The Court of Appeals for the Federal Circuit was correct to rule against President Trump’s tariffs but not for the reasons you offer in “Trump Isn’t a Tariff King” (Review & Outlook, Sept. 2). A fair reading of the International Emergency Economic Powers Act would allow a president to impose a tariff on foreign imports. No one disputes that the statute allows him to block all U.S. trade with another country, such as North Korea, Cuba or Iran, or to impose sanctions on Russia for its war on Ukraine. The greater power includes the lesser power—if the president could cut off all imports from China because it poses a national-security threat, he can reduce the amount of imports by using taxes, licenses, quotas or other measures. While their forms may be different, they are all regulations in substance.
You write that the major-questions doctrine should prohibit such a generous reading of IEEPA. That doctrine, however, is merely a stand-in for the nondelegation doctrine, which prohibits Congress from transferring too much of its power to the executive. Yet in U.S. v. Curtiss-Wright (1936), the high court clearly said that the nondelegation doctrine doesn’t apply to foreign affairs, where the need for executive energy, speed and decision is at its height. Neither you nor the federal circuit addresses Dames & Moore v. Regan (1981), in which the court upheld an expansive reading of IEEPA to allow President Reagan to take the economic measures necessary to end the Iranian hostage crisis.
President Trump’s tariffs instead are vulnerable on the question the federal circuit evaded: whether the trade deficit qualifies as a national emergency. It is doubtful that it can. The trade deficit has existed for a half-century, and it is about the same share of gross domestic product today as it was in the mid-2000s. IEEPA is intended to enable sanctions against individual countries that pose a national-security threat—not a persistent, broad, social or economic dynamic. The trade deficit isn’t a sudden surprise, short in duration, and great in harm: the usual characteristics of an emergency.
The justices should reverse the federal circuit’s cramped reading of IEEPA—and may still strike down the tariffs for a lack of a true national emergency.
After the U.S. Court of Appeals for the Federal Circuit ruled against his tariffs last week, President Donald Trump repeatedly condemned the decision, which he preposterously warned will ruin the country unless it is overturned by the Supreme Court. “It would be a total disaster for the Country,” Trump wrote in a Truth Social post on Friday. “If allowed to stand, this Decision would literally destroy the United States of America.” He reiterated that claim on Sunday: “Our Country would be completely destroyed, and our military power would be instantly obliterated,” he said, adding that “we would become a Third World Nation, with no hope of GREATNESS again.”
Trump’s prophecies of doom were not the only implausible aspect of his comments. He described the appeals court as “Highly Partisan,” implying that its reasoning was driven by political affiliation, and said the majority was “a Radical Left group of judges,” implying that the result was dictated by ideology rather than a careful consideration of the facts and the law. Trump reflexively criticizes judges who rule against him in language like this, to the point that he has stripped ideological labels of all meaning. In this case, his complaints are especially hard to take seriously.
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Far from the invention of “Radical Left” judges, the major questions doctrine stems from a series of Supreme Court decisions spearheaded by conservative justices. The late Antonin Scalia, whom Trump has described as the very model of a “great” jurist, explained the rationale for the doctrine this way in the 2001 case Whitman v. American Trucking Associations: “Congress, we have held, does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide elephants in mouseholes.”
The White House celebrated Labor Day by announcing that President Donald Trump’s “protectionist trade policies have helped drive more than $8 trillion in new U.S. investment.” The accompanying photo refers to “$8 trillion in tariff revenue.” There’s a difference between $8 trillion in U.S. investment and $8 trillion in tariff revenue, but Trump’s trade policies have achieved neither.
The second claim is easier to refute. The Bipartisan Policy Center (BPC) calculatesthe gross tariff and excise tax revenue generated from January 1 to August 28 to be $158.8 billion, according to the Treasury Department’s Daily Treasury Statements. The customs and excise taxes collected from January 20, when Trump took office, to August 28 amount to about $156 billion.
According to the Treasury Department’s own data, the president’s policies have clearly not raised anywhere near $8 trillion; they’ve raised 2 percent of this figure. The Congressional Budget Office estimates that the tariffs Trump has implemented since January will generate an estimated $3.3 trillion over 10 years—significantly less than the $8 trillion that the White House is claiming the tariffs have already raised.
Gross tariff revenue isn’t even the most relevant statistic; net tariff revenue is. The BPC explains that the latter “removes ‘certain other excise tax revenue’ and accounts for refunds of tariffs,” i.e., the tariff revenue that stays in federal coffers. Although net tariff revenue is not available in the Daily Treasury Statements, the BPC was able to determine that net tariff revenue was $135.7 billion from January through July 31using the Treasury’s Monthly Treasury Statements, which account for tariff refunds. Net tariff revenue as a percentage of total imports jumped from about 2.4 percent in March to 5.73 percent in April, reflecting the impact of Liberation Day’s “reciprocal tariffs,” and climbed to 10.31 percent in June.
Still, the net tariff revenue of $135.7 billion amounts to 1.7 percent of the White House’s claimed $8 trillion in tariff revenue. (That’s neglecting the fact that the Joint Committee on Taxation estimates that “$1 of excise tax revenue will lead to a $0.25 decline in income and payroll tax revenue,” according to the BPC.)
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Later on Sunday, the White House said to “Trust in Trump,” sharing a screenshot of Trump’s Truth Social post where he refers to “all of the TRILLIONS OF DOLLARS we have already taken in” with tariffs. The data show that you should reject this fictitious figure, as well as his other claims that tariffs are good for the United States.
Maybe the best part of this crazy/absurd Trump post from Sunday is that the only nations that have tariffs as high as the US does today (~18.5% on average) are… low-income (“third world”) ones.
Tariffs are to economic growth what a bacon-cheeseburger is to weight loss. You can lose weight in spite of a mega-cheeseburger-a-day habit, but, realistically, you’ll never lose weight because of that habit. Equivalently, economies can experience economic growth in spite of tariffs, but they never experience growth because of tariffs. Various happy factors are currently boosting the U.S. economy sufficiently to overcome the damage done by President Trump’s shambolic tariffs. And lest I be accused of Trump Derangement Syndrome, I’ll offer that one can certainly argue that today’s robust growth is to some extent attributable to non-protectionist aspects of the Trump Administration’s economic policies.
Also correct is James Pethokoukis: “Prosperity is democracy’s best defense.”
