal editorial board is not making this one up. It's been front and center. Moreover, we've had discussion in the global economy about a peace clause that would prevent litigation for illegal subsidies on climate change. We know that green protectionism will be very much in vogue for years to come, if not forever. And the Justices were pushing in that direction, asking if we had a president very concerned with climate change. Are you saying that IEEPA is licensed to do whatever, whenever to whomever? That would be the equivalent of get out of jail, card free at the WTO under the National Security exception. But AIP is not that. It's a non war emergency power. So the two are really interesting in parallel, but speak to the same direction.
- [38:06]
B
It was just wild to me when Justice Gorsuch asked Sauer, you know, under your theory of AIPA, could the next president impose a 50% tariff on gas powered cars? And Sauer said, probably, yes. You know, he said, well, Trump wouldn't do it because he thinks climate change is a hoax, but the next president, under our theory, he had to acknowledge that's where the logic took him. And I guess I want to stay on this question of what counts as an emergency. I thought that that would be a bigger part of arguments. You know, there was so much talk about regulating importation and what it means and the major questions doctrine, not a whole lot of chatter about whether these are truly emergencies. We already talked about how the justices kind of accepted that a so called trade deficit is, is a bad thing. But Trump is also claiming that fentanyl is an emergency. Right? That he needs to slap tariffs on China, Mexico and Canada to stop the flow of fentanyl in. There was a fascinating moment where Justice Elena Kagan stepped in to make a point very similar to what you just made, Mark. Maybe she had recently read your amicus brief, but she's basically just saying, you know, we have emergencies all the time that kind of don't mean anything anymore. Let's take a listen.
- [39:13]
I
I mean, you yourself think that the Declaration of Emergency is unreviewable. And even if it's not unreviewable. It's, of course, the kind of determination that this Court would grant considerable deference to the, to the President on. So that doesn't seem like much of a constraint, but it is. And in fact, you know, we've had cases recently which deals with the President's emergency powers and it turns out we're in emergencies, everything, all the time, about like half the world.
- [39:39]
B
So do you think that reflected any broader skepticism among the Justices that the emergencies cited here aren't legit?
- [39:46]
C
There's no reason to doubt that. In fact, it should have been the first conclusion drawn from the historical context and the legislative history of iipa. I would have liked it to have been more focused, however, more explicitly targeting the fact that as we started out our conversation, a goods trade deficit is not an emergency. And if we were to define it as such, then we will be in an emergency for forever. Because it was a sleight of hand that led the government to drop services trade from the calculations and to run with a goods only. Let's just keep in mind that manufacturing is 7% of the US economy in terms of employment. We're all services oriented. And that mathematical trick to blossom the trade deficit by only looking at goods, even with all of that trickery, it's still not an emergency. As several have pointed out, you are running a deficit with your dentist. When you leave the office of your dentist and you're not complaining on your way out or demanding that your dentist procure from you services before you depart, this is a sign of wealth. It is not an emergency. But to your point, yeah, there's been a lot of studies demonstrating that we have since IPA and before lived in a permanent doomsday scenario where it's not about whether there's an emergency, it's just which one is getting emphasized. And this was really a bridge too far for Trump to call a persistent goods trade deficit a national emergency takes a lot of massaging. And Sauer couldn't pull it off. Listen to what he said. He said hollowing out of our defense industrial base. That is not the persistent goods trade deficit. He talked about national security issues and didn't like when he was reminded by the justices about section 232. There were a lot of moving parts and. And he had no choice but to bring them all in because it wasn't selling. And to raise this question is exactly right. What would constitute a national emergency and what are we to do about it when it's abused? Given that there really isn't a guardrail in place since 2/3 supermajority. You're never going to achieve that in a joint resolution from Congress, that is.
