A (3:20)

And remind us, Adam, what was the emergency that the president was claiming to justify these tariffs?

B (3:25)

The president identified two emergencies. One, he says fentanyl is entering the country and he needs to take action against Mexico, Canada and China and the other. He says it's an emergency, that we've had persistent trade deficits and, and that requires tariffs against almost the entire globe. But a bunch of small businesses affected by the tariffs and several states took a different view and said that the statute, he invoked, this IEEPA statute, did not authorize the tariffs that he wants to impose. And they sued and the cases they filed went to the Supreme Court.

A (4:13)

So let's talk about the arguments today. I listened to them also, and they were pretty expansive. They stretched for almost three hours. And a lot of time was spent really digging into the statute that you mentioned, ieepa. So where do you think we should begin?

B (4:29)

Yeah, so I think it probably makes sense to spend a minute with the statute because it does say that if there is a national emergency of the kind we were talking about, Rachel, the President may persuade scribe by means of instructions, licenses or otherwise. And then it says a bunch of things he can do. Like there's 15 verbs he can investigate, he can block, he can regulate, he can nullify, he can void, he can prohibit the importation or exportation of various goods. But it doesn't include the word tariff or any similar word, duty, tax, impost. And it's an open question whether it authorizes the President to impose any tariffs, much less the expansive, aggressive ones that he instituted at the beginning of his second term. We will hear argument this morning in case 2412 87, learning resources versus Trump. So when the court heard arguments. Mr. Chief justice, and may it please the court, the administration's lawyer focused on two key words. The phrase regulate importation plainly embraces tariffs, which are among the most traditional and direct methods of regulating importation. This enormous string of verbs. He says what's important here is the President can regulate importation. The power to impose tariffs is a core application of the power to regulate foreign commerce, which is what the phrase regulate importation in IPA naturally evokes. And that's a central question for the Justices. Do you get from regulation of importation to tariffs?

A (6:12)

Because the idea here being the statute doesn't actually include explicit instructions that the President can tax or tariff. So the government is making the argument that regulate includes the ability to tax and tariff.

B (6:26)

Right. And Mr. Katio. Thank you, Mr. Chief justice, and may it please the court. The challengers say 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. Hey, if that's true, it would give the President enormous power if you read regulate to include the power to tax. It's simply implausible that in enacting iaapa, Congress handed the President the power to overhaul the entire tariff system and the American economy in the process allowing him to that there are any number of ways in which the statute actually at issue in the case does not confer the power to impose tariffs. It's just not there, he says.

A (7:13)

So, Adam, talk a little bit about how the justices drilled down into what the statute said.

B (7:18)

So it has a lot of verbs, it has a lot of actions that can be taken under this statute. It just doesn't have the one you want. So part of the argument turns into a kind of grammar seminar license as used in aipa. It's not used as a verb, it's used as a noun. Really trying to understand not so much what the purpose of the statute was, but just what the words mean. Justice Ketanji Brown Jackson, for instance, said other places where Congress wants that particular form of regulation to be used, they say impose duties. They say you can tax Mr. President here. They don't say that, that Congress knows how to authorize tariffs. Congress does that all the time. And you look at all the tariff statutes that Congress has passed. I mean, they use language about revenue raising tariffs and duties and taxes. All the language that does not appear in the statute you rely on. Several justices make the point that the absence of the word tariffs or synonyms, duties, taxes, imposts is significant.

A (8:31)

Right. It almost felt like the liberal justices were trying to speak the languages that we often hear from conservative justices, which is to stick to an extremely literal interpretation of the text.

B (8:43)

So it's true that the liberals were quite happy to be textualists and literalists, and the conservatives kind of faced a choice if they followed that road. That's a road that's quite rocky for the administration. But it's quite hard for them to run away from that methodology because there's really broad agreement among the conservatives that textualism, the words of the statute are what count. And we're not going to try to look at what the consequences of a decision are. We're just going to look at the words. Can I just ask you a question? For instance, Justice Amy Coney Barrett, who's a key vote in this case, asks the government's lawyer, can you point to any other place in the code or.

A (9:29)

Any other time in history where that phrase together regulate, importation has been used.

B (9:33)

To confer tariff imposing authority? It will. Can you give me any other example ever in the history of the nation where the power to impose tariffs has been conferred by a statute that doesn't even mention tariffs. And he bobs and weaves. And I think our argument goes a bit further than that as an interpretive matter, because if you look at that history, the history of delegates. Could you just answer the Justice's question? A liberal Justice, Sonia Sotomayor, knows that this is a good thing, that she should jump up and support. Justice Barrett says, just answer the question, and Barrett returns to it. So they really care about what the words of the statute say.

