← Verdict with Ted Cruz
Verdict with Ted Cruz
Detailed Prediction: Trump's Tariffs before the Supreme Court-What's Going to Happen
00:35:58
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Podcast Host Intro/Outro
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Ben Ferguson
Welcome.
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It is verdict with Senator Ted Cruz. Ben Ferguson with you. Senator, it's nice to be with you. If you're watching this on video, I'm in Nash Vegas right now. Not Las Vegas, Nashville. You're in Washington D.C. and we've got a lot to talk about. It deals with the Supreme Court.
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Senator Ted Cruz
Well, that's right. We are expecting any day now the Supreme Court decision on President Trump's tariffs, his imposition of tariffs, they've been a major element of his foreign policy, a major element of his economic policy. We're going to do a deep dive breakdown of the Supreme Court case. What is likely to happen, what we know about, what was argued and, and what the outcome is likely to be. We're going to give you that. That as well.
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Ben Ferguson
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All right, so Senator, tariffs have been something that the president, like many other presidents, have used. The president used him in a very big way when he got reelected. And he made it clear when he was campaigning he was going to use tariffs for leverage. He was going to get better deals. He thought America was being taken advantage of. And, and he has been very successful in and many of these tariffs. But now tariffs have made its way to the Supreme Court. Explain, first of all, just to remind people, how did we get to where we are now? Who was challenging it and what are they actually looking at ruling on?
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Senator Ted Cruz
Well, the case is a case called Trump vs. Vos selections. It was argued on November 5th of 2025, and we're expecting a decision relatively soon. It could be this week, it could be in the next month, but it's expected to be soon. And it is a challenge from a number of small businesses who are challenging the imposition of tariffs that Trump has put in place. This is, I believe, going to be a close case. I'm going to break down the arguments. I'm going to give you the legal issues that are at issue, and then I'm going to make a prediction. I'm going to predict what the Supreme Court is going to do. But first of all, let's talk about where we are. So, to date, $133 billion had been collected during the Trump administration. This is through February of 2026. And the tariffs have been imposed using a statute called iaipa, which is the International Emergency Economic Powers Act. Now, what does IIPA say? IAEPA says that if the president declares a national emergency with respect to a foreign threat, the president, may, quote, regulate importation or exportation of any property in which a foreign country or a national thereof has any interest by any person. Central to this case is what that phrase regulate importation means. So the president has declared an emergency. There's no dispute about that. And AIPA says once he does so.
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Ben Ferguson
And by the way, that's his right. I want to be clear about that so people understand that's what liberals have said. No, no, he doesn't have a right to do it. The president has a right to do that.
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Correct.
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Senator Ted Cruz
So it's not an inherent constitutional right. It's not just like any president can stand up and say there's an emergency iaapa, which is a statute. Congress has Passed has given the President the authority to declare an emergency. And then it is given to him the power, once he declares an emergency, to regulate importation of any property from a foreign country. That is the entire basis of the trump tariffs that have been imposed. And the question is, does the power to regulate imports include the power to impose tariffs? Now, on the other side, uh, the constitutional Provision says Article 1, Section 8, Article 1. So the way the Constitution is structured, Article 1 lays out the powers of, of Congress. Article 2 lays out the powers of the President and the executive. And Article three lays out and creates the judiciary. Article one, Section eight enumerates the powers of Congress and, and in particular, it says, as relevant here, the Congress shall have the power to lay and collect taxes, duties, imposts and excises. And it also says later on in Article 1, Section 8, that Congress shall have the power, quote, to regulate commerce with foreign nations. And so tariffs are at the intersection of laying, collecting taxes, duties, imposts and excises, in other words, taxing and regulating commerce with foreign nations. Historically, tariffs have been a traditional tool for regulating imports and international trade. On the other hand, tariffs are literally taxes. They're duties. It's the oldest and most classic form of taxation. And so the dispute is whether Congress, when it used the language in ipa, which is a statute to giving the President the power to regulate imports, whether it clearly and constitutionally delegated tariff authority to the executive. And that raises yet another issue. One of the arguments the plaintiffs are raising here is something called the non delegation principle. The non delegation principle says it limits how much Congress can transfer its own lawmaking authority to the executive branch. Congress is a general matter. It can delegate the authority to implement and administer the law, but Congress has to make the key policy choices. And so that is a major argument the plaintiffs are using. A second major argument the plaintiffs are using is something called the major questions doctrine. And the major questions doctrine says it focuses on statutory clarity. And it says when the executive branch claims authority to take an action of vast economic or political significance, courts require a clear and specific authorization from Congress. And so one of the challenges the plaintiffs are making here is this does not meet the major questions doctrine. Those are the two central issues in this case.