- [42:17]
A
Time now for a short break. Most of us indulge during the holidays, but the extra cleaning you're doing means you may be putting more microplastics into your body as well, and that is not the extra helping you had in mind. We are loving Blueland's foaming hand soap right now. The tablets in Evergreen smell like November. Consider switching to blueland. Their products meet the highest standard of clean because they're effective yet. Gentlemen on the planet and your family. Blueland was also named an EPA Safer Choice Partner of the Year. From cleaning sprays and toilet bowl cleaner to dishwasher and laundry detergent tablets, Blueland's formulas are free from chlorine, bleach and harsh chemicals. 100% microplastic free and made with certified clean ingredients that are safe to use around your family. You'll love not having to choose between the safe option and what actually gets your home clean. Bluend has a special offer for listeners right now. Get 15% off your first order by going to blueland.comamicus. you won't want to miss this. Blueland.comamicus for 15% off. That's blueland.comamicus to get 15% off this podcast is brought to you by Progressive Insurance. Do you ever find yourself playing the budgeting game, shifting a little money here, a little there, and and hoping it all works out well? With the name your price tool from Progressive, you can be a better budgeter and potentially lower your insurance bill too. You tell Progressive what you want to pay for car insurance and they'll help find you options within your budget. Try it today@progressive.com Progressive Casualty Insurance Company and affiliates Price and coverage match limited by state law, not available in all states. This show is brought to you by BetterHelp. As seasons change and days grow darker sooner, it's a good time to reconnect with loved ones and remind the people in your life that you're there. Just as it can take a little courage to send that message or grab coffee with someone you haven't seen in a while. Reaching out for therapy can feel difficult too, but it's worth it, and it almost always leaves people wondering, why didn't I do this Sooner? With over 30,000 therapists, BetterHelp is one of the world's largest online therapy platforms, having served over 5 million people globally. A short questionnaire helps identify your needs and preferences, and BetterHelp's 12 plus years of industry leading match fulfillment rate means they typically find the right therapist for you the first time this month. Don't wait to reach out. Whether you're checking, checking in on a friend or reaching out to a therapist yourself, BetterHelp makes it easier to take that first step. Amicus Listeners get 10% off their first months at betterhelp.com amicus that's betterhelp.com amicus Back to our conversation with Mark Bush. So I think Mark Stern and I probably are landing at the same question, which is we are in a larger climate where with every passing week, Mark, we have a district court judge saying, I don't believe the administration. It isn't an emergency in Portland, it's not an emergency in Chicago. We don't have a fentanyl emergency. I mean, we are seeing real skepticism now. This is, in fact, the first time I think we're seeing real skepticism from the Supreme Court, though we saw absolute credulity around birthright citizenship. And it pains me to say we saw more than absolute credulity for these kinds of arguments around immunity. And I'm very curious what I think, I'm curious what both of you think, whether this is some kind of watershed moment where the court, the majority of the court at least, has decided to sort of puncture the I mean, everything you're saying about John Sauer's presentation reminds me this is the guy who won with Seal Team Six, right? He must have believed that anything he did in there, including like burping the Alphabet, was gonna get six votes. And I wonder if this signals, because you're right, that the administration overreach was profound and then the solicitor general's overreach was profound. Is the problem an emboldened Trump administration and an emboldened sg or is the problem the court now willing to look with real fact based, critical skepticism on claims that they would have simply accepted six months ago?
- [47:02]
C
My sense is your answer to one of the questions we were talking about before is the right one. It's the future. There's just too big a stake looking forward in this case. Here's the hypothetical. What if Trump didn't do his Liberation Day tariffs on the scale he did? What if he did a 5% universal, but it wasn't universal across every trade partner. It was limited to a couple of those countries deemed to be the coalition of the unwilling. Would we be here? Would we be having this discussion? My sense is it was really the bigness of the tariffs and what this meant in terms of separation of powers going forward, that led to some of this more strict scrutiny of the underlying logic. And I did enjoy several of the justices saying, is this your logic? Yes. Clear away the details. Clear away your read of several hundred years old case law. Is this the conclusion of your logic? I think this would have been a very different story had it more closely mirrored Nixon's actions. And when you read the majority in the Court of Appeals, they essentially gave that much away. Now, you would have imagined in this taps the other part of your question that the administration which bragged that that dissent at the Court of Appeals gave them a roadmap for winning, well, if it did, they didn't play it. If that dissent was, in fact a viable roadmap, it's hard to see how it came to life in anything other than these rhetorical sleights of hand. And when you have such grave consequences from getting this decision wrong going forward on separation of powers, it's enlightening, it's encouraging. I don't know what the right term is that the justices gave the line of questioning that they did, but fundamentally, I don't think most of them believed that there was a national emergency at issue here. And I don't think they liked the idea of what it would mean going forward if in another national emergency defined as, say, climate change, a president used his or her powers to do something as big to remedy that situation without Congress's blessing.
