Legal Docket: Tariffs and the law

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NICK EICHER, HOST: It’s The World and Everything in It for this 10th day of November, 2025. We’re so glad you’ve joined us today. Good morning! I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard. It’s time for Legal Docket.

COMMERCIAL: Learning! (music plays) Learning to build, learning 1s, 2s, and 3s. [fades sharply] Learning about science...

That’s an ad for a company called Learning Resources. It sells hands-on, “experiential” learning toys. A family owned business based in Chicago.

But, most of the company’s products are manufactured overseas and imported to the U.S.

EICHER: President Trump campaigned on imposing tariffs on foreign made products. And Learning Resources had planned for a Trump victory along with a higher cost of doing business.

But the company underestimated how big a bite tariffs would take. They were not prepared for this announcement from April 2nd this year.

TRUMP: My fellow Americans, this is liberation day. ….Our country and its taxpayers have been ripped off for more than fifty years. But it is not going to happen anymore. It’s not gonna happen. (Cheers)

EICHER: The president had already placed tariffs on imported goods from Mexico, Canada, and China. This time he announced “reciprocal” tariffs —starting at 10 percent for all countries… and higher for those whose companies sell more in the U.S. than what they buy from the U.S.

REICHARD: For Learning Resources the cost was too high. Last year, tariffs cost the company a manageable 2.3 million dollars.

The new tariffs would increase costs almost 50-fold, to 100 million dollars. More than the value of the product itself. So, the company sued.

EICHER: As did a wine importer called V.O.S. Selections in New York. Twelve states joined that lawsuit.

Each dispute reached the Supreme Court in different ways. Along the way, the president lost in every lower court, but no ruling stopped the tariffs, so they remain in effect today.

REICHARD: The Supreme Court combined the cases into one and fast-tracked them for argument. Both deal with the same issue. President Trump relied on a 1977 law known by the acronym IEEPA… the International Emergency Economic Powers Act. Past presidents have used IEEPA’s powers. President Carter, for example, used it to freeze Iranian assets during the hostage crisis.

EICHER: No president has used IEEPA for tariffs. Until President Trump, in his second term. So the question is this: Does IEEPA give a president the power on his own to impose tariffs?

REICHARD: WORLD correspondent Jeff Palomino covered these cases for us. Good morning, Jeff.

JEFF PALOMINO: Good morning!

REICHARD: A long argument, more than two and a half hours. What themes arose during that time?

PALOMINO: Several, actually. First, the text of IEEPA. It doesn’t mention tariffs at all, but it does say the President can “regulate…importation.” So, does the word “regulate” include tariffs?

REICHARD: Okay. So once again, the meanings of words. Very common at the Supreme Court. That’s one theme. What another theme that came up?

PALOMINO: It’s called the major questions doctrine. That means Congress must explicitly say “Yes, the president can do that” when it passes laws that have major effects on our economy or political life. The President or agencies cannot just assume they have that power.

REICHARD: Alright, so far, themes of words - regulate and tax - and the major questions doctrine. Anything else?

PALOMINO: A lot of questions from the Court about something called the non-delegation doctrine. This is a long-held rule that says if Congress passes a law that - in some way - gives its constitutional power to another branch it has to do so with "intelligible principles" meaning the law has to have “a floor and a ceiling”. Only with this can the Court provide meaningful checks and balances.

REICHARD: Alright. Let’s hear what U.S. Solicitor General John Sauer argued for the administration.

SAUER: On April 2, President Trump determined that our exploding trade deficits had brought us to the brink of an economic and national security catastrophe. The phrase "regulate ... importation" plainly embraces tariffs, which are among the most traditional and direct methods of regulating importation.

PALOMINO: The President’s lawyer then made a crucial distinction which was critical to the President’s argument:

SAUER: We don't contend that what's being exercised here is the power to tax. It's the power to regulate foreign commerce. These are regulatory tariffs. They are not revenue-raising tariffs. The fact that they raise revenue is only incidental.

REICHARD: He’s saying these tariffs aren’t even taxes. They’re outward facing and regulate imports. And IEEPA allows the President to regulate imports subject to a declared emergency. Ergo, it’s legal.

What did the justices think of that argument?

PALOMINO: I’d say most weren’t buying it. Liberal Justices Elena Kagan, Sonia Sotomayor, and Ketanji Brown Jackson all said tariffs are taxes and that only for Congress to do.

