The legal war over President Trump’s tariffs is far from finished.
A little more than a year after Mr. Trump rolled out an initial slate of punishing yet illegal duties, his administration is set to return to court on Friday to defend the new 10 percent tax that the president has imposed on most imports.
Mr. Trump announced the wide-ranging tariffs in late February, hours after the Supreme Court struck down the original, country-by-country rates that had served as the bedrock of his global trade war. To apply the new duties, he turned to a little-known provision of a roughly half-century-old federal law, which no president before him had ever actually used.
The result has been a familiar legal drama that may once again shape, if not curtail, Mr. Trump’s tariff powers. The president and his aides have insisted that their actions are legal, as they double down on a strategy that increasingly appears to be raising prices for U.S. consumers and businesses. But state leaders and small businesses have claimed Mr. Trump overstepped, arguing in two lawsuits that the president wrongly bypassed Congress.
The final say belongs to a panel of judges on the Court of International Trade, the same specialized circuit that handed Mr. Trump the first in a series of defeats that would upend his initial roster of tariffs. But the administration has projected a sense of optimism that its updated approach is legally sound, as it seeks to avert another recalibration of its trade strategy.
Ahead of the hearing on Friday, Timothy C. Brightbill, a trade lawyer for the Washington law firm Wiley Rein, said he expected the court to be “skeptical of President Trump’s ability to impose broad tariffs,” including his global 10 percent rate.
But Mr. Brightbill also acknowledged that it could be months before the legal system can render a full verdict on Mr. Trump’s policies, all while the administration works to formalize a set of replacement rates due later this year.
“By then,” Mr. Brightbill said, “there will most likely be a new tariff regime in place.”
In a statement, Kush Desai, a spokesman for the White House, said the president was “lawfully using the executive powers granted to him” and the administration was “committed to robustly defending the legality of the president’s actions in court.”
No matter the outcome, the legal wrangling on Friday still served to affirm the stakes of Mr. Trump’s continued trade brinkmanship at a fragile moment for the global economy. Tariffs are taxes on imported goods, meaning U.S. consumers and businesses tend to foot much of the bill, adding to their financial strains at a moment when prices remain high amid the war with Iran.
In the first phase of his trade war, Mr. Trump targeted nearly every U.S. trading partner with steep and ever-shifting duties, relying on a decades-old economic emergency law that did not include tariffs among its powers. No president before Mr. Trump had ever taken such an approach, a factor that sparked multiple legal challenges and ultimately prompted the Supreme Court to rule, 6 to 3, against the president.
The ruling in February set off a swift chain reaction, including a push by businesses to recoup the roughly $166 billion the government had collected in illegal duties. It also set off a scramble at the White House to find other ways to forge ahead with its trade agenda.
Mr. Trump imposed his new tariffs under Section 122 of the Trade Act of 1974, a provision allowing the president to apply a tax up to 15 percent for 150 days. Those duties are subject to strict limits: The president may tax imports only temporarily, as a way of dealing with “large and serious United States balance-of-payments deficits” or other situations that present “fundamental international payments problems.”
The two concepts reflect a bygone era, when the U.S. dollar had been pegged to gold, creating unique economic risks that do not exist today. That has set the stage for the fundamental question set to reach federal judges on Friday: Does Mr. Trump actually meet the requirements of the law to impose his tariffs?
In the February directive that put those tariffs in place, the White House primarily pointed to the nation’s trade deficit, a different measurement, which tracks the gap between U.S. exports and imports. That, the president had reasoned, could “endanger the ability of the United States to finance its spending, erode investor confidence in the economy and distress the financial markets.”
But small businesses and states argued that Mr. Trump had wrongly cited the trade deficit to justify the tariffs. They claimed in a series of separate legal filings that the gap is not the same thing as a “balance of payments” problem. They also pointed to the government’s past statements, some of which suggested that even the Trump administration did not always believe it could invoke Section 122 in response to the trade deficit.
One of the lawsuits, led by Dan Rayfield, the Democratic attorney general of Oregon, accused Mr. Trump of “an exercise of completely unrestrained executive power.” Oregon had been among the states that successfully sued the president over his earlier tariffs. The other plaintiffs are represented by Liberty Justice Center, which prevailed in those arguments, too.
In rebuttals filed ahead of the hearing, lawyers at the Justice Department contested each of those claims. They said the issue at the heart of the case — whether the United States does indeed have a payments problem — is a matter left to the president’s “discretion” and one that judges could not review.
“For over a century, Congress has supplemented the president’s constitutional power over foreign affairs and national security by delegating to him the authority to manage foreign trade in response to international conditions, including by imposing tariffs,” the Trump administration said in April.
While the court is unlikely to rule on Friday, the judges could offer an early sense of their thinking. If Mr. Trump loses, his administration may have to repay the money it has collected. Unlike before, however, the White House has already started work on its replacement duties, no matter what happens with Section 122.
From the beginning, Mr. Trump had envisioned the across-the-board tariff as a way to buy time for the administration to conduct investigations into countries’ trade practices. It launched those inquiries using another provision of the same 1974 law, known as Section 301, which allows the president to impose tariffs if the government determines another nation is behaving unfairly.
Stan Veuger, a senior fellow in economic policy studies at the conservative-leaning American Enterprise Institute, said that the tariffs under Section 301 and other authorities are “much harder to impose so broadly and so quickly.” But, he added, there is also a “long record of the administration using them” — meaning they could be less legally vulnerable.
Mr. Veuger recently joined dozens of experts in filing a brief with the trade court that sided with suing states and small businesses. He said of Mr. Trump’s strategy, “They are simply trying to have access to as broad a set of legal tools as they can.”
Tony Romm is a reporter covering economic policy and the Trump administration for The Times, based in Washington.
The post Trump Administration Returns to Court for Yet Another Tariff Lawsuit appeared first on New York Times.
