With Trump’s Tariffs at Stake, Supreme Court Enters an “Upside Down” World

Inside the room for a landmark decision in the making.

The lone protester outside the Supreme Court on Wednesday. (Photo by Gabe Fleisher)

On Wednesday, a government lawyer walked into the Supreme Court and asked for a massive expansion of executive power, in order to defend a policy reviled by Wall Street, which several justices equated to a massive tax hike on the American people.

Two other attorneys stood before the bench, preaching the principles of low taxes and limited government, citing conservative justices and a pair of legal doctrines long championed by the Federalist Society.

None of that was too out of the ordinary — except for the fact that the first lawyer was representing a Republican administration, and the two challengers were Democrats.

Sitting inside the court on Wednesday, as both sides litigated the president’s sweeping tariffs, served as a stark reminder of just how much Donald Trump has inverted our political world. A Republican promoting higher taxes. Democrats fighting to shrink the administrative state. Left was right, and right was left.

Oregon Attorney General Dan Rayfield, who led a group of Democratic-led states in challenging the tariffs, compared the experience to entering the alternate dimension in the Netflix show “Stranger Things.”

“We’re in the world of the Upside Down,” he told me.

Even Justice Samuel Alito noted the irony, poking at Neal Katyal — who was representing a group of small businesses challenging the tariffs — for his embrace of the nondelegation doctrine, a conservative legal theory that says it is unconstitutional for Congress to delegate certain powers to the executive. It was an unlikely stance for Katyal, who previously pushed to expand the administrative state as Barack Obama’s solicitor general.

“I wonder if you ever thought that your legacy as a constitutional advocate would be the man who revived the nondelegation argument?” Alito asked Katyal. “Heck yes,” the liberal lawyer replied. And then, in an even clearer distillation of the unexpected alliances at play, he launched into echoing a statement made by another of the court’s most conservative justices: “I think Justice Gorsuch nailed it on the head when saying…

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The context of Wednesday’s case, where these role reversals were on display, is well known, but I will repeat it anyway.

Donald Trump has loved tariffs since at least the 1980s, long before he entered politics: “The most beautiful word to me in the dictionary,” he has said. After returning for a second term as president earlier this year, he used a range of legal tools to hike the price of importing foreign products.

The most expansive of these was the International Emergency Economic Powers Act (IEEPA), a 1977 law which Trump said gave him the power to tariff any country, at any level, for any amount of time, as long as he declared a national emergency was in effect. Trump used IEEPA on “Liberation Day” to impose his sweeping “reciprocal” tariffs, the duties on every foreign country that upended global trade. He has also invoked the law to impose additional tariffs on Canada, Mexico, China, Brazil, and India. (Sectoral tariffs on products like steel and aluminum flow from other legal authorities.)

Coalitions of states and small businesses sued the president, arguing that IEEPA does not, in fact, provide the power to impose tariffs (much less unlimited tariffs). The U.S. Court of International Trade and then the U.S. Court of Appeals for the Federal Circuit sided against Trump, who then appealed to the Supreme Court.

Republicans since Ronald Reagan have championed free trade and scorned taxation, which is what made it striking to watch a GOP administration abandon both stances at the court on Wednesday, while Democrats — rarely averse to a tax increase and once the party of protectionism — pushed back. Not that Solicitor General Jon Sauer, representing Trump, agreed that tariffs (Cambridge Dictionary: “a tax on goods entering a country”) are akin to taxes. “A foreign-facing regulation of foreign commerce,” he preferred to call them.

But in addition to carrying major stakes for the direction of the American economy — and flipping the two parties on those grounds — Learning Resources, Inc. v. Trump, the case’s formal name, also presents a watershed moment for the separation of powers, with the justices deciding just how large they will allow the “imperial presidency” to grow. It is rare for a case to simultaneously carry such economic and constitutional importance.

Here, too, watching Wednesday’s arguments gave me political vertigo. We have become accustomed in this country to hearing Republicans cry for limited government, while Democrats read into laws and the Constitution all sorts of authorities with which to grow the power of the state.

A leading exponent of such expanded executive power was the Democrat Woodrow Wilson, a former political scientist who believed that the president — as the sole national representative of the American people — should be the most powerful figure in our political system, and that Congress should behave more like a parliament, falling in line behind the policy program of the executive.

