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Trump's Tariffs Could Backfire in Numerous Ways

Donald Trump just loves, loves, loves imposing tariffs on countries he doesn't like. The only thing that is almost as much fun for him is addressing large cheering crowds and telling them about all the tariffs he will impose. In third place is lying about tariffs and claiming the exporting country pays them.

One potential pitfall is that collectively, tariffs may spur inflation, and we all know how much people enjoy inflation. A second potential problem is that some countries may impose retaliatory tariffs on American products. Companies that could be hit include Boeing, Caterpillar, John Deere, and Microsoft. They won't like that a bit and will definitely let Trump know.

But there is a third and potentially much bigger problem lurking in the background. The Constitution clearly states that only Congress has the power to impose tariffs. Congress has passed some laws delegating tariff power to the president in certain emergencies. The limits of those laws are being challenged in court.

One ground is that there is no emergency and the president simply announcing there is an emergency doesn't count. If the president can announce an emergency whenever it suits him and can then levy tariffs, in effect he has usurped a clear power allocated to Congress. Another line of attack is that Congress does not have the power to delegate one of its core powers at all. The Supreme Court has latched onto this argument numerous times in the recent past. For example, the Court has ruled that some independent agencies can't exercise their own discretion on matters on their turf unless Congress has explicitly delegated that authority. Of course, the Court could just ask Trump what he wants and then do it. That would save it a lot of trouble.

If the Supreme Court were to rule that the president does not have the power to levy tariffs with a stroke of his pen, undoing what he has already done would be nearly impossible. Importing companies (say, Walmart) could sue to get the government to reimburse them for the tariffs they have already forked over. Could Walmart try to reimburse consumers? It would be very complicated. (V)



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