The Supreme Court dealt a major blow Friday to President Donald Trump’s sweeping tariff plan — and notched a major victory for believers in checks and balances, according to Duquesne University President Ken Gormley.
Gormley, a law professor and nationally recognized constitutional scholar, took the 6-3 decision as a clear sign the majority conservative court won’t let Trump seize whatever powers he sees fit, despite recent rulings empowering the executive branch.
“It reestablishes that this court is not just going to crumble under the pressure of President Trump and his administration,” Gormley told TribLive just hours after the court issued its opinion. “If the Supreme Court didn’t do this and hold the line, it would lose so much credibility.”
The case, brought by an Illinois toy company that uses Chinese suppliers, could join the canon of landmark Supreme Court decisions, Gormley said.
Justices ruled Trump did not have the power to set import taxes via the International Emergency Economic Powers Act, which he invoked in April to institute broad reciprocal tariffs.
The president also used the act to place tariffs on Canada, Mexico and China for failing to stop the cross-border flow of fentanyl.
Chief Justice John Roberts wrote the majority opinion, joined by the court’s liberal wing and two Trump appointees, Justices Neil Gorsuch and Amy Coney Barrett. Dissenting were Justices Samuel Alito, Clarence Thomas and Brett Kavanaugh, also named to the bench by Trump.
Businesses large and small are gearing up to battle for tens of billions of dollars in potential refunds.
Jeanne Starmack, co-owner of Cat in the Bag Co. near New Castle, said she’ll definitely pursue refunds on the 50% tariffs she paid to have her soft-shell cat carriers imported from India.
“One way or another, I’m going to apply to get these refunds back,” she said. “If I have to use a lawyer, I will. I’m out about $60,000 to $70,000 for these tariffs, which may not sound like a lot to some businesses, but to small businesses, it can be devastating.”
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• Supreme Court strikes down Trump’s sweeping tariffs, upending central plank of economic agenda
Fleeting impact?
The economic impact of the high court’s ruling could be fleeting.
In a news conference early Friday afternoon, Trump said he’s tapping Section 122 of the Trade Act of 1974 to set a 10% global tariff. Unlike the tariffs that were declared unconstitutional Friday, this 10% import tax has a time limit: 150 days.
Trump also announced plans to use Section 301 of that same law to impose duties on countries found to be engaging in unfair trade practices, a power he’s repeatedly leaned on during his two terms in office.
Trump’s use of the International Emergency Economic Powers Act got at the heart of Congress’ authority, Gormley explained. The first article of the Constitution empowers federal lawmakers to set taxes, duties and other levies.
That authority can be extended to the executive branch by an act of Congress.
As such, tariffs on steel, aluminum and other industrial inputs established by Trump under the Trade Expansion Act of 1962 have held up. This law allows the president to restrict imports for national security reasons.
The International Emergency Economic Powers Act, however, makes no mention of tariffs or duties, the Supreme Court wrote in its opinion. The president’s interpretation gave him wide latitude to set tariffs, then go and negotiate those rates to extract concessions from allies and adversaries alike.
But as Gormley put it, referencing Trump’s best-selling business advice book: “The Constitution was not built on the art of the deal.”
More durable trade policy will likely have to come from Congress.
In a statement, U.S. Rep. Mike Kelly, R-Butler, said he’ll use his influence as chairman of the House Ways and Means Subcommittee on Tax to craft “common sense” trade deals that help American companies dominate the global economy.
‘Administrative nightmare’
The 170-page document released by the Supreme Court on Friday also includes dissenting opinions from Thomas and Kavanaugh.
In his lengthy opinion, Kavanaugh notes the U.S. may be required to provide billions of dollars in refunds to importers.
The court offered no guidance on how to go about those refunds, which could exceed $175 billion, according to economists at the University of Pennsylvania.
That was the right move, in Gormley’s view.
“It is not the job of the Supreme Court to save presidents from messes of their own making,” he said. “It may actually cause the president and the current administration to think twice about overreach in future things and bring a measure of restraint in some of the actions that they’re taking now.”
Major corporations have sought legal counsel in anticipation of filing lawsuits to secure these payouts, according to Ryan Young, a senior economist at the Competitive Enterprise Institute in Washington, D.C.
Smaller firms may not have the resources to navigate the legal morass, Young noted. And even if going to court isn’t necessary, collecting the information to request refunds may be challenging.
“It’s going to be an administrative nightmare,” he said.
Susanne Cook, a shareholder and international trade lawyer at Dentons Cohen and Grigsby in Downtown Pittsburgh, urged business leaders to immediately review their records related to the invalidated tariffs and seek legal counsel.
