US Issues Most Complete Defense of Reciprocal Tariffs to Date in Lead CIT Case

The brief said that the "major questions doctrine," which requires explicit delegations of authority to executive agencies when they regulate on issues of major economic or political significance, doesn't apply to the president's use of IEEPA, and that Trump's declaration of sustained trade deficits as a national emergency is an unreviewable "political question." Throughout the brief, the U.S. responded to various claims made by both the five importers and a group of amici that includes former lawmakers, judges, academics and appointed officials (see 2504240028).

The suit, filed by the conservative Liberty Justice Center, challenges the reciprocal IEEPA tariffs as exceeding the bounds of IEEPA and the statute itself as an unconstitutional delegation of power. The center also argues that bilateral trade deficits cannot amount to an "unusual and extraordinary" threat as required by IEEPA before presidential action is taken. Thus far in the case, the trade court rejected the center's bid for a temporary restraining order on the ground that the five importers weren't likely to suffer irreparable harm before the court could consider the companies' PI motion (see 2504210050).

Now responding to the companies' combined motion for a PI and for summary judgment, the U.S. said, among other things, that the companies can't challenge the president's declaration of a national emergency. As IEEPA and the National Emergencies Act "make clear," whether a threat is "unusual or extraordinary is reviewable only by Congress, not by the courts," the brief said. The U.S. argued that the courts have "consistently held" that presidential declarations of emergencies, "and the adequacy of his policy choices addressing those emergencies under IEEPA, are unreviewable."

The government said this doesn't mean the emergency declarations go "unreviewed," rather, they are reviewed by Congress. It is the legislature, not the judiciary, that supervises emergency declarations under the current statutory scheme, the brief said.

The U.S. added that the five companies' "personal opinions on economic theory," only "reinforce" why the court can't review Trump's emergency declaration. The government said the plaintiffs argue that persistent trade deficits are not "necessarily a problem" based on one "Washington think-tank paper from six years ago" and the "mainstream economic consensus." The question of whether the effects of "persistent trade deficits" pose more than an ordinary or usual threat is "not fit for judicial resolution" and is instead for the "political branches to resolve," the brief said, noting the ongoing debates in Congress on whether to pare back presidential tariff authority.

The government also said that even if the court were to review the "merits of the President's declaration," the plaintiffs would still fail, since a "national emergency exists" based on the effects of "persistent trade deficits." The brief said the deficits eroded U.S. domestic production capacity, military readiness and the country's national security posture.

The U.S. went on to defend the means Trump chose to address this emergency, claiming that they are "reasonably related" to the emergency, since the tariffs have a "direct effect" on the trade deficit. And while the amici said Trump's true goal is to generate revenue, the government said "IEEPA does not say that actions taken to deal with a national emergency must not generate revenue."

The defense of the tariffs also covered at length the president's claimed ability to impose tariffs under IEEPA -- a statute that only says the president can "regulate" imports. The brief started by providing multiple dictionary definitions of the word "regulate," and declaring that the courts have already upheld the use of this word to convey tariff-setting authority. The U.S. cited the key Yoshida International v. U.S. decision, in which the predecessor court to the U.S. Court of Appeals for the Federal Circuit said President Richard Nixon could impose tariffs under the Trading With the Enemy Act, IEEPA's predecessor that used identical language regarding the powers conveyed to the president.

And while the Liberty Justice Center and the amici claim that IEEPA was passed to constrain the president's power under TWEA, the U.S. said that IEEPA uses the same language as TWEA and that Congress was fully aware of the holding in Yoshida. The government cited the House Report on IEEPA, which cited Yoshida and its holding. "Congress knew that TWEA had been used to impose tariffs, yet it chose to use the same language that had conferred such authority, without modifying it or expressing precluding their imposition," the U.S. claimed.

The brief said the power to "regulate" imports by imposing tariffs "is similar to the other powers granted" in IEEPA, including the power to block, prevent or prohibit imports. These powers granted by Congress suggest that the legislature "entrusted the President with wide-ranging powers with respect to imports rather than carefully picking and choosing isolated types of interventions," the brief said. And any attempt to read the list of powers granted by IEEPA as conveying "discrete" powers instead of broad ones would make the word "regulate" superfluous if "regulating" imports doesn't allow for the imposition of tariffs.

The plaintiffs and amici repeatedly invoked congressional delegation of other trade statutes to argue that Congress knew how to impose tariff-setting authority if it wanted to. In particular, the parties invoked Section 122, which lets the president impose limited tariffs to address balance-of-payment issues. The U.S. said in response that the existence of this law doesn't "narrow the scope of the later-enacted IEEPA." The government emphasized that IEEPA was passed after Section 122 and that Section 122 permits "nonemergency tariffs," while IEEPA is used to address emergency situations.

In addition, the U.S. addressed claims from both plaintiffs and amici that IEEPA violates the "major questions" doctrine. The government said this doctrine is "inapplicable" to the statute, since the doctrine only applies to the conferral of authority to administrative agencies and it doesn't cover "national-security and foreign-policy matters."

The brief said the significance of the executive action alone doesn't implicate the doctrine, adding that none of the "remaining indicia of major questions" are present here. For instance, the use of IEEPA isn't "unheralded power," nor is the statute's authorization of presidential power a "catch-all clause" or an "ancillary provision" of the statute. Instead, IEEPA is a broad delegation of authority over foreign commerce "to deal with broad, consequential problems facing the country," the U.S. said.

Relatedly, the government argued that IEEPA is a valid delegation of congressional authority, leaning heavily on the Yoshida decision. The U.S. stressed that the Yoshida court said TWEA was valid delegation of authority, adding that IEEPA "has even more limitations than those Yoshida upheld for TWEA," showing that Congress "clearly provided intelligible principles" that "meaningfully constrain the President's discretion."