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Ben Ferguson
When people hear this. And some of this seems like this is Donald Trump being harassed by the left and by Democrats, he's not getting to do his job. Is that an argument that for many Americans is legitimate, or is this a grand argument that, hey, we should have this out at the Supreme Court, or is he Just being harassed because he's Donald Trump and he won an election. Democrats don't like that he's in charge because the American people chose him.
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Senator Ted Cruz
Listen, there's no doubt that every decision President Trump is making, every policy he's putting in place, results in a lawsuit. And the Democrats, Democrats, state attorneys general, left wing interest groups are suing every step. And much of that is harassment. That being said, this legal issue is real. And I'm gonna make a prediction. My prediction right now is the US Supreme Court is going to uphold President Trump's imposition of tariffs. I'm going to further predict, really, that the Supreme Court is going to uphold it by a vote of 5 to 4, that it is going to be close. And I'm going to break it down in a moment. But what I will say, if this case had been decided a year ago, if it had been decided at the outset of the president's term, I think the court would have ruled that Trump cannot impose these tariffs if it were addressing the legal issue in the abstract. Here's why I believe the court is going to allow the tariffs to stay in place. And it's a basic principle of reliance. We've had $133 billion in tariffs imposed already and collected. It has been central to President Trump's foreign policy. And the court institutionally is very reluctant to do something that dramatically upsets the status quo. So a year ago, I think the court probably would have ruled differently. But I think today you're gonna get five justices to say, we're too far down the road, too much has been implemented, and this is too core to how this president is implementing foreign policy, because foreign policy under the Constitution is given principally to the president. And so that's my prediction, is 5, 4, the court is gonna uphold President Trump's tariff authority.
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Ben Ferguson
What does this also do for the future? And does this protect, in essence, the presidency? If it is a 5, 4 ruling that, look, we're gonna lose an election, again, I think based on history, where a Democrats in the White House. But what I don't wanna see is every time someone's there, we're playing these games like, I want the president if he's chosen by the people, and the majority of the people decide Bill Clinton's the president, United States of America, that he can do his job because that's who the people chose. I don't like presidents when they're being harassed while trying to do their job.
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Senator Ted Cruz
Look, for the foreseeable future, every president that comes into power, you're gonna have lawsuits challenging what they're doing. That's just the reality of a divided country. I will say this one thing where Donald Trump has genuinely changed my mind concerns tariffs and trade policy. Now, listen, I'm a free trader. I still believe in free trade. I think free trade is good for America. I think it generates jobs. I think it generates economic growth. But, and this is a big, big.
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Ben Ferguson
Let me ask you, for people listening, I want to be clear, explain free trade. And I do this because people hear words and they don't exactly know what it means. And I get messages afterwards going, I wish you guys would have explained free trade. So when you say you're a free trader, explain the definition of that quickly.