A (10:16)

Even for the Supreme Court, this seemed like an unbelievably close parsing of specific words.

B (10:22)

This is not unusual for the Court in a minor case. This is exactly what they do. They roll up their sleeves and they try to understand what the statute actually conveys, what the words actually mean. It's pretty unusual, though, Rachel, you're right about this for a blockbuster case to seem to turn on this kind of close reading.

A (10:42)

So why do you think that happened in this case?

B (10:44)

Most of the time, the really big Supreme Court cases involve the Constitution, which is written in general terms and which is the subject of endless precedents. And they're working in a different kind of mode there. When they're working on a statutory case, one that simply asks, do the words of the statute authorize a given action? They're much more likely to take this kind of close reading approach. So this is a real forensic exercise. It's not freedom of speech, it's not equal protection. It's like, what did Congress in 1977 do?

A (11:24)

So obviously, the Justices spent a lot of time parsing the meaning of a few specific words. But one thing that they didn't spend a lot of time parsing, which I thought was kind of interesting, was whether or not the fentanyl crisis and the trade deficits actually constituted an emergency. Did that strike you as interesting also?

B (11:43)

Yeah, I was surprised by that. I do think that there's a tendency to defer to the President's judgments about the state of the world, that he's better situated than nine people in robes to figure out what is an emergency or not. They also didn't much deal with another textual concept, because whatever he's authorized to do, it has to deal with the emergency. And you know, Rachel, it's really not clear that tariffs on Canada deals with the fentanyl crisis. It's also not clear that what can look like capricious and mercurial impositions of tariffs and then unimposing them the next day deal with trade surpluses. So the court kind of gave that, spotted that to the president and focused on the question of did this statute authorize tariffs? Did it give him this tool? But all of this was only one part of the argument. The justices also thought that some really significant hurdles stood in the way of President Trump. And some of the justices on the right side of the court were quite skeptical that the president could overcome those hurdles.

A (13:11)

We'll be right back.

B (13:14)

I'm Jonathan Swan. I'm a White House reporter for the New York Times. I have a pretty unsentimental view of what we do. Our job as reporters is to dig out information that powerful people don't want published to take you into rooms that you would not otherwise have access to, to understand how some of the big decisions shaping our country are being made, and then painstakingly to go back and check with sources, check with public documents, make sure the information is correct. This is not something you can outsour to AI. There's no robot that can go and talk to someone who was in the Situation Room and find out what was really said in order to get actually original information that's not public, that requires human sources. We actually need journalists to do that. So as you may have gathered from this long riff, I'm asking you to consider subscribing to the New York Times. Independent journalism is important, and without you, we simply can't do it.

A (14:10)

So, Adam, before the break, you told us that some of the justices were quite skeptical that the administration would be able to overcome some other major hurdles in order to keep their tariff authority. Walk us through what those hurdles are.

B (14:23)

So the most significant one, and you're right to call it major, is the major questions doctrine, which is a kind of principle of statutory interpretation. It has been around for a couple of decades, although it's really quite recent, that the Court has started to refer to it by name. And what it says is that if the executive branch wants to do something really big, Congress has to authorize that really big move in plain, direct language. So we were talking in the first half, Rachel, about whether you could tease out of the words regulate, importation, authorization of tariffs. Even if you could, there's this separate hurdle that says if we're talking about things of vast economic consequence, the major questions doctrine kicks in, and you're required to. The executive branch is required to show that Congress really meant it, that it wasn't a kind of inference from words in the statute that were 20 words apart. Justice Scalia used to say Congress doesn't hide elephants in Mouse holes. It needs to say so directly.

A (15:54)

In other words, even if the Justices rule that the word regulate includes tariff authority, there's this whole separate question of did Congress actually tell the President that he could use this power?

B (16:05)

Right. I mean, if we were talking about a tariff for $20,000 about some perfectly routine thing, that's one thing. But the major questions doctrine says if it involves vast economic consequences, this different rule is triggered. And there's really no question but that these tariffs could hardly be bigger economically. Now, the Supreme Court used the major questions doctrine repeatedly to reject Biden administration initiatives on Covid, on student loans, and on climate change. When the Court rejected the Biden administration student loan plan, they said, this is $400 billion. That's a staggering sum of money. Well, the sums of money involved here, according to the administration, will easily go into the trillions. And that sure would seem to suggest that the major questions doctrine plays a role here. Counsel, 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's so Chief Justice Roberts invokes the major questions doctrine directly. Early in the argument, 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. And he asked the government's lawyer how it can be that a statute that doesn't name tariffs, that's never been used in its 50 year history to justify tariffs, and that's being used for power to impose tariffs on any product from any country for any length of time, satisfies the major questions. Dr. 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 major authority and the basis for the claim seems to be a misfit. So why doesn't it apply again?

