Greg Sargent: This is The Daily Blast from The New Republic, produced and presented by the DSR network. I’m your host, Greg Sargent.
Ilya Somin: Thank you very much for having me.
Somin: To a large extent, though, I would note it’s not a complete repudiation of his underlying policy ideas given there’s still a 30-percent tariff on China, which is still much higher than before he started this trade war. So it’s in accordance with his philosophy that tariffs are somehow good for us—but in reality they cause enormous harm. So it would be better if he really did just repudiate that philosophy because it’s a bad one.
Somin: Sure. So I’m not familiar with all the details and negotiations with China, but as far as I understand it, essentially, he lowered the tariffs that he initially imposed against the Chinese—he had raised them to 145 percent, and now it’s back to 30 percent. But in exchange, all the Chinese did is gave up some of the retaliatory measures that they had against U.S. products in response to his measures. So he hasn’t actually gained anything that the United States didn’t already have before this trade war started.
Sargent: Which is why people are saying that there’s all this new uncertainty, which I think is a critical thing that’s missing from the discussion. All that’s happened here is that businesses don’t know how to plan.
Sargent: It seems to me that the massive abuse of power that you just mentioned that these tariffs represent gets far less attention than their impacts. To remind listeners, Trump has invoked an emergency authority to impose these tariffs and the emergency he has cited is our trade deficits, which are not an emergency in any sense. Ilya, can you tell us about the lawsuit?
An emergency is something like a sudden unexpected crisis. There’s nothing sudden unexpected or a crisis about trade deficits, which have existed for decades. They’re certainly not extraordinary or unusual, and, for that matter, they’re not a threat. Most economists will tell you the trade deficits are not actually harmful, particularly bilateral trade deficits with individual countries. I have a big trade deficit with my local supermarket. I buy a lot of stuff there and they virtually never buy anything from me, but nobody can reasonably say that’s an emergency or an extraordinary threat or anything like that.
Sargent: Ilya, I have a big trade deficit with my dentist. My dentist has been ripping me off really badly because I’ve been paying him to fill my cavities and do away with my horrific toothaches.
Sargent: It’s an emergency, yeah. So on Tuesday, your lawsuit was in court, and a panel of judges grilled the administration’s lawyer. I want to read a line from one of them to the lawyer, “We have a national shortage of peanut butter. Can the president declare an extraordinary emergency? What you’re saying is there’s no limit.” Ilya, that seems to me to be the essence of it. If Trump can define trade deficits as an emergency, what can he not define as an emergency?
Sargent: So, Ilya, where is this all going? Can you roadmap for us what it looks like if these tariffs are stopped in the courts? How does it unfold? What are we looking at going forward?
Sargent: So what are the prospects for success here? And let’s say it does go to the Supreme Court. What might they end up ruling? Are you confident, or is it touch and go?
Second, there is this doctrine, which has been developed more fully in recent years, called the major questions doctrine. [It] essentially says that if the executive claims that Congress has delegated to it some power of vast economic or political significance, then at the very least, the executive has to show that there is a clear delegation here. And here it’s anything but clear. It’s not at all clear that there is tariff authority in the statute at all. Even if there is tariff authority, it is, to put it mildly, not clear that this is the kind of emergency—an extraordinary, unusual threat—which is necessary to trigger the use of this statute. We actually think it’s clear that it’s not that kind of emergency, and the tariffs are not authorized, but at the very least these issues are unclear. And if something is unclear under the major questions doctrine, the Supreme Court says courts have to rule against the executive when they claim the power has been delegated to them.
Sargent: So, Ilya, what’s a plausible ruling from the Supreme Court that you can envision? What do they say?
But let’s say that the court concludes that the statute does clearly give the president this unreviewable power to impose whatever tariffs he wants, then that would be a violation of the Constitution under a principle known as the nondelegation doctrine, which says there must be at least some limits to Congress’s ability to give away its power to the executive branch. And if there’s ever any nondelegation limits on what Congress can do, they have to apply here because this is the most sweeping delegation of power claimed by the executive since at least the 1930s in the famous Schechter Poultry case, where the National Recovery Act gave FDR the power to set prices and regulations for every sector of the nonagricultural economy. The Supreme Court said that’s an excessive delegation, struck that down. That precedent is still on the books.
Lastly, there’s a technical legal doctrine called the constitutional avoidance doctrine, which says that if there is an interpretation of federal law that raises constitutional problems, then courts should do whatever they can to avoid adopting that interpretation. As long as there’s a reasonably possible alternative interpretation, they should pick that one. Here, if you want to avoid this enormous nondelegation issue that would be raised, all the courts have to do is agree with our interpretation on one of those previous four points and then they wouldn’t need to get to nondelegation. And the Supreme Court, including Chief Justice Roberts, has been pretty forceful in asserting this constitutional avoidance doctrine. You may remember that the Obamacare case in 2012 turned on that to a large extent.
Somin: Yes. Yes. Obviously, there then might be a separate set of issues of whether the remedy is a nationwide injunction or some more limited injunction. But it would be a ruling that says these tariffs are illegal and, as a practical matter, they would have to end either immediately, or there would have to be follow-up cases where people can get injunctions blocking the tariffs against their particular clients and the like.
Somin: I think the enterprise is a folly even aside from this, but as I said before, Trump has so far gotten nothing from the tariffs against China that he didn’t already have before. Moreover, there’s contradictory rationales here. On the one hand, they’re saying, Well, the point of these tariffs are to get these other countries to make concessions. On the other hand, they’re saying, These tariffs should be a permanent policy so as to protect American manufacturing from competition. And obviously, it has to be one or the other; it can’t be both. If the plan is to give up these tariffs as a bargaining chip, then they can’t be maintained as a way of protecting American domestic industry. If, on the other hand, the goal is to maintain them, then you can’t really successfully use them to gain concessions from these other countries. And I think the Chinese, and perhaps others as well, have seen the incoherence of this policy and therefore they hope to exploit that.
Somin: Sure. So you don’t want a situation where one man has completely unreviewable authority to start trade wars and impose tariffs whenever he wants. That’s a blatant violation of the separation of powers. It’s actually one of the things that the English Civil War was fought over. King Charles I tried to do things like this and impose taxes without the consent of parliament. That’s one of the things that led to that civil war. And one of the lessons that the founding fathers learned from that English experience is that the power to tax, including the power to impose taxes on imports, is something that should be with the legislature, not given to one man.
Sargent: Very nicely said. Ilya Somin, thanks so much for coming on with us. Great to talk to you.
Sargent: You’ve been listening to The Daily Blast with me, your host, Greg Sargent. The Daily Blast is a New Republic podcast and is produced by Riley Fessler and the DSR Network.
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