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My intrepid Mercatus Center colleague, Veronique de Rugy, decries the overuse of “emergency” declarations. A slice:

In Washington today, the word “emergency” is a magic key; it unlocks powers Congress never granted, suspends the discipline of regular order and decorates bloated bills with provisions too dubious to pass on their own. What was once meant to be a narrow exception for genuine crises has become a routine pretext for government overreach—a means of inflating executive power and corroding the nation’s fiscal credibility.

Start with the most brazen claim, and one soon to be scrutinized by the Supreme Court: that a president may impose sweeping tariffs under the International Emergency Economic Powers Act (IEEPA) merely by declaring that a half-century of trade deficits constitutes an emergency.

Tariffs are taxes paid by Americans, and the Constitution assigns the power to tax to Congress. Yet the Trump administration argues that the president’s tariff power is beyond reproach because only he is the designator of emergencies.

The Washington Post‘s George Will summarized the stakes crisply: a statute being read as a roving license to restructure the economy and give the president “unreviewable power to impose taxes … of whatever amount, and for as long as he chooses.” Amicus briefs from across the political spectrum press the simple point that the IEEPA doesn’t authorize this, and an emergency cannot be a long-running condition that has coincided with rising American prosperity.

Derek Scissors wisely warn that emergency powers be kept in tight check. A slice:

Conservatives can well see how bad the consequences are when government overreach is not reined in, when emergencies are allowed to last as long as a President says.

Let’s hope that the Editorial Board of the Wall Street Journal is correct that “Trump’s tariffs may not please the Court.” A slice:

“Could the President impose a 50-percent tariff on gas-powered cars and auto parts to deal with the unusual and extraordinary threat from abroad of climate change?” Justice Neil Gorsuch asked. “It’s very likely that that could be done, very likely,” Mr. [Solicitor General John] Sauer replied.

There you have it: The Trump team believes courts couldn’t stop a future Democratic President from invoking a climate emergency to impose tariffs or do virtually anything else.

Some of the conservative Justices may be reluctant to defy Mr. Trump on his beloved tariffs, but Mr. Sauer’s answer makes clear this case isn’t about one President. It’s a case for the ages. It’s also about the credibility of this Court’s conservative majority, and the consistency of its rulings on major questions, fealty to statutory language, and whether a President can claim the taxing power as his own. A 9-0 ruling would be right on the law and enhance the luster of the Court.

Also hoping that the U.S. Supreme Court rules against Trump’s abuse of executive power to impose tariffs punitive taxes on Americans’ purchases of imports is the Editorial Board of the Washington Post. Two slices:

During oral arguments before the Supreme Court on Wednesday, Solicitor General D. John Sauer asked the justices to believe things that just aren’t so. He insisted again and again that the government, in imposing tariffs under International Economic Emergency Powers Act, is not asserting a power to tax.

But no such distinction exists between taxes and tariffs. They are taxes on imported goods. Fortunately, most of the justices seem to agree.

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One can agree or disagree on whether the tariffs are a good idea while still acknowledging that they are taxes, and that the administration is using them for fiscal policy purposes. So long as they are, the Constitution is clear on where the power lies to impose them: Article I, the legislative branch.

The Founders intended this. They believed taxation is one of the most coercive powers of government, and that it should not be undertaken without deliberation among the people’s elected representatives.

The importance of that design became apparent as Justice Neil M. Gorsuch questioned Sauer. Under the government’s logic, Gorsuch postulated, a future administration could declare an emergency for climate change and then impose taxes to address that emergency. Sauer conceded that it probably could.

The famous protectionist economist Ha-Joon Chang endorses Zohran Mamdani’s “democratic socialist” agenda for governing New York City – a reality to keep in mind when next assessing Prof. Chang’s understanding of markets and government.

Speaking of Mayor-elect Mamdani, GMU alum Holly Jean Soto is unimpressed.

“Did California’s fast-food minimum wage reduce employment?” – so ask Jeffrey Clemens, Olivia Edwards, and Jonathan Meer. (The answer is yes.)

Jeffrey Singer wisely wants drug prices to be set by market forces, unimpeded by government intervention.

David Henderson explains that Bernie Sanders should applaud the existence of billionaires.

