A Florida lawsuit challenges the tariffs recently imposed by the President. A stationary company in Florida, called Simplified, filed a complaint challenging the tariffs imposed in February on China. While the lawsuit only directly challenges the China tariffs, the arguments apply to all of the recently imposed tariffs including the April 2 “Liberation Day” tariffs. 

The Constitution says taxation is within the purview of Congress, not the President. Certain statutes enacted by Congress, however, authorize the President to impose tariffs in particular circumstances and with particular limitations. The President justified both the February tariffs, and the Liberation Day tariffs under the International Emergency Economic Powers Act (IEEPA). 

IEEPA does not mention tariffs and has never been used as a basis for tariffs. It does, however, empower the President to “deal with any unusual and extraordinary threat, which has its source in whole or in substantial part outside the United States… if the President declares a national emergency with respect to such threat.” 50 U.S.C. § 1701. The administration claimed the February tariffs against China (and others, including Canada) are necessary to address “the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl.” 

The Simplified lawsuit argues that IEEPA does not expressly authorize the President to impose tariffs and, under the “major questions” doctrine, cannot not authorize the President to impose tariffs. The major questions doctrine requires executive actions having “vast economic and political significance” to be “clearly” authorized by Congress. Util. Air Regul. Group v. EPA, 573 U.S. 302, 324 (2014). Simplified argues that IEEPA does not “clearly” authorize the President to impose tariffs (it does not mention tariffs at all) and the President therefore exceeded his statutory and constitutional authority in imposing them. For purposes of the doctrine, “clearly” means something like “explicitly.” Thus, even if a reasonable interpretation of IEEPA suggests the administration should be empowered to impose the tariffs, it would not be allowed under the major questions doctrine because the authority is not “clearly” expressed.

Simplified also argues that even if IEEPA does authorize the President to impose tariffs, the President must demonstrate the tariffs are “necessary” to address the drugs/immigration emergency under section 1703 of IEEPA. 50 U.S.C. § 1703. Simplified says that the President has not made such a showing. 

Legal commentators have similarly questioned the justification proffered by the administration for the Liberation Day tariffs. The administration claimed the Liberation Day tariffs are necessary to address “the large and persistent trade deficit that is driven by the absence of reciprocity in our trade relationships and other harmful policies like currency manipulation and exorbitant value-added taxes (VAT) perpetuated by other countries.” Commentators have questioned whether these long-standing economic conditions qualify as an “emergency” under IEEPA. 

Finally, a number of commentators have argued that, if the IEEPA delegates broad taxing authority to the President, that delegation is unlawful under the “nondelegation doctrine.” That doctrine holds that, when the Constitution vests particular powers in one branch of government (e.g., taxation to Congress), that branch cannot delegate the authority to another branch. While it sounds straightforward, the doctrine is not a hard and fast rule and courts’ application of the doctrine has been varied and nuanced over the years. 

More litigation is sure to follow. And, given the administration’s frequent U-turns on tariffs since taking office, the situation is fluid. The unclear legal footing makes it even more so.