The Supreme Court will hear oral arguments this week in V.O.S. Selections, Inc., et al. v. Trump (“V.O.S. Selections”), the case challenging the President’s claim the International Emergency Economic Powers Act (“IEEPA”) authorizes his imposition of sweeping tariffs on imports. Both the Court of International Trade (“CIT”) and the Court of Appeals for the Federal Circuit (“CAFC”) rejected the President’s argument. The President appealed, asking the Supreme Court to overrule the CIT and CAFC.
The discussion below reinforces the lower courts’ decisions. Both the CIT and CAFC correctly held IEEPA does not delegate Congress’ taxing power. Neither the statute nor its legislative history mentions the word tariff, much less a delegation of authority allowing the President to impose tariffs at will.
The path IEEPA took through Congress reinforces that conclusion. A delegation of tariff authority constitutes a revenue measure within the meaning of the Origination Clause of Article I of the Constitution. The House and Senate rules prescribe a unique path for consideration of all such measures – a path Congress did not follow in considering IEEPA.
Thus, contrary to the President’s claim IEEPA implicitly delegated the power to impose tariffs, Congress’ consideration of the legislation does not evince an intent to extend that power to the executive.
The Power IEEPA Didn’t Grant
Before both courts, the President argued IEEPA, which authorizes him to regulate and even prohibit imports, should be read broadly to embrace the power to impose tariffs as well. The CIT and CAFC rejected the claim the statutory language was sufficiently malleable to allow that conclusion.
In that, the courts were right. But, their close parsing of the statutory language missed a critical – and, in my view, dispositive – distinction between regulating imports and taxing them. Regulating imports does not raise revenue, tariffs do.
Why does that matter? A delegation of authority to impose tariffs is, in constitutional parlance, a revenue measure subject to the Origination Clause of Article I of the Constitution and the rules of the House and Senate governing the consideration of such legislation. The implications of the Origination Clause and House and Senate rules for the President’s argument are stark.
The Origination Clause of the Constitution requires all revenue legislation to begin in the House of Representatives, the elected body closest to the people. From there, revenue measures are subject to the rules governing either house of Congress. Those rules grant exclusive jurisdiction over revenue measures to the Ways and Means Committee in the House and to the Finance Committee in the Senate. The inclusion of subjects other than revenue measures in the legislation is irrelevant – jurisdiction over legislation incorporating revenue measures resides with Ways and Means and Finance.
Thus, if IEEPA incorporated a delegation of authority to impose tariffs – a measure that indisputably raises revenue – the bill would have been deemed a revenue measure within the scope of the Origination Clause of Article I of the Constitution. The legislation would have been automatically referred to the House Ways and Means Committee, which would have reported it to the floor for a vote by the House as a whole.
If the measure passed the House, it would have been sent to the Senate, where, as a revenue measure, it would have automatically been referred to the Finance Committee. The Finance Committee, in turn, would have reported the bill to the Senate floor for final passage.
None of that happened. When introduced, the legislation was referred to the House International Relations Committee, not Ways and Means. No point of order was made suggesting the bill was a revenue measure and should have been referred to Ways and Means. The bill reported by International Relations Committee and sent to the House floor contained no mention of tariffs, much less an explicit delegation of power to the President to impose them. The report accompanying the bill was similarly silent with regard to a delegation of tariff authority to the President.
Similarly, in the Senate, the House-passed bill was referred to the Committee on Banking, Housing and Urban Affairs, not the Finance Committee. No objection was made on the ground that the bill contained a revenue measure. Neither the Banking Committee’s revised bill nor the accompanying report by the Banking Committee mention either tariffs or a delegation of tariff authority.
In sum, nothing in Congress’ consideration of IEEPA followed the legislative path Article I of the Constitution and the House and Senate rules prescribe for a delegation of tariff authority to the President. As such, IEEPA’s path through Congress reinforces the conclusion compelled by the statutory language – neither body intended to convey the tariff power the President now claims.
The Dog That Didn’t Bark
In the story Silver Blaze by Sir Arthur Conan Doyle, Sherlock Holmes solves the mystery of a missing thoroughbred and the death of its trainer by turning his attention from what happened, to what didn’t.
Because of the racehorse’s value, its owner always posted a stable boy to guard the horse at night and a dog always slept in the horse’s paddock. On the night of the crime, the stable boy was drugged, allowing the thief to escape with Silver Blaze. The dog didn’t bark.