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… is from page 359 of Gordon Wood’s great 1991 book, The Radicalism of the American Revolution (in this paragraph Wood quotes two observers – Frances Wright and Edward Everett – of early 19th-century America; footnotes deleted):

But it was increasingly clear that no one was really in charge of this gigantic, enterprising, restless nation. Government was weak, the churches were divided, and social institutions were fragmented. Nevertheless, “order” somehow seemed to “grow out of chaos,” and people guided themselves “without the check of any controlling power, other than that administered by the collision of their own interests balanced against each other.” The promotion of self-interest did not create the predicted anarchy, for in the new commercial society it became evident that “no man can promote his own interest, without promoting that of others.” The society was held together by an “interminable succession of exchanges.” And every single one of these exchanges counted, such that “the minutest excess or defeat in the supply of any one article of human want, produces a proportionate effect on the exchanges of all other articles.”

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I enjoyed my conversation earlier this Fall with Michael Liebowitz about Phil Gramm’s and my Triumph of Economic Freedom.

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The Cato Institute’s Colin Grabow explains that, “contra White House claims, removing IEEPA tariffs won’t spark a financial crisis. A slice:

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.

Jason Willick writes favorably of U.S. Supreme Court Associate Justice Neil Gorsuch’s commitment to the Constitution’s architecture. A slice:

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.

“Trump’s attorney concedes: His legal theory would let a president tax foreign cars to combat climate change.”

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.

My GMU Econ colleague Bryan Caplan wonders why Trump & Co. aren’t pushing for MAGA-izing the national debt. A slice:

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:

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… is from page 10 of the 2000 Liberty Fund edition of Geoffrey Brennan’s and James M. Buchanan’s 1985 book, The Reason of Rules:

[T]he rules that constrain sociopolitical interactions – the economic and political relationships among persons – must be evaluated ultimately in terms of their capacity to promote the separate purposes of all persons in the polity. Do these rules permit individuals to pursue their private ends, in a context where securing these ends involves interdependence, in such a way that each person secures maximal attainment of his goals consistent with the equal liberty of others to do the same?

DBx: Or, at any rate, such is the truly liberal criterion for assessing the value of rules.

Non-liberals – left, right, and center – are united in their insistence that socioeconomic rules must incite all individuals to act, as much as possible, in ways that promote particular collective goals. Liberals alone judge the worth of rules by how well or poorly the rules enable as many different individuals as possible each to pursue, with real prospects of success, his or her individually chosen goals.

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I’m very happy to have been interviewed by Daniel Freeman, of the Institute of Economic Affairs, on Phil Gramm’s and my Triumph of Economic Freedom.

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Doug Irwin and Alan Wm. Wolff, writing in today’s Wall Street Journal, explain that “Trump’s blanket tariffs are a bridge too far.” Two slices:

In invoking IEEPA, the president argued that “a lack of reciprocity in our bilateral trade relationships, . . . as indicated by large and persistent annual U.S. goods trade deficits, constitute an unusual and extraordinary threat to the national security and economy of the United States.” Economists retort that the half-century-old trade deficit, or the gradual slide in the share of U.S. employment in manufacturing over many decades, doesn’t constitute a national emergency. Tariffs were hiked against countries with which the U.S. has a trade surplus, and against countries with which the U.S. already has reciprocal free-trade agreements.

For all that, there is ample precedent against the court’s questioning an emergency declaration. IEEPA was used to declare national emergencies 69 times before President Trump’s second term. No court has ruled any emergency under IEEPA unwarranted. Congress delegated to the president the determination of what an emergency is, so a degree of deference to his judgment is in order.

Thus the main question before the court is whether blanket tariffs are a legitimate remedy under IEEPA. How strong is the legal case against the tariffs?

IEEPA makes no mention of tariffs. The intention of the act seems to have been to address national-security threats from unfriendly and hostile nations with sanctions or embargoes, not to “regulate” imports to address imbalanced or nonreciprocal trade. The phrase “regulate trade” is somewhat ambiguous, but Congress could have used the word tariff and didn’t. Moreover, the Trump tariffs are against all imports from every source. From a statute that doesn’t even mention tariffs, that seems a pretty large leap.

The central question is whether Congress delegated unlimited and unchecked authority over tariffs simply by the president’s declaring a national emergency. A look at the statutes dealing with trade clearly demonstrates that Congress has been careful in its grants of tariff authority to the executive branch. The president has often been granted authority to reduce tariffs pursuant to trade negotiations, but these grants—known as Trade Promotion Authority—were always temporary, and the last one expired in 2021. No legislation enacted since 1988 included any power to raise tariffs.