A (18:27)

And what does the government's lawyer say to that kind of questioning?

B (18:30)

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 this, the government's lawyer says first, and not entirely persuasively, that AIPA is the kind of plain, direct language that you need to satisfy the major questions doctrine. But his backup argument is his better one, probably. He says, as to that point, I believe the Court has never applied the major questions doctrine in the foreign policy. The Court has never applied The Major Questions doctrine in the foreign policy context.

A (19:08)

Why would it be the case that foreign affairs would be exempt from the Major questions doctrine?

B (19:12)

The idea would be that domestic taxation is for Congress. And if Congress wants to delegate some of its authority, perhaps it can. But the President takes the leading role in diplomacy and as commander in chief in looking after national security. So the theory is that the Constitution gives Congress power in one setting and gives the President substantial power in the other setting.

A (19:40)

And so I guess in this case, the question then becomes, do tariffs actually count as foreign policy? Right.

B (19:46)

Yeah, that's the question. We have never applied it to foreign affairs. But this is a tariff. This is a tax. It is a. It is a. Justice Sotomayor says it, it's true, we've never applied it to foreign affairs. But this is not foreign. This is a tariff. This is a tax. I just don't understand this argument. It's not an article. It's a congressional power, not a presidential power to tax. And you want to say tariffs are not taxes, but that's exactly what they are. The Solicitor General arguing for the administration says, no, it is a, it is a. If I may, it's a foreign facing regulation of foreign commerce. That's everything.

A (20:28)

So, Biden, this does seem to raise a genuinely interesting question, which is whether tariffs are domestic policy or foreign policy.

B (20:36)

Right.

A (20:36)

Like, is it kind of hard to disentangle a distinction between the two?

B (20:41)

Yeah, it sure seems to be some of each. These are domestic businesses paying domestic taxes largely in aid of trying to bring manufacturing back to the U.S. but of course, they're also part of the President's diplomatic negotiations to try to address a drug crisis and a foreign balance of trade. So it's some of each. Right. And this distinction came up throughout the argument if one of our major trading partners, for example, China, held a U.S. citizen hostage. You had Justice Clarence Thomas asking a hypothetical question. What if China held a US Citizen hostage? Could the president, short of embargoing or setting quotas, say the most effective way to gain leverage is to impose a tariff for the purpose of leveraging his position to recover our hostage? And I think he meant for that to suggest that the President should have available to him all kinds of tools to execute important national security measures and protect American citizens?

A (22:04)

It seems worth noting, though, the tariffs does not really seem like something you would deploy to rescue a hostage. But go on.

B (22:10)

I had the same idea, Rachel. Everyone wants the hostage out, but I think there are things much more immediate than tariffs, which the President could use to achieve foreign policy. Goals. But be that as it may, the question from Justice Thomas did indicate that at least some justices thought that it was important to empower the President to be assertive and nimble in protecting the nation's interests. Justice Gorsuch General, just a few questions following up on the major questions discussions you've had. And then Justice Gorsuch in an extended series of questions and one in which he became quite forceful. So could Congress delegate to the President the power to regulate commerce with foreign nations as he sees fit, to lay and collect duties as he sees fit? We don't assert that here. That would be a much harder case now in 1790. Isn't that the logic of your. Of your. I don't think so because we're doing indicated deep skepticism that Congress can simply hand over to the President important legislative powers. If that's true, what would. What would prohibit Congress from just abdicating all responsibility to regulate foreign commerce for that matter, declare war to the President? Gorsuch says what if Congress decides tomorrow we're tired of this legislating business. We're just going to hand it all off to the President. We'll let him declare war. We'll let him impose taxes. That's what I'm struggling and waiting for. What's the reason to accept the notion that Congress can hand off the power to declare war to the President? Well, we don't contend that. Again, that would. Well you do. You say it's unreviewable. That is unacceptable. Justice Gorsuch said. So now you're admitting that there is some non delegation principle at play here and therefore there's a legal concept called the non delegation doctrine which forbids the legislature from handing over unlimited legislative power to the President at least without very detailed guidance.

A (24:12)

He's basically saying this is a slippery slope, right?