Democrats like Franklin Roosevelt and Lyndon Johnson are also associated with this strong-government worldview. Republicans abhorred all three.

Enter Donald Trump, yet another president who believes that all observable government power should cohere in the executive branch, and that lawmakers should follow his lead or pay the consequences; after all, he was given a national mandate, he says, and they were not. “Donald Trump is probably the most Wilsonian president we’ve had since Woodrow Wilson,” the political theorist Yuval Levin told me in August, noting that the current president harbors a fundamentally “progressive approach to the Constitution.”

In both the economic and constitutional sense, then, Trump’s tariffs are as progressive as one could get. Democrats, meanwhile, are left championing free global markets and the idea that the president should back off in favor of the Congress, reading a statute literally and not expansively, a conservative argument if ever I’ve heard one.

It is hard to believe that it was only 15 years ago that the Republican Party was gripped by a movement — the Tea Party — that was premised on the idea of low taxes (down to its colonial-era name) and limited government, only to be replaced by a successor movement in Trumpism that has turned both ideas on their head. (The Tea Party’s inspiration was invoked on Wednesday, but not by Republicans. Seeking to make the point that certain economic powers can be constitutionally given to the president, but that taxation stands unique, Katyal pointed out: “There was no Boston Embargo Party, but there was certainly a Boston Tea Party.”)

As I sat in oral arguments on Wednesday, I wondered what Tea Party paragons like Gov. Ron DeSantis or Sen. Mike Lee — authors of Obama-era books like “Dreams From Our Founding Fathers,” and “Our Lost Constitution,” which called for power that had been placed in an overgrown executive to be returned to Congress — would make of the arguments their party was advancing now.

Then, I got lucky.

I happened to walk out of the court at the same time as Sen. Amy Klobuchar (D-MN), who attended the oral arguments. I asked her what she made of the inversions I’d been observing: “There was a lot of irony there,” she agreed.

At that exact moment, she called out “Mike!” and Lee himself came bounding over, having also watched the arguments. Sensing my opportunity, I asked him the same question. “These things are tricky,” he acknowledged, “but it’s not uncommon to have a conservative president” make a move like this in service of a “policy basis,” he insisted. “The policy doesn’t always track with what would normally be the constitutional calculus,” Lee shrugged.

Not exactly the answer you might expect from Lee, who not only counseled Trump against imposing tariffs in his first term, but also introduced bills during the Biden era that would have peeled back presidential emergency powers and subject presidential tariffs to a congressional vote. Then again, Lee — like most other Republicans in Congress — has largely kept his historic opposition to tariffs and to presidential power grabs to himself for the last ten months.

Sens. Mike Lee and Amy Klobuchar outside the Supreme Court on Wednesday. (Photo by Gabe Fleisher)

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The question on Wednesday was whether the Supreme Court — designed to be a rock of a stability amid the constant shifts of the wider political world — would follow the Republican Party down that path, shelving their past statements in deference to Trump’s love of tariffs (and of power).

One can never be sure from oral arguments, but it seemed as though the Republican-appointed justices might not prove as pliant as the senators who voted for them.

Trump’s tariffs under IEEPA face several layers of scrutiny, all of which were plumbed on Wednesday. Start with the law itself. IEEPA says that the president, in order to “deal with any unusual and extraordinary threat” that he declares as a national emergency…

…may, under such regulations as he may prescribe, by means of instructions, licenses, or otherwise … investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation[.]

First, in imposing tariffs on every country in the world, is Trump “deal[ing] with an “unusual and extraordinary threat”? “I mean, Spain, France?” Justice Amy Coney Barrett asked Sauer yesterday. “I mean, I could see it with some countries, but explain to me why as many countries needed to be subject to the reciprocal tariff policy as are.”

Second, do tariffs fall under “means of instructions, licenses, or otherwise”? “I think the question is what does ‘or otherwise’ do?” Justice Neil Gorsuch said.

Third, if tariffs are a proper “means” under the statute, are they also a proper action: does imposing a tariff count as “regulat[ing]…importation or exportation,” as the administration claims? “Can you point to any other place in the Code or any other time in history where that phrase together, ‘regulate importation,’ has been used to confer tariff-imposing authority?” Barrett asked. Sauer could only offer her IEEPA and its predecessor statute.