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In enacting IEEPA, did Congress intend this massive usurpation of its own authority over foreign commerce? Or is IEEPA a practical way to safeguard the nation’s interests consistent with the intent of the framers of our founding document? It’s one of the most important questions ever to come before the court.

Jacob Sullum – quoting from an economists’ amicus brief submitted in the case against Trump’s “Liberation Day” tariffs – is correct: “Trump’s economic fallacies are legally relevant in his tariff case”. (DBx: I’m among the economists who signed this amicus brief.) Two slices from Sullum’s essay:

Trade deficits “have existed consistently over the past fifty years in the United States, for extended periods in the United States in the nineteenth century, and in most countries in most years in recent decades,” the economists note. “They are thus not ‘unusual and extraordinary,’ but rather ordinary and commonplace.”

The brief adds that there is nothing inherently problematic about aggregate or bilateral trade deficits, such that they would constitute a “threat” to the United States. Even the term deficit is misleading in this context, the economists note, since the situation that Trump bemoans necessarily corresponds to a “foreign investment surplus.”

When a country “imports more than it exports,” the brief explains, that means it “receives more foreign investment than it invests abroad.” That is why “the leading explanations of the U.S. trade deficit view it as a sign of U.S. strength, not weakness.”

Trump seems to view foreign investment as a good thing. Yet “absent offsetting adjustments elsewhere,” the brief says, “these investments will increase the U.S. trade deficit.”

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It is therefore “odd to economists, to say the least, for the United States government to attempt to rebalance trade on a country-by-country basis,” the brief says. And contrary to Trump’s presumption of unfairness, “foreign tariff rates on US exports do not correlate positively with the size of US trade deficits.”

Also pointing out fatal flaws in the Trump administration’s arguments in support of its tariffs is Reason‘s Jack Nicastro. Here’s his conclusion:

The Supreme Court has a chance to strike down one of the most damaging policies of the second Trump administration. The weakness of the Trump administration’s arguments seems to bode well for the American consumers and business owners who have been harmed by the president’s IEEPA tariffs. Still, there’s always a chance that the Court sides with the president. If that happens, Trump will possess nearly unlimited tariff power on imported goods, and the separation of powers will continue to erode.

Clark Packard busts the myth that IEEPA tariffs are an essential tool for conduction foreign policy. A slice:

The administration’s argument that an ability to impose tariffs under IEEPA is needed to effectively manage the country’s foreign affairs is belied by historical experience. For nearly 80 years, the United States—first through the General Agreement on Tariffs and Trade and later via its successor, the World Trade Organization—has responsibly stewarded the rules-based international trading system. IEEPA tariffs played no role in the formation and flourishing of this system, nor did they contribute to other major foreign policy successes since the IEEPA’s 1977 enactment.

Justin Wise reports on the important role played by GMU Scalia Law’s Ilya Somin in promoting the litigation against Trump’s “Liberation Day” tariffs punitive taxes on Americans’ purchases of imports. A slice:

In briefs before the Supreme Court, small businesses have similarly argued that this case is “no different” from ones in which the Supreme Court blocked Biden-era policies due to a lack of clear congressional authority.

Notwithstanding Somin’s blogging, Trump’s tariff scheme appeared to be on a collision course with the Supreme Court.

Rick Woldenberg, who runs two educational toy businesses near Chicago, hired Akin Gump to pursue a separate case that earned victories in two lower courts. A group of Democratic-led states also brought a case and will share time with the private businesses during Wednesday’s arguments.

Still, Schwab said Somin’s initial post a couple weeks into the new Trump administration proved decisive in getting litigation started.

Benn Steil reveals who pays Trump’s tariffs. (HT Scott Lincicome)

Jeremiah Johnson argues that America needs a free-trade party. Two slices:

If Republicans are now the party of high tariffs and trade skepticism, Democrats can’t just be the party of “tariffs, but smarter.” America needs at least one of our major parties to stand up, loudly and clearly, for free trade.

The situation is ripe for Democrats to unapologetically champion trade because the damage being done by Trump’s tariffs is real and hitting so many sectors of the economy simultaneously.

