Susan Shelley: Supreme Court’s decision on tariffs may not matter at all

In the final analysis, the U.S. Supreme Court’s decision on tariffs may not matter at all.

“An unfortunate ruling,” President Donald Trump said in his televised State of the Union address, “But the good news is that almost all countries and corporations want to keep the deal that they already made.”

For nearly a year, Trump used tariffs, the threat of tariffs and relief from tariffs as leverage in international relations of all kinds. The U.S. Treasury collected hundreds of billions of dollars as a result. Then on February 20, the Supreme Court ruled 6-3, really more like 3-3-3, or 3-1-1-3-1-3-1, that the president did not have the legal authority to impose those tariffs. It could mean the U.S. Treasury has to issue massive refunds. Nothing about that is clear. There were seven separate opinions in the 170-page decision, and none of the justices offered any guidance.

But it may not matter. Just as Trump used tariffs to negotiate trade and national security deals before, he has considerable power to negotiate the same deals again.

Other countries and corporations “will continue to work along the same successful path that we had negotiated before the Supreme Court’s unfortunate involvement,” Trump said in his speech, “knowing that the legal power that I as president have to make a new deal could be far worse for them.”

Sounds like a “no refunds” policy that Ticketmaster would envy.

The tariff case is Learning Resources, Inc., v. Trump. Chief Justice Roberts authored the Court’s opinion, which is made up of Parts I, II-A-1 and II-B of the decision. Those parts were joined by Justices Sotomayor, Kagan, Gorsuch, Barrett and Jackson. They all agreed that the law the president relied on for authority to impose tariffs, the International Emergency Economic Powers Act, or IEEPA, granted the president certain powers to “regulate . . . importation,” but this did not include tariffs.

After that, it was like a nine-judge pile-up on a two-lane highway.

Roberts, Gorsuch and Barrett relied on the “major questions doctrine” – the idea that a new and significant exercise of power by the executive branch requires “clear congressional authorization.” In previous cases, the Court has used this doctrine to stop federal agencies from improperly expanding their power by finding new meanings in the words of old laws. These three justices agreed on the “major questions” portions of Roberts’ opinion, Parts II-A-2 and III.

Kagan, Sotomayor and Jackson have never agreed with the “major questions doctrine,” so they cited other reasons to justify striking down the tariffs. Kagan wrote a concurring opinion signed by Sotomayor and Jackson, and Jackson wrote a separate opinion agreeing with the result for different reasons.

Gorsuch wrote a separate opinion that essentially said everyone else was wrong. Barrett wrote a separate opinion to say that on one point, Gorsuch was wrong.

And those were the justices in agreement.

In disagreement with the outcome were Justices Kavanaugh, Alito and Thomas. Kavanaugh wrote a 65-page dissenting opinion joined by Alito and Thomas, and Thomas also wrote a separate opinion.

Seven opinions in one decision.

Kavanaugh’s dissent looks back in time to show that IEEPA did in fact authorize the president to use tariffs in the way Trump used them. Pages of historical examples illustrate that Trump’s power to impose tariffs was clearly authorized by Congress in a way that satisfied the “major questions doctrine.” He was not exercising a “newfound” or “unheralded” power that the doctrine would prohibit. From James Madison’s era to Richard Nixon’s administration, the terms “regulate . . . importation” had been understood to include tariffs.

“President Nixon in 1971 imposed 10 percent tariffs on almost all imports of foreign goods,” Kavanaugh wrote. Nixon relied on a 1941 law called TWEA, the Trading with the Enemies Act. It gave the president the power to “regulate . . . importation” during wartime, and “those tariffs were upheld in court.”

Six years later, in 1977, Congress amended TWEA to divide it into two laws. Both had the “regulate . . . importation” language, but the second law would apply during peacetime if there was a declared national emergency. This law was IEEPA, “directly drawn” from TWEA, the law Nixon had so recently used to impose broad and high-profile tariffs.

Chief Justice Roberts’ opinion for the Court states that in IEEPA’s “half century of existence, no president has invoked the statute to impose any tariffs – let alone tariffs of this magnitude and scope.” But just prior to IEEPA, identical language in TWEA was used in 1971 to impose tariffs. So even though the law doesn’t use the specific word “tariffs” or “duties,” Kavanaugh wrote, “in IEEPA Congress clearly authorized the President to impose tariffs to ‘regulate . . . importation’ in national emergencies.”

Kavanaugh criticized the way the chief justice’s opinion “would chart a new course for the major questions doctrine, extending it for the first time deep into the foreign affairs sphere.“ Counting heads in the seven separate opinions, Kavanaugh finds only three of the nine justices agreeing to that. “Will the Court apply the major questions doctrine in the foreign affairs context again in the future? Or is this a ticket good for one day and one train only?” he asked, “Time will tell.”

Finally, Kavanaugh exhaustively lists other federal statutes that the president may invoke to impose tariffs without having to rely on IEEPA emergency powers.

That’s why President Trump isn’t much constrained, if at all, by the Supreme Court’s decision in this case. He still has leverage to negotiate deals, plus a clearer legal roadmap that may help to keep his tariffs out of court.

At first blush it may have seemed that this case was about a president overreaching and the Supreme Court stepping up to stop him. It could turn out to be the opposite: the Court overreaching, and the president freed to do his job.

Write Susan@SusanShelley.com and follow her on X @Susan_Shelley