In a colloquy with Holmes, the horse’s owner, Colonel Ross, asks whether there was any point to which Holmes would like to draw his attention. Holmes responds, “To the curious incident of the dog in the night-time.” Somewhat annoyed, Ross retorts, “The dog did nothing in the night-time.” To which Holmes replies, “That was the curious incident.” Holmes reasoned the dog’s silence indicated the thief was someone well-known to the dog, which led to the ultimate unmasking of the thief.
Holmes’ logic applies with equal force to the President’s assertion that IEEPA authorizes the sweeping import tariffs he imposed earlier this year. If IEEPA incorporated a delegation of authority to impose tariffs as the President claims, it would have been deemed a revenue measure and its path through Congress would have been the path prescribed by the Origination Clause and the House and Senate rules.
The fact Congress did not treat IEEPA as a revenue measure is the dog that didn’t bark. Per Occam, the simplest explanation is to be preferred – IEEPA’s legislative path did not follow the rules governing Congress’ consideration of revenue measures because it didn’t contain one.
Framing of the Question Before the Supreme Court
Judge Taranto’s dissent in the CAFC’s decision suggested there was “no persuasive basis for thinking that Congress wanted to deny the President “use of the tariffing tool, a common regulatory tool, to address the threats covered by IEEPA.” Framing the question that way assumes the majority’s ruling would withhold power that was, by right, the President’s to exercise.
But, that reading inverts the logic of Articles I and II of the Constitution. Of all the powers granted Congress under the Constitution, none is more closely guarded than the power to tax. The power to tax, and its abuse by King George III, provided one of the principal justifications for the American colonies’ Declaration of Independence from Great Britain. In drafting the Constitution, the Framers ensured Congress, not the Executive, would control the taxing power.
Article I of the Constitution delegates the power to “lay and collect Taxes, Duties, Imposts, and Excises” and to “regulate Commerce with foreign Nations” unambiguously and exclusively to Congress. Article II of the Constitution makes no such delegation to the President. What it contains is an injunction to the President to ensure laws passed by Congress be “faithfully executed.”
Thus, the president has no power to impose tariffs but that which Congress expressly delegates. Any presidential imposition of taxes or tariffs must be supported by a clear and unequivocal delegation of power from Congress. Congress can – and does frequently – tailor the scope of such delegations to limit the scope of the President’s power.
Seen in that light, the President’s Article II obligation to ensure the laws be “faithfully executed” requires he fulfill Congress’ intent in making such delegation, rather than using Congress’ action as a pretext to aggrandize power beyond the delegation’s scope.
The inquiry before the Supreme Court, therefore, is not whether there is a “persuasive basis for thinking that Congress wanted to deny the President use of the tariffing tool . . . to address the threats covered by IEEPA,” but whether IEEPA affirmatively delegated that authority and whether the President’s use of IEEPA faithfully fulfills Congress’s intent.
The recently passed “One Big Beautiful Bill” underscores why the Court should treat with skepticism the President’s claim that IEEPA implicitly delegates the power to impose tariffs. As part of that legislation, Congress sought to punish certain foreign governments for imposing discriminatory levies on U.S. firms.
In a striking parallel to the facts at issue in V.O.S. Selections, the means Congress chose was a delegation of authority to the Secretary of Treasury to raise taxes on certain foreign source income in retaliation for the imposition of the discriminatory foreign taxes. The proposed section 899 was included in the Senate amendment to the House passed bill as well.
In short, Congress’ delegation of authority to use taxing power as an economic sanction was explicit, undercutting the idea Congress would have delegated the power to impose tariffs in IEEPA implicitly, rather than manifesting its intent explicitly in statutory language.
Conclusion
A plain reading of the IEEPA and its legislative history precludes the possibility that the statue authorizes the President’s imposition of tariffs. The path IEEPA took through Congress reinforces that conclusion.
A delegation of tariff authority constitutes a revenue measure within the meaning of the Origination Clause of Article I of the Constitution and the House and Senate rules governing consideration of such measures. Those rules prescribe a unique path for through Congress revenue measures – a path IEEPA did not follow.
The President’s appeal ultimately depends on the assertion Congress implicitly delegated the power to impose sweeping tariffs at whim. IEEPA’s legislative path proves otherwise.
To read the full article, please click here.