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Trump is attempting to build an “imperial presidency” in his second term, where he can bypass Congress and rule via executive orders and decrees straight from the White House. Republicans in Congress seem perfectly content to let Trump rule that way. This is evident in his approach to immigration enforcement, his “efficiency” drive with DOGE, and in countless other areas. But it’s perhaps most true when it comes to trade policy. Article I, Section 8 of the Constitution gives Congress the sole power to “collect Taxes, Duties, Imposts and Excises” on foreign countries. Over the years, Congress has passed laws delegating this power to the president in certain circumstances. But Trump has taken a tool meant for emergency measures and illegally used it to pass sweeping tariffs on every country in the world.

Jonah Goldberg adds his sharp voice to those who are exposing the silly and tendentious interpretation of Leonard Read’s classic 1958 essay “I, Pencil” by American Compass’s Chris Griswold. A slice:

In short, whatever you think about the decision to put together the final six components—of a pencil or a Sharpie—in America, Read’s points still hold. The most relevant for our purposes is this: No person or no nation is smart enough, knowledgeable enough, or skilled enough to do it alone efficiently. The “invisible hand” is just another term for price signals. Diverse decision-makers look to prices as a way to allocate resources efficiently and profitably.

Bizarrely, Griswold claims that [Newell Brands CEO Chris] Peterson figured out how to onshore Sharpies without reference to “price signals.” This is ridiculous. If he didn’t pay attention to price signals, why make the tip in Japan? Why buy affordable robots instead of unaffordable ones? Any CEO who ignores price signals will not be a CEO for very long.

Wall Street Journal columnist Jason Riley rightly criticizes Florida governor Ron DeSantis’s hostility to immigrants. A slice:

Like Mr. Trump, however, Mr. DeSantis seems eager to play to the stereotype. Their attacks on H-1B visas, which are often used to hire scientists and engineers, suggest an animus toward foreign workers regardless of their legal status.

Mr. DeSantis says the crackdown on H-1B hiring is necessary to protect jobs for Americans, but the jobless rate in Florida is below 4%. According to the National Foundation for American Policy, data from August show that the national unemployment rate is 3% in computer and math occupations and just 1.4% in architecture and engineering. Hiring foreign nationals isn’t necessarily a money-saver for employers, as opponents claim it is. An academic analysis of immigrant pay published in 2021 concluded that “in computer and mathematical sciences, temporary work visa holders on average make about 14% more than their U.S.-born counterparts.”

Banning foreign nationals from positions in academia makes as much sense as banning them from filling spots on the Florida Panthers. Most of the hockey team wasn’t born in the U.S. Does the governor have a problem with that? Should the Panthers be forced to reserve spots for players born in Florida or the U.S., or would that put the team at a competitive disadvantage against opponents who field the best players, regardless of national origin?

Kimberlee Josephson distinguishes genuine sources of economic growth from imaginary sources.

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… is from page 88 of my late, great colleague Walter Williams’s 1995 volume, Do the Right Thing; specifically, it’s from Walter’s October 11th, 1993, column (for which I cannot find a link) “School Choice”:

The charge that choice will destroy public schools boils down to confessing that public schools are so rotten that, if given a choice, parents would opt out. Saying that parents can’t make wise choices is another example of the education establishment’s demeaning and paternalistic attitude. Even the most ill-informed parent could not do as much educational harm as many public schools now do.

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Here’s a letter to a now-frequent correspondent.

Mr. B__:

You mistake my insistence that Americans are fortunate today not to have as many factory jobs as we had in the past – and my identifying myself as a son and grandson of pipefitters – as evidence that I’m “ashamed” of my father and grandfather.

Nothing could be further from the truth. I’m immeasurably proud of my father and grandfather, and I’m grateful that they had the economic opportunities then afforded to them. Even though I grew up in the 1960s and 1970s in a working-class American family, my siblings and I were nevertheless among the wealthiest children ever to live.

But ordinary Americans today are even wealthier, in no small part because job opportunities in the service sector (where I happily work) have expanded and improved. I assure you that my father and grandfather would have thought me mad had I dropped out of college to follow in their career footsteps.

Loretta Lynn was a famous American country-music singer-songwriter, whose anthem song, which she wrote in 1969, was “Coal Miner’s Daughter.” With unmistakable sincerity, she sang that she was “proud to be a coal miner’s daughter.” But she chose to work, not in a coal mine, but in the service sector (specifically, entertainment). In doing so, she earned a much better living than her father ever did.

Surely you wouldn’t accuse Ms. Lynn of being ashamed of her father – and you shouldn’t accuse me of being ashamed of mine.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030