Recent Supreme Court Decision Could Block Trump Tariff Plan

Donald Trump has been threatening both Mexico and Canada with tariffs if the countries do not do their part to halt the flow of migrants over our border.  

A recent Supreme Court decision may block from being able to put those tariffs in place, but Congress could bail him out. 

The Chevron Deference 

In June, the Supreme Court overturned a long-standing precedent called the Chevron deference.  

When the Supreme Court released its ruling, it was considered a staggering blow to the power of federal agencies to interpret ambiguous laws when it came to applying regulations.  

The decision came down along ideological lines, and at the time, it was stated by many legal experts that the impacts of that decision would be felt over many years, but little did they realize it would come into play as soon as Trump takes over the White House.  

This ruling could wind up blocking Trump’s tariff plan if it is challenged in court, which would mean that the tariffs would then have to be put in place by Congress, which the GOP now controls.  

The Threat 

Trump poked the bear last week when he announced his tariff plan to help address the border crisis.  

Trump stated, "On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders.” 

Since that statement, Trump had a phone call with Mexico’s president and Canada’s Prime Minister flew down to Florida to meet with Donald Trump, so they may have already come to an agreement to avoid this.  

However, Trump is now threatening BRICS countries for threatening to pull away from the US dollar as the standard, writing, "The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER.” BRICS countries are China, Russia, Brazil, India, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates. 

Needs Congress 

For most of the last century, Congress has ceded its powers to the president in terms of regulating foreign commerce, but the overturning of the Chevron deference shows that the Supreme Court would likely rule in favor of a plaintiff if they challenged the office on being able to place tariffs against a country as Trump says he will do.  

This change came about via the Reciprocal Trade Agreements Act, which was passed in 1934.  

In 1962, more legislation was passed, the Trade Expansion Act, giving the president the authority to change tariffs if certain imports were deemed to be a national security threat. More power was ceded to the executive branch in 1974 with the passing of the Trade Act of 1974, which extended some regulatory powers to cabinet members.  

So, if the Supreme Court decides too much of congressional power on these fronts has been ceded, we could find ourselves in a position where Trump would have to rely on Congress to impose the tariffs. Now, there are a lot of moving parts to this and with the GOP in charge of Congress, if Trump is challenged and the court does dial back his powers, I would still expect Trump to get his way.