Fourth, if IEEPA was intended as a grant of tariff power by Congress to the president, is that constitutional? “Yes, of course, tariffs are dealing with foreign powers, but the vehicle is imposition of taxes on Americans, and that has always been the core power of Congress,” Chief Justice John Roberts pointed out.

Here, Trump may prove unlucky in two respects: first, because the conservative justices — even those that he appointed — come from the Before Times, having risen through the ranks of traditional conservative cliques like the Federalist Society. They are believers in limited government, even if the president who appointed them is not.

Second, because these exact justices have just spent the last four years deploying a finely honed set of methods against progressive claims of presidential power. The first two questions above implicate textualism: does the text really say what the executive branch says it does? The third question implicates the major questions doctrine: did Congress really say explicitly that it was handing such a major power over to the president? And the fourth invokes the nondelegation doctrine: if Congress did hand over such broad power, is that allowed?

Five of the six conservative justices (all except Alito, who seemed most favorable to the Trump administration’s claims) referenced the major questions doctrine in their questions Wednesday, which should be no surprise considering they are the ones who crafted it, and for the exact purpose of checking presidential power grabs.

The major questions doctrine was explicitly cited in a Supreme Court majority opinion for the first time in 2022, when Roberts led a 6-3 court — divided along ideological lines — in pushing back against the Biden administration’s regulation of carbon emissions. The chief justice returned to the doctrine the next year to reject Biden’s cancellation of student loan debt; again, the liberals dissented.

In both these cases, the justices had to parse vague texts to say whether they contained the vast powers Biden was reading into them; both times, they decided that if the statues were too vague, the tie should go to Congress. The presumption should be that lawmakers, not the president, should maintain these powers.

In a opinion she has said is her proudest, Justice Amy Coney Barrett concurred in the student loans case by writing:

Consider a parent who hires a babysitter to watch her young children over the weekend. As she walks out the door, the parent hands the babysitter her credit card and says: “Make sure the kids have fun.” Emboldened, the babysitter takes the kids on a road trip to an amusement park, where they spend two days on rollercoasters and one night in a hotel.

Was the babysitter’s trip consistent with the parent’s instruction? Maybe in a literal sense, because the instruction was open-ended. But was the trip consistent with a reasonable understanding of the parent’s instruction? Highly doubtful.

In the normal course, permission to spend money on fun authorizes a babysitter to take children to the local ice cream parlor or movie theater, not on a multiday excursion to an out-of-town amusement park. If a parent were willing to greenlight a trip that big, we would expect much more clarity than a general instruction to “make sure the kids have fun.”

Then, Biden’s $400 billion student loans program was the “multiday excursion to an out-of-town amusement park” read into a vague statute. Now it is Trump’s trillions-dollar tariffs. (Although Trump’s lawyer argued Wednesday that the purpose of the tariffs was not to raise revenue, in order to say they were not a tax, a claim that is belied by Trump’s frequent boasts about how much they are raising.)

Metaphors abound. The late Justice Antonin Scalia famously said that Congress does not “hide elephants in keyholes”: when it wants to do something, it makes itself clear. Here, the statue at hand, does not even mention the word “tariff,” as every other tariff statute does. To paraphrase the comedian John Mulaney, who also attended the Supreme Court arguments on Wednesday, one might view it as a case of elephants running loose in keyholes.

Unfortunately for Trump, his own appointees to the court are in Scalia’s mold, not the more expansive (and historically Democratic-associated) school of thought he’s urging on them.

Nobody typifies this split better than Neil Gorsuch, Trump’s first appointee to the bench. Gorsuch is the court’s quintessential libertarian, much like Lee and other Tea Party-era Republicans.

Gorsuch on Wednesday pressed Sauer on his “theory of the Constitution,” in a piercing line of questioning that poked holes in several of the solicitor general’s arguments. “What would prohibit Congress from just abdicating all responsibility to regulate foreign commerce or, for that matter, declare war, to the president?” Gorsuch asked, seeing how much of the legislature’s power Sauer believed could be forked over to the president. (Sauer eventually admitted that there was a line at which Congress could no longer delegate its powers. After Gorsuch pointed out he had “backed of” from his initial position, Sauer said: “Maybe that’s fair to say.”)

