Tag: taxes

“Yoshida at first glance appeared to be quite helpful to the Trump administration.
The court concluded that the tariff was legally justified under the TWEA to address the trade imbalance and pointed to language in the statute that authorized the president to “regulate” the “importation” of foreign goods in the event of an emergency. That language was carried over into IEEPA as part of a much longer list of actions permitted by the president, though that list does not explicitly mention either tariffs or taxes (a point to which we will return).

In light of the parallel statutory language in TWEA and IEEPA, the Justice Department argued that Yoshida “continues to control today” and requires the Court of International Trade to rule in favor of the Trump administration.

As Wednesday’s decision makes clear, it was not so simple.

In several crucial respects, the Yoshida decision cut sharply against the administration’s position. That put the Justice Department in the awkward — and generally unenviable — position of having to pick and choose which parts of the decision that it likes, and which parts of the decision the courts should ignore.

For starters, the Yoshida decision rejected a key proposition that is at the heart of the government’s defense of Trump’s tariffs — the notion that courts have no power to review a president’s actions under IEEPA.

The court ruled in Yoshida that each presidential action under the statute “must be evaluated on its own facts and circumstances.” The court went on to emphasize that its ruling, while favorable to the Nixon administration, was not a blanket approval of “any future surcharge of a different nature, or any surcharge differently applied or any surcharge not reasonably related to the emergency declared;” that the president’s actions under the statute “must also bear a reasonable relation to the particular emergency confronted;” and that “emergencies are expected to be shortlived.”

In other words, the facts matter. But the facts then under Nixon — and the facts now under Trump — are markedly different.

Nixon’s tariff was fixed at 10 percent and in place for less than five months. Trump’s tariff framework is far more ambitious, open-ended and has been all over the place since his inauguration — with the effective dates and applicable countries, rates, exceptions and concessions under seemingly constant revision.

And if Trump and some of his advisors are to be believed, there would be no end in sight. “If President Trump succeeds like he wants to succeed,” Trump’s trade adviser Peter Navarro said earlier this year, “we are going to structurally shift the American economy from one over-reliant on income taxes and the Internal Revenue Service, to one which is also reliant on tariff revenue and the External Revenue Service.” That is a far cry from a five-month, supplemental 10 percent tariff like what Nixon imposed.

Two other, subtler points in the Yoshida decision made things worse for the administration.

First, Nixon’s tariff did not apply to all imports — only those that had been the subject of prior concessions under the government’s tariff schedule — and Nixon made clear in announcing the policy that the rates would nevertheless be capped at levels that Congress had previously set for the relevant goods. As a result, the court concluded in Yoshida that “the congressionally established rates remained untouched” and that Nixon was not claiming the power to simply impose “whatever tariff rates he deems desirable.”

Trump made no such concessions, which made it a relatively straightforward matter for the court on Wednesday to contrast Nixon’s “limited” tariffs with those imposed by Trump. Indeed, given the administration’s position that the courts cannot review Trump’s emergency declarations in support of the tariffs or circumscribe his authority to issue tariffs under IEEPA, he has effectively claimed the power not just to issue “whatever tariff rates he deems desirable” but to impose those tariffs whenever he wants, for any reason that he wants and for however long he wants.

Second, as a footnote in the Yoshida decision notes, Congress later enacted a specific statutory provision to address the problem that attracted the Nixon administration’s attention. That provision authorizes the president to impose tariffs in response to “large and serious … balance-of-payments deficits,” but it caps those tariffs at 15 percent and limits them to a duration of just 150 days unless Congress authorizes an extension.

Needless to say, the Trump administration did not invoke that statute, and Justice Department lawyers sought to downplay its significance given the fact that Congress kept the statutory language at issue in Yoshida on the books in IEEPA.

This argument also did not move the three judges on the Court of International Trade. They concluded that the existence of the statute demonstrated that “even ‘large and serious United States balance-of-payments deficits’ do not necessitate the use of emergency powers” and that they “justify only the President’s imposition of limited remedies subject to enumerated procedural constraints.”

The argument was rooted in the conclusion in Yoshida that if a president wanted to impose a similar tariff in the future, he must “comply with the statute now governing such action.”

Trump, of course, had no interest in doing that.

There is no way to definitively predict how the appellate court — and eventually the Supreme Court”

https://www.politico.com/news/magazine/2025/05/29/trump-tariffs-court-defeat-00374194