Two other points bear mentioning. First, even if the commitments made under these deals had begun to materialize, there is no reason to believe that these would represent US government liabilities. No public debt is created when foreigners invest in the United States or buy American products.
Second, previous statements by administration officials contradict its newfound alarmism about debt being created by foreign financial commitments. Again, from the amicus brief:
Finally, the administration’s own characterization of these commitments undermines the suggestion of debt. President Trump, for example, described the EU’s supposed $600 billion investment commitment as a “gift.” With gifts, of course, “there’s nothing to pay back.” Similarly, President Trump has likened Japan’s $550 billion commitment to a “signing bonus,” a term not typically understood to create debt.
The White House’s warning of a trillion-dollar crisis is a rhetorical Hail Mary that reflects the poor legal and economic footing of the IEEPA tariff program more broadly. If the best defense of unilateral tariff authority is an invented national debt, it’s no wonder lower courts have ruled against the administration—and that the Supreme Court has taken the case. Fearmongering about imaginary obligations does nothing to justify a legally dubious expansion of executive power.
Damon Root reports that “the legal challengers to Trump’s tariffs had a good day in court.” A slice:
A few minutes later, Gorsuch pressed [Solictor General John] Sauer on the inevitable implications of Trump’s claim that Congress had actually delegated such unbridled tariff authority to the executive. “Don’t we have a serious retrieval problem here,” Gorsuch asked, “because, once Congress delegates by a bare majority and the President signs it—and, of course, every president will sign a law that gives him more authority—Congress can’t take that back without a super majority. And even—you know, even then, it’s going to be veto-proof. What president’s ever going to give that power back? A pretty rare president.”
In short, Gorsuch stated, “Congress, as a practical matter, can’t get this power back once it’s handed it over to the President. It’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.”
Those words must have set off major alarm bells for Sauer because Gorsuch basically argued that the logic of Trump’s position was totally poisonous to the constitutional separation of powers. The phrase “no kings” comes to mind.
The Constitution explicitly gives Congress control over the country’s tariffs and trade. The Trump administration’s position is that Congress forfeited its control in 1977 when it passed the International Emergency Economic Powers Act. The law doesn’t mention tariffs or trade but lets the president “regulate” economic transactions with foreign parties in emergencies. Voilà, the administration says: Trump can rewrite Congress’s border tax rates and impose worldwide tariffs that will supposedly cut the deficit by $4 trillion.
Gorsuch sounded skeptical that Congress had authorized such a thing. Indeed, he sounded skeptical that Congress could authorize such a thing. Let’s say, the justice proposed, that “Congress decides tomorrow, well, we’re tired of this legislating business. We’re just going to hand it all off to the president. What would stop Congress from doing that?” he asked Sauer. The solicitor general was forced to admit that there are limits to how much power Congress can delegate to the president, even in foreign affairs.
Protecting the separation of powers — that is, making sure that the legislative branch legislates and the executive branch executes — has long been a conservative project. It’s been a particular preoccupation of Gorsuch, who in 2019 argued that the court should significantly pare back Congress’s ability to delegate lawmaking power to the executive. Liberal justices are usually more lax about delegation, believing that Congress can point to general priorities and “experts” in the executive branch can fill in the details.
National Review‘s Editors reflect on “Trump’s taxing Supreme Court argument.” A slice:
The Court should rule that the congressional power to tax — the very core of the Article I power of the legislature — cannot be delegated without clear and unambiguous statutory language and identifiable limiting principles.
IEEPA has nothing of the sort. It never mentions tariffs, taxes, or any synonym for them. No prior president has argued that IEEPA authorizes tariffs. The most that IEEPA says is that the president may “regulate” the “importation or exportation” of foreign goods during a non-wartime emergency. Broader powers are granted during wartime, when presidents may have more sweeping Article II authority of their own, but Sauer rightly conceded that the administration does not claim that presidents have any inherent authority to impose tariffs in peacetime. What they have must come from a statute.
Pierre Lemieux distinguishes two different conceptions of trade.
An optimist might imagine that protectionists are on the cusp of finally realizing that their policies are never actually “good for Americans.” Instead, protectionist policies chaotically favor some Americans at the expense of other Americans, wreaking havoc all the while. But since I’m not optimistic about protectionists’ epiphanies, my imagination went in a more Swiftian direction.
Right now, foreigners hold about 23% of U.S. federal debt. If a 15% quota for foreign student admissions makes sense, why not a 15% quota for federal debt ownership, too? In short, why not MAGAfy the national debt? If we can say “Universities that rely on foreign students to fund their institutions risk, among other things, potentially reducing spots available to deserving American students,” why not add “Governments that rely on foreign creditors to fund their institutions risk, among other things, potentially reducing debt available to deserving American investors”?
George Will applauds Bill Gates’s retreat from climate hysteria. A slice:
It is, however, neither prudent nor decent to sacrifice the vulnerable on altars erected by the comfortable. Gates cites (without naming) a low-income country whose government, clambering aboard the cut-emissions bandwagon driven by developed nations, banned synthetic fertilizers. Gates: “Farmers’ yields plummeted, there was much less food available, and prices skyrocketed.” Progress in every sphere depends on improved health and steady economic growth. Every society that produces social surpluses for investments is dependent on fossil fuels, for which there is no near-term substitute.
Because Gates participated prominently in the overwrought reaction to the fact that humanity has an impact on its habitat, his reconsideration is especially admirable. “A foolish consistency is the hobgoblin of little minds,” said Ralph Waldo Emerson. Gates’s big mind accommodates discomfiting evidence.