- [49:26]
B
I guess I just still find that kind of surprising because as Dalia just mentioned, you know, this is Jon Sauer. This is the guy who argued and won the presidential immunity case, who more or less had to admit to the Supreme Court that a President could send Seal Team 6 to assassinate a political rival and then claim absolute criminal immunity. This is a guy who has been lying to the Supreme Court for the past 10 months about the facts on the ground in all of these different cases where district court judges, the ones who are actually finding facts, have said, you are not telling us the truth. And. And the Supreme Court's Republican appointees still rubber stamp whatever, you know, distorted version of events the Trump administration wants to pass off as truth and in immigration and all kinds of executive power cases. And so why draw the line here? I mean, I kind of cheekily suggested in my piece on Wednesday that it might be because these justices hate taxes more than they love Trump. And I mean, you know, part of that is there's a lot of cross pressure from the conservative legal movement here. You know, the Chamber of Commerce filed a brief urging the justices to strike down these tariffs. The market doesn't love them. A lot of big businesses are aligned against Trump here, which is unusual. Do you think there is anything more to it or do you think that perhaps this is the justices on the right being willing to accept reality and accept the actual facts in this case because they happen to align with their own prior views about like whether or not the president should slap Americans with billions of dollars of new taxes?
- [51:03]
C
I like your taxes hypothesis. Let me give you one more that actually was raised by one of the justices. The additional tax in retaliation for Canada's ad. It actually came up and I think that should have been exhibit A offered by the plaintiffs in this case. You want to know how willy nilly these terrorists are. The President of the United States responded to the province of Ontario running what is a true ad featuring the words of Ronald Reagan opposing tariffs, and he raised the tariff on Canada in retaliation. It's a bridge too far. It demonstrates how lunatic these terrorists are in their application. You didn't hear condemnation of the policy. And even the Court of Appeals was very quick to start its opinion by saying we are not commenting on the policy at issue. We're commenting on whether it's lawful to do this and the policy. However, even if you leave that aside, it just seeps through every mechanism employed, every rationale offered. It was too much. So let's add that to your they hate taxes a lot, but they also hate ad hocery. And I think it would be the ultimate irony if the premier of Ontario turns out to have given the Supreme Court exactly what Trump feared most. But not because of the ad, because of how Trump responded to the ad. Wouldn't that be just a great twist in the story?
- [52:41]
A
I want to ask you one more atmospherics question to which my answer is going to be no. But something I was asked a lot on Wednesday during arguments was whether I thought the just blowout election results had any, any impact on the justices stiffening their spine about Trump stiffening their spine about the policy itself. Or maybe, you know, the, the more charitable version of that question was if you believe what the academics are calling the SCOTUS appeasement theory, right, that they're saving their capital for something that is massive. Maybe the feeling that we are getting closer to the thing that would allow the court to spend it down. Do you believe any of that affected anything that happened in the room on Wednesday? Again, I don't think the justices think that way, but I am curious if you think that there is some mood shift among the justices that has to do with, and I know you've answered it was just too big. And maybe that's where we leave this, but that there was at least a vibe among the justices that today is the day we start to use what power we have to avoid catastrophe.