But Chief Justice John Roberts seemed to lean that way, especially as it relates to the Major Questions Doctrine we mentioned earlier. Here he is posing a question to Sauer.

ROBERTS: You have claimed a source in IEEPA that had never before been used to justify tariffs… but the vehicle is imposition of taxes on -- on Americans, and that has always been the core power of Congress. So to have the President’s foreign affairs power trump that basic power for Congress seems to me to kind of at least neutralize between the two powers, the executive power and the legislative power.

REICHARD: What else jumped out to you during arguments on behalf of the President?

PALOMINO: Well, some court-watchers see Justice Amy Coney Barrett as a swing vote in this case, so many listened closely to her questions.

When the President’s lawyer, Sauer, argued the phrase “regulate…importation” is rooted in history to always have include the authority to tariff, Justice Barrett asked this:

BARRETT: Can you point to any other place in the Code or any other time in history where that phrase together, "regulate ... importation," has been used to confer tariff-imposing authority?

Sauer cited just two examples: a lower-court case - meaning not a Supreme court case - from the ‘70s that Justice Barrett dismissed as quote “a contested application.” Sauer also cited IEEPA itself. So, not a strong answer.

Then came Justice Neil Gorsuch. He really grilled the government on its claim that because IEEPA involves foreign commerce, Congress - when it passed the law - was simply affirming the power the Constitution already gives the President over foreign affairs.

Justice Gorsuch - he was struggling to hear any limiting principle in that.

GORSUCH: So 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.

REICHARD: Alright, let’s turn to the arguments on the other side, for the businesses and states who sued to stop these tariffs.

PALOMINO: Well, the lawyer for the small businesses, Neil Katyal, said the word “regulate” is specific and it prohibits the president from imposing taxes or raising revenue. That prompted Justice Samuel Alito to pose a hypothetical in this exchange with, edited for flow:

ALITO: Do you think all tariffs are revenue-raising? Suppose that instead of imposing these across-the-board tariffs, suppose that an executive order imposed a tariff on one particular country and provided that this would take effect in 90 days. Would that be a revenue-raising tariff?

KATYAL: I think that would.

ALITO: Look, I don’t doubt that there are edge cases. That is what this court’s confronted just recently….and you said, look, what is a tax is sometimes very hard, what is revenue-raising. This is obviously revenue-raising. Their own brief to the Court says it's going to raise 4 trillion dollars.

Now, both lawyers for the businesses and states conceded that the words of IEEPA allow the President to take all sorts of actions. For example, he could put quotas on imports. But they argued that doesn’t mean tariffs.
Listen to this exchange between Justice Brett Kavanaugh and lawyer for Oregon, Benjamin Gutman:

KAVANAUGH: Your interpretation of the statute, …would allow the President to shut down all trade with every other country in the world or to impose some significant quota on imports from every other country in the world, but would not allow a 1 percent tariff. And that leaves, in the government's words, in its brief, an odd donut hole in the statute. Why would a rational Congress say, yeah, we’re gonna give the president power to shut down trade. I mean, think about the effects. But you’re admitting that power’s in there. But can’t do a 1% tariff. …That doesn't seem… to have a lot of common sense behind it.

GUTMAN: I think it absolutely does because it's a fundamentally different power. It's --it's not a donut hole; it's a different kind of pastry. (Laughter.)

KAVANAUGH: And on that --on that power --that's a good one.

REICHARD: (laughs) All right, Jeff, want to make a prediction?

PALOMINO: You know that’s risky! The court heard this case on a fast track - so I predict the court will also rule quickly on this. Now, on the question of tariffs, I do think the votes appear to be there to overturn them.

No doubt they’re a key negotiating tool for President Trump. But no doubt either they’ve put a strain on U.S. businesses and in turn consumers.

It’s worthwhile to pause and consider how much power the President really should have. As lawyer Katyal for the businesses pointed out, the power given to one is power given to all.

KAYTAL: It’s simply implausible that in enacting IEEPA Congress handed the President the power to overhaul the entire tariff system and the American economy in the process… If the government wins, another president could declare a climate emergency and impose huge tariffs …without floors or ceilings, as Justice Gorsuch said…..This administration would declare it a hoax. The next president may not quite say that.

REICHARD: Well, that’s where those pesky limiting principles do come in. Alright, Jeff, thanks so much! Good job.

PALOMINO: You bet, Mary.

REICHARD: And that’s this week’s Legal Docket!

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