I was somewhat curious about what Trump’s team was telling the Supreme Court in arguing the tariff case that they are set to hear next month. After all, the Constitution pretty clearly gives the power to impose tariffs to Congress. It says this explicitly in the first paragraph in Article I, Section 8, which lays out the powers of Congress:

“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;”  

There could be some other way to read this, but it seems about as clear as it could be that imposing tariffs is a power of Congress, not the president. 

I included that last clause about the tariffs being uniform just because I was wondering how that affected Trump’s practice of making exceptions for his campaign contributors and Mar-a-Lago members. But I’m not a lawyer.

So, what do Trump’s lawyers argue? The gist of the brief is that our trade deficit posed a national emergency, with a touch of fentanyl on top, which overrides the Constitution giving Congress the power to impose tariffs, coupled with some past acts passed by Congress granting the president limited tariff authority.

“This case addresses the validity of the Administration’s most significant economic and foreign-policy initiative—the imposition of tariffs under the International Emergency Economic Powers Act (IEEPA), Pub.L. No. 95-223, Tit. II, 91 Stat. 1626 (50 U.S.C. 1701et seq.), which President Trump has determined are necessary to rectify America’s country-killing trade deficits and to stem the flood of fentanyl across our borders.  In January 2025, the United States faced “enormous, persistent annual U.S. goods trade deficits”—$1.2 trillion per year—that, the President perceived, “have hollowed out our domestic manufacturing and defense-industrial base and have resulted in a lack of advanced domestic manufacturing capacity, a defense-industrial base dependent on inputs from foreign adversaries,[and] vulnerable domestic supply chains.” C.A. Doc.158, at 6-7 (Aug. 29, 2025) (Lutnick).1 Those “catastrophic” deficits, id. at 5, arose from asymmetric tariffs and trade barriers that virtually all our major trading partners had imposed on the United States for decades. Gov’t Mot. to Expedite 2a (Bessent).2

The President and his most senior advisors recognized that those trade deficits had created “an ongoing economic emergency of historic proportions,” C.A. Doc.158, at 6 (Lutnick), and brought America to a “tipping point,” i.e., “the brink of a major economic and national-security catastrophe.” Gov’t Mot. to Expedite 2a (Bessent). 

There is a lot of juicy stuff here. As a non-lawyer I can’t comment on the legal merits of the argument, although I don’t think you are supposed to lie in a Supreme Court brief. Anyhow, I can speak to the economic issues raised.

The most important one is the issue of the “country-killing trade deficits.” While the brief tells us that Trump and his top advisors had determined that we faced an economic emergency of historic proportions, and we were reaching a “tipping point” [their quotation marks] of a “major economic and national-security catastrophe,” there is nothing in the world to support that claim.

At the time Trump took office the value of the dollar in international markets had been steady after rising considerably from 2021 to 2023. In fact, it was above its level when Trump left office in January of 2021. Interest rates on long-term US government bonds were above pandemic troughs, but low by historical standards. The economy was growing at a solid 2.5 percent rate and industrial production was stable at levels well above where they had been when Trump left office in 2021 and even above the pre-pandemic level. Where’s the crisis?

It gets worse. The trade deficit relative to GDP is considerably below the levels of two decades ago. In 2005 it peaked at 6.0 percent of GDP. It was 3.1 percent of GDP in 2024 and relatively stable. This was down from pandemic levels of over 4.0 percent. Again, where’s the crisis?    

It is also worth noting that Trump focuses exclusively on the goods trade deficit. This is somewhat larger at 4.0 percent of GDP, but still far below a peak of 6.7 percent of GDP in 2005. 

But it also raises an important conceptual issue. In Trumpland, if we were selling foreigners services — say, management and computer consulting — in order to pay for imports of toys and shoes, we would face a crisis. The management and computer consulting services don’t count in calculating the goods trade deficit, the toys and shoes do. That may make sense in Trumpland, but not in any economics I ever learned.

There is an argument about how we might need to maintain industrial capacity in key sectors as a national security issue. But that would make a case for selective measures to support the relevant industries, like what Biden did with the CHIPS Act and the Inflation Reduction Act, (both measures passed by Congress), not massive across the board tariffs initiated exclusively by the president.

We also have the fentanyl tossed in. That could be a basis for taking steps against some countries, like Mexico and China, but the president does have other tools. Also, the flow of fentanyl from Canada is trivial by all real-world accounts, even if not in Trumpian rhetoric.

I don’t think you are supposed to lie in a brief to the Supreme Court.  But I guess the Trump team’s out is that they don’t claim they are making true statements about the world, just telling us what Trump has “determined” or what he “perceived” or “recognized.” 

I’m not sure what the legal status of delusional views is supposed to be. If the president determines it is a national emergency because the Kansas City Chiefs lost the Super Bowl, can he then use this as a basis for imposing massive tariffs on Japan and Canada? I guess the court will tell us.

The brief goes through some history of presidential tariffs, which I won’t try to recount, but I will mention one instance. It notes the use of tariffs by Nixon to combat a balance of payments deficit, which he called a “national emergency” at the time.  

This is an interesting precedent for the Trump team to use. At the time, the United States had a fixed exchange rate, where it was obligated to redeem dollars that other countries had accumulated for gold. You know, the stuff that is supposed to be in Fort Knox. Anyhow, while the US has lots of gold, the supply is ultimately limited. 

That means that there could be an emergency resulting in a fixed exchange rate regime that is literally not possible in the current regime of floating exchange rates. If there are more dollars going abroad than investors want to hold, the value of the dollar declines to a level where they want to hold them. What’s the emergency? And as I noted earlier, the dollar had been stable prior to Trump’s tariff games. It has fallen sharply over the last seven months. 

The best part of the brief really comes at the end where Team Trump tells us the dire consequences of ending the tariffs. Concretely, they point to the $4 trillion that the tariffs are projected (counting interest) to reduce the budget deficit over the next decade. 

This is very interesting for two reasons. First, this is roughly the size of the increase in the projected deficit from Trump’s “One Big Beautiful Bill.” I have never been a deficit hawk, but I am a big fan of arithmetic and logic. If it is important to have $4 trillion from tariffs to reduce the deficit, then increasing it by $4 trillion was a really bad move. Presumably Trump didn’t think so, since he was calling and threatening members of Congress to get his bill passed.

The other reason is that it apparently very easy to raise $4 trillion in revenue over a decade. If we ever did face a situation where we desperately needed more revenue, say massively excessive demand in the economy, we now know that the government has a tool that does not even require Congressional action. Surely there would be a much better case for “emergency” tariffs if inflation is soaring out of control than when it is moderate and falling, as was the case when Trump took office.

Finally, we are told:

“The Treasury Secretary states that the tariffs ‘have been one of the country’s top foreign policy priorities for the last several months’ and that allowing the decision below to take effect ‘would lead to dangerous diplomatic embarrassment,….’”    

I suppose it would be embarrassing to Trump if the Supreme Court said that his foolish tariffs violated the Constitution, but what exactly is the legal status of the president’s embarrassment? If Trump decided to hand $100 billion of government funds to his campaign contributors, with no Congressional authorization, it would likely also be embarrassing to him for the Court to rule he had violated the Constitution. (I know, he probably has done this.) 

It seems the obvious answer here is that the president should have some clue as to his constitutional powers before putting something like tariffs at the center of his political agenda. But again, I am not a lawyer. I guess we will hear what the Supreme Court has to say soon enough. As we know, Chief Justice Roberts keeps telling us that it is the Court’s job to redefine the strike zone on every pitch.