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Senator Ted Cruz
So, historically, there have been two broad economic views of trade, free traders and protectionists. Free traders believe that if you expand trade and commerce between the United States and other countries, that America benefits, that our farmers sell more goods, sell more crops, sell more livestock into foreign countries, that our manufacturers sell more products that are manufactured here, that our service providers sell more services, and that the aggregate economic impact is positive for the United States. Protectionists historically believed you enact really high tariffs on imports. You discourage imports. Now, by the way, when you do that, foreign countries enact really high tariffs on imports to their countries, and you end up principally selling goods into your own market. It would mean the United States produces goods, but mostly sells them to America and doesn't sell them to the world. I believe between the two, that free trade has produced far better economic growth. Now, I'm going to give you the caveat and where Trump has changed my mind. I think President Trump is frustrated that the threat of tariffs or the temporary imposition of tariffs is one of, if not the most potent diplomatic and negotiating tool the President has. And what we have seen is the President has used the threat of tariffs to incredible effect, and it has worked. So let's rewind to last year, April 2, President Trump announced a whole list of very high tariffs on the world. I got to say, 10 years ago, Ben, I would not have liked that. I would have been very unhappy with that. I would have said, look, this is going to hurt the people of America because tariffs are taxes, and they're taxes paid by consumers. Now, the way a tariff operates, and this gets down to economics, if you impose a tariff and the actual good is sold, some of that tariff is paid by the American consumers, and some of the cost of that tariff is paid by the foreign producer. And it depends on the particular market, how much is paid by the consumer. Versus the producer. I was not upset, though, at the April 2 tariffs and here's why. We've talked about this before on the podcast. There is a battle within the Trump administration. There are two camps. One camp is urging the President use the tariffs you've imposed, the tariffs you threatened as leverage.
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Ben Ferguson
Yep.
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Senator Ted Cruz
To get our foreign trading partners to lower their own tariffs, to open up their markets. A lot of foreign countries have what are called non tariff barriers. They make it very hard for American farmers and ranchers and manufacturers to sell their products into foreign countries. And one camp says use the tariffs. Trump is threatening to incentivize foreign countries to open up their markets. I am very much in that camp. Scott Besant, the Treasury Secretary, is very much in that camp. Elon Musk, when he was in the administration, was very much in that camp. There's a second camp, and that is a camp that believes tariffs are great, not as a means to an end, but as an end in and of itself, and wants to see very high tariffs in perpetuity forever. I think the leading person in the administration in that camp is Peter Navarro in the White House. I think that camp is mistaken. I think those policies are harmful. I think if we have a world where America has very high tariffs and all our trading partners have very high tariffs, I think that's going to hurt Texas farmers, Texas ranchers, manufacturers. I think that's a bad outcome. And I think President Trump in the Oval on almost a daily basis is, is listening to and deciding between a battle between the two camps, how that resolves matters. But my point, the President's threat of tariffs. Listen, Donald Trump is an unorthodox negotiator, to put it mild. His.
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Ben Ferguson
Yeah, that's, that's, I, that's a great way of putting it.
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Senator Ted Cruz
Look, the way, the way Trump negotiates, he walks up to you, he whacks you in the head with a two by four and then he says, let's talk. Yeah, I gotta say it is effective. And here's an amazing thing that I've seen and it's why Trump has changed my mind on tariffs I've seen over the last year and a couple of months, our trading partners rushing to America saying we want to slash our tariffs and open our markets to American goods in a way that I've never seen in my life. And what I've urged the President is take yes for an answer. You've threatened tariffs, they're lowering their tariffs. Negotiate a deal where everyone lowers their tariffs. That is a win win. And there is an Amazing irony. There's an amazing irony, Ben, in that I think there's a real possibility Donald J. Trump could go down in history as the greatest free trade president the world has ever seen. Now, that's astonishing because he has, historically, he's been a skeptic, a vocal skeptic of free trade. And yet by threatening tariffs, a huge part of his argument against what was considered free trade is he said, look, this is not free. This is not fair. We have no tariffs or very low tariffs on products coming into our market. And every other country has really high tariffs and hammer our manufacturers. That's not fair. He's right about that. And so what I've urged the President is take yes for an answer and focus on reciprocity. If they lower their tariffs, we lower ours. And I gotta say, I think Trump has shown that is an incredibly effective foreign policy and economic policy.
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Ben Ferguson
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That's compassion.com there's also an added benefit that we've seen, and there was a lot of people that were skeptical, that were nervous, and that is how much money we've collected through these tariffs. And that has been also, I think, one of those, like, X factors of this as well, because as the President was playing this high stakes game of chicken, in essence, and we keep winning.
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We were also collecting an awful lot of money. That was one of the upsides of this as well.