B (24:16)

He's absolutely saying that. And you emphasize that Congress can always take back its powers. You mentioned that a couple of times. But don't we have a serious retrieval problem here? Because he went on to say that there's a problem with that kind of turning over of legislative authority to the executive branch, which is Congress can never get it back. As a practical matter, that's the political process working. There was a it takes a super majority against veto proof majority to get it back because you'd need new legislation that could overcome a presidential veto and no president is going to give back such power once he or she has achieved it over. The president's a one way ratchet toward the gradual but continual accretion of power in the executive branch and away from the people's elected representatives. I disagree with that. And it seems to fit with the very broad conception the Trump administration has of the power it claims Congress has ceded to. It would raise the same issues. Okay, thank you, General.

A (25:20)

You know, it feels worth pointing out that this conversation we're having about handing the executive branch power and whether this is a slippery slope is not happening in a vacuum. It's happening at a time when the country is in the middle of a. Of a conversation basically, about whether President Trump is seizing too much power in the executive branch in. In all different arenas. And so I just wonder if you feel like this particular discussion is loaded or what kind of broader context you, Adam, are applying to it.

B (25:52)

I think those comments really did address the current situation where we're seeing a president who's trying to accrue maximal power. And the justices live in the world. They're aware of that. And Justice Gorsuch's comments really moved the discussion from the parsing of the statute and how to interpret the statute and whether the major questions doctrine, which is a doctrine of statutory interpretation, applied or not, to a constitutional question of the proper relationship between the two elected branches and whether the Court should tolerate either the President claiming or even Congress agreeing to give the President power that ought to be reserved to Congress. And for all those reasons, we asked the Court to reverse both the decisions below. Thank you, counsel. The case is submitted. And I guess I'd say that if the administration has lost Neil Gorsuch, it may well have lost the case that you've heard. Skeptical questions for sure from the Chief Justice, Justice Barrett, Justice Gorsuch. The three liberal justices are sure to be voting against the administration. And this case is complicated, has a lot of moving pieces, is a rare jump ball in an era where the Court usually is quite predictable. Nonetheless, on the evidence of the oral argument, these tariffs, at least, may well not survive.

A (27:30)

And when can we expect a decision in this case?

B (27:33)

The Court has put this on a fast track. The administration has asked for really quick treatment. They think even having this case pending makes it harder for them to negotiate with their foreign counterparts. So, unlike most big cases, which don't come till June, whenever they're argued, I think it's quite possible this case emerges in a month, six weeks, quite fast by Supreme Court standards.

A (27:58)

As we said in the beginning of the conversation, President Trump's tariffs are kind of a. The signature of a second administration. And so if the court did not rule in his favor, that feels like a hugely significant blow to his policy agenda. And the timing of these oral arguments can't help but feel a bit notable given that they came one day after the Democrats had blowouts up and down the ballots in all these different states. And also, this is all coming in the midst of a record breaking government shutdown. And so taken together, this week feels a little bit like a referendum on the president's agenda in some way. I mean, I know that these are disconnected, but that's a bit how it feels.

B (28:42)

This week at the Supreme Court, it did feel like a shift, an inflection point. And so it's notable. Two things are notable. One, that Trump would take this as a real blow. He has said that a ruling against him would be a cataclysm. It would destroy the nation. He has used the most apocalyptic terms to describe what such a ruling would be like, even to the point that some people thought he was trying to intimidate the court. But two, and building off of that, if this court, which has in recent months greenlit lots of Trump programs on an emergency basis, provisionally, temporarily, but nonetheless all sorts of programs, if it stands up to President Trump now, that will be a much more assertive image for the Supreme Court and the beginning of probably a real clash between the president and the court. So we may be seeing really for the first time in the second term, the Supreme Court saying, hey, we're a branch of the government, too, and we have a role to play. And we are not going to accept in every setting the efforts of a president who seems committed to accruing as much power as he possibly can at the expense of the other branches.

A (30:19)

Adam, thank you so much.

B (30:20)

Thank you, Rachel.

A (30:36)

We'll be right back.

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A (31:14)

Here'S what else you need to know today. The Trump administration announced on Wednesday that it would cut 10% of air traffic in 40 of the nation's busiest markets in a move that analysts said would force airlines to cancel thousands of flights. While the administration tries to force Democrats to end the government shutdown, Transportation Secretary Sean Duffy said the cancellations were an attempt to, quote, alleviate the pressure on air traffic controllers. They've not been paid since mid October. Duffy said that the affected markets would be announced on Thursday and the cuts would go into effect on Friday. Today's episode was produced by Rob Zipko, Eric Krupke and Nina Feldman. It was edited by by Devin Taylor with help from Lisa Chow, contains music by Marian Lozano and Dan Powell and was engineered by Alyssa Moxley. That's it for the Daily I'm Rachel Abrams. See you tomorrow. We all have moments when we could have done better. Like cutting your own hair.

B (32:35)

Yikes.

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