Tariffs, tyranny and the Gilded Age delusion

President Donald Trump often speaks fondly of the 19^th century Gilded Age and the use of tariffs. Others remember it as a time when powerful industrialists, known as the "robber barons," manipulated economic policy for personal gain by using tariffs and corrupt backroom deals.

Trump continues to press forward in the quest to use tariffs to restructure the international trading system. On July 31, he unveiled the revised Executive Order (EO) entitled "Further Modifying the Reciprocal Tariff Rates." The EO revises the "ad valorem duties" (tariffs) on goods from foreign trading partners pursuant to his declared national emergency (April 2, 2025, EO 14257).

Trump maintains he can use reciprocal tariffs based on "the constitutional authority vested in the President and the laws of the United States, including the International Emergency Economic Powers Act (IEEPA) (50 U.S.C. § 1701 et seq.); the National Emergency Act (NEA) (50 U.S.C. § 1601 et seq.); Section 604 of the Trade Act of 1974 (19 U.S.C. § 2483); and section 301 of title 3, United States Code."   

This laundry list of authorities does not provide Trump with clear legal support for the use of worldwide reciprocal tariffs. Rather, it is simply an arrogation of executive power on the road to an autocracy.   

King George's imposition of taxes without consent of the colonists sparked the rallying cry of the American Revolution -- "no taxes without representation." The Founders were deeply concerned about the President exceeding the bounds of his constitutional authority through claims of "inherent" authority.

As a result, the Founders placed limitations on presidential power by adopting a constitutional system of checks and balances. This system expressly grants Congress, not the President, the power of the purse. Congress has the exclusive power to "lay and collect taxes, duties, imposts and excises" and to regulate foreign commerce (Article I, § 8, cl. 1 and 3).

As President, Trump has the power to impose tariffs only to the extent that Congress authorizes it. He lacks the "inherent" presidential authority to impose tariffs whenever he wants, at levels of his choosing, against whatever countries and products he selects, and for as long as he desires. But this is the power he claims.

The statutes Trump cites do not support his use of reciprocal tariffs. Properly understood, the IEEPA is a sanctions and embargo law. It gives the President the authority to "regulate" (§1702 (a)(1)(A) ... and to prevent or prohibit ... importation (§1702(a)(1)(B))."  Section 1702 does not clearly authorize the President to impose a worldwide-system of bilateral retaliatory tariffs. In fact, the statute doesn't mention tariffs.

The trigger for using the power under Section 1702 is Section 1701. It provides that any authority granted the President by Section 1702 may be used "to deal with any unusual and extraordinary threat" if the President declares a national emergency with respect to the threat. Section 1701 is not a freestanding source of power but is linked to meeting the requirements of the sanctions and embargo law.

Trump has run roughshod over the IEEPA national emergency requirement. The idea that longstanding "trade deficits constitute an unusual and extraordinary threat to the national security and economy of the United States" is not factually supportable. Heretofore, the American economy has been the envy of the world.

The other authorities cited by Trump are also problematic. The Trade Act of 1974 (19 U.S.C. § 2132) gives the President the broad authority to counteract "large and serious" balance-of-payment deficits within the limits set by Congress. Section 2132(a)(3) allows the President to use temporary import surcharges for a period not exceeding 150 days. But Trump sees the reciprocal tariffs as a permanent source of revenue for the U.S. and not one limited by time. Thus, the Trade Act doesn't support what he wants to do.

The Presidential delegation of authority to cabinet members clearly is not a grant of authority to impose tariffs, reciprocal or otherwise (3 U.S.C. § 301). It seems to rest on the mistaken foundation of the "inherent" delegation of presidential power that was rejected by the Founders.

On July 31, 11 judges on the Court of Appeal for the Federal Circuit (Nos. 25-1812, 25-1813) heard arguments in V.O.S. Selections, Inc. v. Trump (Nos. 25-1812, 25-1813). The decision, which will examine Trump's reciprocal tariff claims, is expected in a week or so. The case is on appeal from United States Court of International Trade (Nos.25-00066 and 25-00077) that rejected Trump's IEEPA claim (3-0): "The court does not read the IEEPA to confer such unbounded authority and set aside the challenged tariffs imposed thereunder." It also held that Plaintiffs were entitled to injunctive relief.

The Supreme Court has held that Congress must speak clearly when delegating its authority. But the authorities Trump cites do not clearly give him unbounded global tariff authority. The claim that he has the authority to set, reset, rescind, and reapply reciprocal bilateral tariffs in any amount and against any foreign product based on the view that trade deficits constitute a national emergency is not supportable and creates the environment for political corruption. Neither "an emergency" nor an "unusual and extraordinary threat" exists. If a national threat exists, it is to the rule of law.