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Senator Ted Cruz
Unquestionably, $133 billion has come in already. And let's do a little bit of a breakdown of the oral argument. So at the oral argument, John Sauer, who is the US Solicitor General, he argued for the United States. Neal Catchall argued for the plaintiffs. The small Businesses. Now, I know Neil very well. Neil was Solicitor General under Obama. Neil clerked at the Supreme Court the same time I did. So when I was clerking for Chief Justice Rehnquist, Neil was clerking for Stephen Breyer. So we're friends. We've known each other a long time. In fact, in 2000, during the 2000 election between George W. Bush and Al Gore, I was part of the litigation team representing Bush and Bush versus Gore. Neil was part of the litigation team representing Al Gore. And we're buddies. We're friends. So we would call each other late at night and be like, what kind of ridiculous argument are you making? This is stupid. I can't believe you're saying this. And it's a little bit just friends giving each other a hard time. And we actually had a wager, Neil and I did, on the outcome. I said, look, Bush is going to prevail. We're going to win. He said, no, Gore is going to prevail. Well, obviously, I won that wager. And the wager was dinner. And so Neil had to take me out to dinner. But you're going to like this, Ben. Do you know what Neil did to sort of exact his revenge as he was paying off the wager?
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Ben Ferguson
I cannot wait to hear this.
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Senator Ted Cruz
He took me to a vegetarian restaurant.
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Ben Ferguson
Yeah.
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If you've ever had dinner with you, that's like taking me to a vegetarian restaurant. That's, like the worst decision ever. So did you. What did you even order?
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Senator Ted Cruz
I don't remember. I. Vegetables, because they didn't have any meat. I'm a carnivore. But I kind of laughed. I was like, all right, Neil, well played. Okay, so Neil is a very experienced, very capable Supreme Court lawyer. So is John Sauer. So you had two excellent advocates going at it. Let's take Chief Justice Roberts. Chief Justice Roberts repeatedly tried to reframe the case away from foreign affairs and towards taxation of Americans. So, for example, Chief Justice Roberts asked, he said, tariffs and dealings with foreign powers. Yes, but the vehicle is the imposition of taxes on Americans. And that has always been the core power of Congress. And John Sauer tried to press back on behalf of the Trump administration. And Roberts responded, well, who pays the tariff? If a tariff is imposed on automobiles, who pays them? And the answer, as I said before, is consumers pay some of them and the foreign producer pays some of them. Roberts went on, and he highlighted the structural collision between the executive foreign affairs power and. And Congress's taxing authority. Roberts said, quote, to have the President's foreign affairs Power trump that basic power of Congress seems to me at least to neutralize between the two powers, the executive power and the legislative power. And then he said, yes, of course, tariffs and dealings with foreign powers, but the vehicle is the imposition of taxes on Americans. Justice Kagan. So Justice Kagan is the smartest of the liberal justices on the court by far. I know Justice Kagan well. She was the dean of the Harvard Law School. She was the US Solicitor General also. And she's a very, very smart liberal lawyer and judge. What Justice Kagan tried to do is frame this all within the non delegation doctrine. So Justice Kagan said about the taxing power, she said, quote, but not with respect to tariffs, not with respect to quintessential taxing powers which are given by the Constitution to Congress. And she framed the case through the delegation doctrine, saying, quote, in consumers Research just last year, which is a case the Supreme Court just decided, we had a tax before us. If there's no ceiling on this tax, we sort of assumed if there was no ceiling, it would raise a delegation power problem. And then she applied that logic to ipa. She said, how does your argument fit with the idea that attacks with no ceiling attacks, that can be anything the President wants would raise a pretty deep delegation problem. And she rejected the government's argument to relabel tariffs. She said, no, not with respect to tariffs, not with respect to. To quintessential taxing powers. Now understand what Justice Kagan is doing. The non delegation doctrine is a very important constitutional limitation on Congress giving too much power to the executive. It is also something conservatives care a great deal about. I think Justice Kagan, Justice Kagan, the three liberals are gonna vote against Trump no matter what, in any circumstance. So Kagan is a no, but she's trying in a very savvy way to argue it in a way that will appeal to Justice Gorsuch, Chief