- [54:02]
C
I agree with you. The answer is no. But I also believe that you have to start a step beforehand. The route in the elections reflected something, and that something could very well be correlated with the bigness of the moment. So you add big tariffs to the bigness of the moment. And obviously, questions about tariffs and how they're polling, questions about the President's executive authority and how it's polling, and you may be able to weave that into a nice synthetic whole. But no, this was, in my view, the justices reeling at times from the lack of logic and from the fact that the data don't seem to bear out a lot of the underlying emergency or the preoccupation with trade deficits. And I would have liked more on the fact that, as we argue in the amicus that we submitted, there's an alternative. If you were serious about the balance of payments problem, which, empirically speaking for the United States is a trade deficit problem, then we have a tool that Congress gave the executive which actually says tariff. That would have been the right instrument. But kind of looping back to where we started, the ultimate irony about our amicus is that while we do believe there is an appropriate statute, we don't believe that tariffs are the answer. I want to make that really clear. We argue in our amicus that section 122 is the right statute for a trade deficit problem manifest through the balance of payments. But we don't believe for a second that a tariff would redo the trade deficit in a way that the Trump administration believes. And I would add, virtually no economist would believe that either. And that is where we started our conversation today. Much of what is frustrating, listening to how the hearings went, was the lack of economics. It would have helped. It would have calibrated. It would have reminded everybody, not just the justices, but those in the room and those listening, of the gravity of the moment. As someone who teaches trade policy and trade law, I have begged my students, my audiences, please understand the gravity of the moment. This puts Smoot Hawley to bed. This is qualitatively different than anything we have or could have imagined from Tariffman. And the fact that it has made the country less safe, less looked up to, less strong with allies is testament to how narrow the government's argument about Foreign facing tariffs was what a mistake to one, parse the tariff in a meaningless way, but two, to constantly talk about foreign facing minus the cost that we have incurred. I appreciate that none of that bears on the law, but as backdrops, it really would have been nice if there had been a bit more of a reality check. En route to discussing why did they write section 301? Why did they write section 232? Why did they write section 122 or 338? It's really one of the most interesting parts of this case that no one seems to have picked up on. Do you hear how antiquated our trade acts are? We have nothing modern. And what's happening in 1974, it's not just Nixon and going off gold. The global economy is the wild wild West. For those of us who study the General Agreement on Tariffs and Trade and the wto, ask any of these scholars who were there at the moment that these institutions were created. The global economy was the wild wild West. We did not have codified rules. We didn't even know how dispute settlement on a global Stage worked until 1979. The global economy was not what the critics of globalization deem it to be. This law based system that ran roughshod over sovereignty. Our 1974 Trade act is scripted for a time gone by. And if Congress doesn't deal with the outcome of this ruling, pro or con, we're going to be in serious trouble going forward and we're going to be a less secure nation because of it.
- [58:47]
B
I think part of what you're saying about the elections, Mark, is that voters didn't exactly reward Trump for his policies. That much is clear. And you know, one of those big policies, a major policy, was, you know, the tariff regime that has led to so many price hikes that consumers are feeling, everyone in the United States is feeling this. And in that sense, this case could almost give Trump an off ramp, right? Like this could be in theory a win for everyone. If the Supreme Court does strike down the tariffs, as seems likely, Trump could in theory accept that and say, okay, well, I can't do these tariffs. And then the price hikes would stop, the inflation would slow, like all of the negative downstream effects of the tariffs would cease. But it seems like he's not going to do that. Right? You're mentioning these other statutes that do allow him to impose tariffs. Quite clearly. You say they're narrower, they're, they're time limited, there's a cap on how high the tariffs can be. But you know, they're still there. Do you think that will be his plan B? Like the day after the Supreme Court rules, if it goes against him, does he issue a new spate of tariffs under these other statutes and then dare the courts to stop him?
