SCOTT SIMON, HOST:
Earlier this year, the U.S. Supreme Court struck down President Trump's sweeping global tariffs. The president criticized the ruling, but he complied with it, announcing a new set of 10% across-the-board tariffs under a different authority. But those tariffs are now being challenged in court. We're joined now by Ilya Somin. He's a professor of law at George Mason University and chair of constitutional studies at the Cato Institute, a libertarian think tank. He represented five small businesses in the case that ended up in the Supreme Court. And this week, he wrote a friend-of-the-court brief arguing this new set of tariffs should also be struck down. Professor, thanks so much for being with us.
ILYA SOMIN: Thank you for having me.
SIMON: What's the legal authority President Trump cites for this new round of tariffs?
SOMIN: He's citing Section 122 of the Trade Act of 1974, which allows imposition of up to 15% tariffs, but only in circumstances that almost certainly cannot exist right now, which is why Section 122 has never previously been used.
SIMON: And what was your problem - among several, I suppose - with the president's decision?
SOMIN: The big one is simply that what this statute does is it allows tariffs to try to address situations where, under the fixed exchange rate system, there might be a shortage of dollars because governments were trying to exchange dollars at a fixed rate. So there could be an excessive demand at that fixed rate. And similarly, until 1971, the U.S. was committed to exchanging gold for dollars at a rate of $35 an ounce. So you could have a shortage of gold reserves at Fort Knox and thus creating a balance of payments problem. But such things do not and cannot exist under the fixed exchange rate system that we have now.
Moreover, if you interpret the law the way the administration does, where they basically say the president has discretion to claim that there is a balance of payments problem pretty much anytime he wants, then he would have nearly unlimited power to impose up to 15% tariffs, which is enormously high rate, against any nation, any goods at any time. And that would be a huge usurpation of congressional authority that would be unconstitutional because the Constitution says only Congress has the power to impose tariffs.
And it would violate what the Supreme Court calls the major questions doctrine, which says that when the executive claims that there is some major power over a large economic or social issue that has been delegated to it, at the very least, they have to show that Congress has clearly stated that the executive does have that power. And here, at the very least, it's unclear, and that goes against the major questions doctrine.
SIMON: At the heart of your argument seems to be that it's Congress that ultimately has the power of the tariff. Would that be fair?
SOMIN: Yes. So the power to impose tariffs, referred to as duties and imposts in the Constitution, is listed in Article 1 of the Constitution. Among Congress' powers, the president has no independent power in this area of his own. He only has such authority as Congress has given him. And here, they have not given him the kind of vast, sweeping authority he's claiming.
SIMON: Professor Somin, how would you react to what I gather seems to be the argument of some of the president's supporters, that in an economy of the kind we have these days, the president - an executive authority - needs the latitude to be able to compete with countries to kind of level the playing field and impose tariffs that get countries to respond and lower tariffs on U.S. goods, or else the economy is left behind?
SOMIN: I would say two things. First, the tariffs he's imposing now and also those struck down by the Supreme Court bear absolutely no relationship to any tariffs our trading partners are imposing on us. They're much higher than any tariffs those trading partners impose and indeed have been imposed even on those that impose no tariffs at all on U.S. goods, countries like Switzerland and Israel.
Second, if the president does need some kind of authority, then he can go to Congress to get it. But Congress can't simply give him a complete blank check because it can't give the executive the power to impose massive new taxes on Americans. In general, economics 101, supported by economists across the political spectrum, says we're vastly better off under free trade than we are under the government trying to pick winners and losers and imposing tariffs whenever they want. And it's especially bad if the president has the kind of virtually unlimited discretion to impose or lift tariffs whenever he feels like it, which is what this administration is claiming, because that destroys the stable business environment that investors, consumers and businesses need.
SIMON: Do you think these tariffs are headed to the Supreme Court, too?
SOMIN: I don't know. I think certainly whoever loses in the court of international trade, there's a good chance that they will appeal to the next level, which is the Federal Circuit. Whether it'll eventually get to the Supreme Court, as the previous case did, you know, it's hard for me to say.
SIMON: Ilya Somin is a professor of law at George Mason University. Thank you so much for being with us.
SOMIN: Thank you so much for having me. Transcript provided by NPR, Copyright NPR.
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