Justice Roberts, or Justice Barrett. She's trying to frame it in terms of conservative principles. Now, Justice Gorsuch, if you look at his questions, his questions showed a significant degree of skepticism to the administration's position and in particular, focusing on the major questions doctrine. Again, the major's questions doctrine is a big conservative principle that limits the power of the executive branch. It's really important. So Gorsuch asked, what is the limiting principle here? And he asked further, if regulate importation includes tariffs, what stops the President from imposing them for any asserted foreign threat? He asked some hypotheticals. He said, could the President impose massive tariffs to address something like climate change? If that's deemed a foreign threat. It's actually a good question. And he pressed further. He said, once you accept that premise, it's hard to see what's left of the limitation. Justice Barrett, she went on to say, Congress knows how to grant tariff authority explicitly. Why isn't clearer language required if Congress meant to confer that power? And she pressed the US Solicitor General. She said, if regulate imports includes tariffs of any size, what work is left for the rest of the statute to do? Where do we find the limiting principle in the statute itself? So look, in terms of the questioning, Roberts appeared skeptical, Gorsuch appeared skeptical, and Barrett appeared skeptical. So on the conservative side, the justice that seemed most receptive was Brett Kavanaugh. And Brett Kavanaugh said the Court has historically been very comfortable with very broad delegations in the foreign affairs context. So he framed it in terms of, look, the President has enormous flexibility when it comes to foreign affairs. Justice Kavanaugh said in one of his opinions that the non delegation concerns have less force where Congress is empowering the President in foreign affairs. And Justice Kavanaugh focused on the historical practice, said there's a long tradition of broad delegations over foreign commerce going back to the founding. And he engaged the Solicitor General seriously. He said, that's consistent with cases like Chicago and Southern Airlines and Curtis Wright. I think Kavanaugh is going to be a likely vote to uphold the tariff authority. And so that argument was significant. Now, Justice Thomas, Justice Thomas historically asked very few questions that was true here, but his questions were focused on history and the original understanding of the Constitution. So Justice Thomas asked, historically, weren't tariffs one of the primary ways Congress regulated foreign commerce? And he went back to that. He said, at the founding, there was a sharp distinction, was there a sharp distinction between regulating imports and imposing duties on them? So he was very much focused on what the practice of the country has been from the founding. He also asked, if tariffs were understood as tools of trade regulation, why wouldn't the power to regulate foreign commerce include them? Very good question. And when it came to non delegate, the non delegation doctrine, he said the following, quote, non delegation is a modern doctrine. What evidence do we have that Congress historically could not confer this kind of authority in matters of foreign commerce? Justice Thomas question suggest he is very likely to vote in favor of the President's tariff authority. And then let's focus on Justice Alito. Justice Alito was really focused on workability, remedies and consequences. So he said he was asking about practicality. He said, if we accept your position, what happens to all the tariffs that have already been collected. He also highlighted, and I think this is critical, this may be the most important question asked. There are enormous reliance interest here, both for the government and for private actors who have ordered their affairs around these tariffs. And he questions the plaintiffs. He says, is your position that Congress always used the word tariff expressly, even in statutes dealing with foreign emergencies? That doesn't sound very plausible. And he pressed whether the case could be resolved narrowly. He said, why isn't this something that can be handled through a limiting construction rather than a broad holding that calls into question a lot of past practice? I actually think Justice Alito's questioning is going to frame what the Court does now. We have in a lot of big cases, a 6, 3 divide. You have the three liberals who vote against Trump on everything, and you have six justices that are on the conservative side of the aisle, although they vary. I'm going to predict we're going to lose one. I don't know which, but. But I think we will lose, in all likelihood, either Gorsuch or Barrett, even though Chief Justice Roberts was skeptical at oral argument. I'm going to predict that Chief Justice Roberts votes to uphold the tariffs, and I'm going to predict that he writes the majority opinion. And.
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Ben Ferguson
Wow. The reason these bold predictions, by the way, this makes it fun.