- [59:59]
C
Once again, my hope would be Trump gets bored, he moves on to foreign policy in pursuit of that Nobel Prize, and he takes the off ramp. So what does the off ramp look like? The off ramp would be the courts say, you know, the IPA doesn't support the tariffs, you've got other tools. And we leave it to Congress to unscramble the egg, as it said with respect to section 301 and let's go and get this one right. And Trump then comes out and he says, okay, listen, I never meant to do it in the first place, or something kind of like that. He says, I needed a big stick. I knew I was out on a limb. The Supreme Court delivered what was exactly my expectation, and as a result, I'm gonna use these other statues. But look at all the good I did. I've got these trade deals with all these other countries. I've got billions of dollars of investment coming in, which, by the way, will raise the trade deficit. And isn't this wonderful? Am I saying he's going to do this? No. Is it in part what could be an off ramp? Maybe. But I want to also comment on the lead into your question. It's not just that voters don't like what they're seeing. It's that voters didn't vote for this in the first place. And to get a sense for that going into the election, I did this pretend little study using Google Trends, and I just mapped out when are Americans during the course of the election searching on the word tariff and what does it correlate with? And 90 days out from the election, the word tariff in Google only peaks twice. And the dates are really instructive. The first date is when all the think tanks in D.C. and Biden's council of Economic Advisors released their study. Their studies showing that it is impossible to use tariff revenue to sub in for income taxes. Now, let me be clear. There is no peak in searches on the word tariff when Trump makes that proposal. There's only a peak when there's the reality check on Trump's proposal. In other words, no one was excited about the word tariff when Trump said, I can replace. They were excited about the word tariff when the think tanks and the Council of Economic Advisors did the reality check. But if you drop searches emanating from Washington D.C. there's no one searching on the word tariff. The only other time that you get a peek in searches on the word tariffs right before the election is the day after Trump debates Harris. And that's because tariffs come up a lot in that debate. But if you run that search trend up against almost anything else, and I, for the fun of it, ran it up against Taylor Swift. There is no peak. You can't even see a little bit of a bounce. And my point being, Americans, for all that's said and done, did not vote for this. They don't think that terrorists are anything but what they are, a tax. And they don't want to pay a tax, least of all as a means of curbing inflation going forward. And no one seems to buy into this notion of the president's call for everyone to be patient until next year when all of a sudden all the jobs are going to be showing up again. If you again look at the economic data, it's not just that imports are down. You gotta understand, exports are down, too. We are handicapping our exporters by doing these tariffs. The China shock is over. We all have to get over it. The China shock is over. And it's time to really, truly properly diagnose what ails manufacturing. And here's the answer. Trump has a tech problem, not a trade problem. The problem is politically, you can't run against tech, but you can run against trade. American manufacturing productivity has never been greater than it is today. Trump politically has a tech problem, not a trade problem. And until we are able to address the underlying causes and the possible solutions, we're nowhere on this. Terrorists aren't the answer to anything, least of all raising revenue. And that's all they do.
- [64:33]
A
Mark, I feel like you have possibly just found the through line for this whole show and it's something like nobody wanted this, including the Supreme Court. Mark Bush is the Carl F. Landegger professor of International Diplomacy at the Edmund A. Walsh School of Foreign Service at Georgetown University. He's an expert on international trade policy and the law. Mark, thank you so very much for joining us. This material is dense. I know a lot of people who listen to hours on Wednesday of material that was very, very dense. And you've helped make it crystal clear and we thank you for it.
- [65:11]
C
Thanks so much for having me. Great time.
- [65:17]
A
And that is a wrap. Thank you so much for listening in. Thank you for your support for our work. Thank you so much for, for your letters and your questions and comments. Last week was a banner week for mail and we really did read all of it and we appreciate you. You can always keep in touch with us@amicuslate.com Sara Burningham is Amicus senior producer. Our producer is Patrick Fort, Hilary Frye is Slate's editor in chief, Susan Matthews is executive editor Mia Lobel is executive producer of Slate Podcasts and Ben Richmond is our senior director of operations. We'll be back with another episode of Amicus next week. Until then, hang on in there.
- [66:16]
E
It's okay not to be perfect with finances Experian is your big financial friend and here to help. Did you know you can get matched with credit cards on the app? Some cards are labeled no Ding Decline, which means if you're not approved, they won't hurt your credit scores. Download the Experian app for free today. Applying for no Ding Decline cards won't hurt your credit scores. If you aren't initially approved, initial approval will result in a hard inquiry which may impact your credit scores.
- [66:44]
C
Experian the holidays mean more travel, more shopping, more time online and more personal info in more places that could expose you more to identity theft. But LifeLock monitors millions of data points per second. If your identity is stolen, our US based restoration specialists will fix it, guaranteed your money back. Don't face drained accounts, fraudulent loans or financial losses alone. Get more holiday fun and less holiday worry with LifeLock. Save up to 40% your first year. Visit LifeLock.com podcast terms apply.