“Could the President impose a 50 percent tariff on gas-powered cars and auto parts to deal with the unusual and extraordinary threat from abroad of climate change?” Gorsuch added. (Sauer admitted it could be done, not exactly an argument that will help him win over the conservative justices.)

“Does the president have inherent authority over tariffs in peacetime?” (Part of Sauer’s argument relied on the idea that the president has inherent Article II powers over foreign affairs. But Gorsuch got him to acknowledge that this doesn’t carry into peacetime.)

“You emphasize that Congress can always take back its powers,” Gorsuch said. “You mentioned that a couple of times. But don’t we have a serious retrieval problem here because, once Congress delegates by a bare majority and the President signs it — and, of course, every president will sign a law that gives him more authority — Congress can’t take that back without a [veto-proof] supermajority?” (Sauer didn’t really answer, leaving Gorsuch to declare that this would create “a one-way ratchet toward the gradual but continual accretion of power in the executive branch and away from the people’s elected representatives.”)

And, above all — like any true libertarian, dating back to our government’s founding, like Republicans once advocated and Democrats once bristled at — Gorsuch kept returning to the idea that, of all the powers that should be held up for special scrutiny, taxation should be scrutinized the most.

“The power to reach into the pockets of the American people is just different and it’s been different since the Foundation and the Navigation Acts that were part of the spark of the American Revolution, where Parliament asserted the power to tax to regulate commerce… And Americans thought even Parliament couldn’t do that, that that had to be done locally through our elected representatives,” Gorsuch pointed out.

That comment was intended as a question to Ben Gutman, the lawyer represented the Democratic states challenging the tariffs. Gutman’s answer was concise: “I think it’s a huge piece of what’s animating our argument. Thank you.”

The tariff case has split apart the Republican legal world for a reason, because it speaks to so many of the principles that conservative attorneys have advocated for decades — only for Trump to trample all over them. (Not coincidentally, Trump has split with the conservative legal world at the same time, renouncing the Federalist Society that left him with justices who are throwbacks to a previous Republican era.)

“I’m a former Republican,” Arizona Attorney General Kris Mayes, who joined the state-led suit agains the tariffs, told me Wednesday. “It is insane and bizarre that we have a president of the United States right now engaged in an almost 18% national sales tax that violates the Constitution and violates federal law. So this is not the Republican Party that I used to belong to, at all, ever. It is not something that Republicans used to believe in, but they are now allowing it to happen out of the White House and saying nothing about it.”

Democratic attorneys general outside the Supreme Court on Wednesday. (Photo by Gabe Fleisher)

And the case has exposed the shifts in Democratic circles as well, with liberal justices and attorneys who once mocked the major questions doctrine — and argued that Congress can freely delegate power to the White House — invoking both ideas on Wednesday. (“I can’t speak to how prior AGs have applied major questions,” Oregon’s Rayfield told me, when I asked about the fact that Democratic attorneys general had pushed back against the doctrine in the Biden era.)

Conservatives may see that as hypocritical, but it’s also the price of victory: once your precedents are won, then you have to apply them equally.

With the tariff case, the Supreme Court stands at a crossroads between partisanship and principles, either applying the limits on executive power they articulated during the Biden era, or — like so many in the House and Senate — shelving them with a Republican in the White House.

The justices’ questioning on Wednesday suggests that terms lasting a lifetime, instead of two or six years, might make one a tad more likely to stand by their principles (if for no other reason than it allows you to apply them again when the tides have shifted: see Gorsuch’s question on a climate emergency.) For the conservative justices, it also offers a golden opportunity: to get the liberal justices on board, at last, with major questions doctrine — a cross-ideological statement affirming Congress’ primacy over the president, even if Congress currently shows no interest in using the power the court is trying to give them.

Undoubtedly, outside the marble confines of the Supreme Court, the two parties will flip and flop on these questions once again. But the tariff case could result in a lasting precedent, endorsed by members of both ideological wings, that trims the sails of the executive, no matter which party is in office. It might end in one small step towards turning our “Upside Down” world more permanently right side up.