Capitol News

The Trump administration announced a significant increase in tariffs on April 2, 2025, an event referred to as “Liberation Day.” This move has sparked ongoing discussions among economists and policymakers about the effects of tariffs. However, there is less focus on which branch of government holds the authority to impose these tariffs—the executive branch led by the president or the legislative branch represented by the Senate. Legal challenges have emerged and are expected to reach the Supreme Court.

Matthew Leffler, an adjunct professor at Michigan State University College of Law and a tariff expert, provides insights into this issue. He explains that a tariff is a tax on imported or exported goods aimed at protecting domestic industries or generating revenue. Understanding their economic impact, such as higher consumer prices and potential trade wars, is crucial.

Leffler notes that since 1789, the U.S. has used tariffs for revenue and industry protection with notable peaks like the 1930 Smoot-Hawley Act. Recent tariffs under Presidents Trump and Biden have focused on national security and countering unfair trade practices.

According to Leffler, what is often overlooked is not just the broader economic impacts but also the constitutional separation of powers concerning tariff imposition. Political rhetoric tends to oversimplify tariffs without addressing their constitutional complexities.

The International Emergency Economic Powers Act (IEEPA) allows the president to impose economic sanctions during declared national emergencies. This includes imposing tariffs to address foreign threats but often leads to debates over its scope and constitutionality due to Congress delegating this authority.

Current legal disputes challenge President Trump's use of IEEPA for imposing tariffs. Plaintiffs and 33 U.S. senators argue that it exceeds his authority since IEEPA does not explicitly grant tariff power. The U.S. Court of International Trade ruled against these tariffs under IEEPA, leading to an appeal opposed by senators who cite harm to businesses and violation of Congress’s constitutional trade authority.

This case underscores tensions between legislative and executive branches with a hearing set before the United States Court of Appeals for the Federal Circuit on July 31, 2025. Regardless of its outcome there, it may proceed to the Supreme Court. Tariffs can escalate into trade wars affecting global economic stability while disproportionately impacting lower-income consumers through increased prices.