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Senator Ted Cruz
And look, I have no inside information. I could be totally wrong, but. But I do know the court quite well. I did spend my entire career before I was in the Senate was arguing before the Court. And look, Roberts in particular is an institutionalist. And I actually think this case is quite similar to the Obamacare case. The Obamacare case during the Obama presidency was a challenge to Obamacare. And ultimately, Chief Justice Roberts upheld Obamacare. And I think he did so because he thought to strike it down would be a massive change, would. Would wreak chaos, and it would question the legitimacy of the Court. It would question the authority of the court. So I think he made an institutionalist decision. Let's not disrupt the status quo. I think that same instinct here is going to lead him to say these tariffs have been imposed. They've been the heart of the President's foreign policy and economic policy. And so we're not going to set them aside. That is my prediction. And you will end up with a majority that consists of Chief Justice Roberts writing the majority opinion, Thomas and Alito and Kavanaugh, and either Barrett or Gorsuch. And the dissenters will be the three liberals and either Barrett or Gorsuch. That's my prediction. We'll see what happens.
- [32:46]
Ben Ferguson
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All right, final question for you, and that is the politics of this. If it comes out the way that you just predicted, how big of a victory is this specifically for Donald Trump and how important is it moving forward for the next three years of his presidency? And the second question is, how big of a defeat is this for the left, who immediately went after Donald Trump with the tariffs and said doom and gloom and said this was going to be overturned?
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Senator Ted Cruz
Look, if the Trump administration wins, it's a big deal. This is the central part of his foreign policy and trade policy, by the way, we've also talked about how he's used tariffs in other circumstances. For example, we've done a deep dive previously on using tariffs to force Mexico to, to provide water to South Texas. That's something I've urged him to do. He's threatened tariffs and Mexico. During the entire Biden administration, Mexico had been violating the 1944 Water Treaty with the United States, and it stolen over a million acre feet of water from South Texas. The Biden administration would do nothing to force Mexico to comply with the treaty. President Trump, at my urging, threatened tariffs against Mexico, and Mexico immediately complied. It was powerful and effective. It's a big part of the reason I changed my mind. I'm like, wow, we got Mexico to, to do something in our national interest just by threatening tariffs. Now, to be clear, if we imposed high tariffs in perpetuity against Mexico, I think that'd be really bad for America. It'd be terrible for Texas. Texas, our farmers, ranchers, manufacturers make enormous money trading with Mexico. So I don't want to see high trade barriers. But the threat of tariffs, right, got Mexico to provide the water they owed us under the treaty. Now if the decision goes the wrong way from the Trump administration, if they strike down the tariffs, it's not the end of the day because there are other avenues to impose tariffs. So there are three in particular. Number one, section 301 of the Trade act of 1974, which authorizes tariffs to enforce US rights under trade agreements or to counter unfair foreign practices. The second way that president could try to impose these tariffs again is under Section 232 of the Trade Expansion act of 1962, which allows tariffs on imports threatening national security, which was the vehicle Trump used for steel and aluminum tariffs. And the third is under Section 201 of the Trade act of 1974, which permits temporary, quote, safeguard tariffs to protect domestic industries from serious injury caused by import surges. So there are three other statutory bases that the president could go to and if, if the Supreme Court rules against him, I think the president will go to to use those. So you could end up at the same result. But at the end of the day, I'm going back to my prediction. Five, four, the Trump administration prevails.
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Ben Ferguson
Wow. It's going to be really fun to watch that. I love the prediction. We'll obviously let you know how the prediction works out and you're either going to look brilliant. I have no prediction here, so I'm just going to let this be either you're brilliant or I get to rag on you in the show after this. I'm excited about that. Rarely do you give me that chance, by the way. So for me, this is kind of fun. I'm not going to lie. I'm not going to lie. Don't forget, we do this show Monday, Wednesday, Friday. Hit that subscriber auto download button wherever you get your podcast. If you like to watch the podcast, you can do that on YouTube or Facebook and you can also hit that subscribe button on YouTube so that you don't miss an episode there as well. And the senator and I will see you back here on Friday morning.
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Podcast Host Intro/Outro
This is an iHeart podcast. Guaranteed Human.