The fate of Trump's trade war depends on the "key decision" of the US Supreme Court.

date
01/06/2025
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GMT Eight
The Supreme Court of the United States is about to make a ruling on the Trump administration's $1.4 trillion global tariff case.
The "Major Questions Doctrine," established by the U.S. Supreme Court during the Biden era, is now threatening the Trump administration's global tariff plan. This doctrine was initially used by conservative judges to overturn two of the Biden administration's signature policies: the Environmental Protection Agency's emissions reduction plan for power plants, and the Department of Education's $400 billion student loan forgiveness program. The Supreme Court ruled at that time that administrative agencies cannot adopt policies that have a significant impact on the national economy without explicit authorization from Congress. Recently, the U.S. Court of International Trade also cited this doctrine in ruling that the Trump administration's tariff policy exceeded its authority. According to the non-partisan organization Tax Foundation, the estimated tax revenue from Trump's tariffs over the next decade amounts to $1.4 trillion, far exceeding the $400 billion scale of Biden's student loan forgiveness program. The ruling, with a unanimous 3-0 decision, pointed out that the Trump administration's tariff actions constitute major economic policies that were not authorized by Congress. George Mason University's Antonin Scalia Law School professor Ilya Somin stated, "If this doesn't qualify as a major issue, I can't imagine what would. This is the largest trade war since the Great Depression." According to CCTV News, Trump's global tariff policy began with a series of actions on April 2nd. This is the largest tariff adjustment since the infamous Smoot-Hawley Tariff Act of 1930, directly raising the average applied tariff in the U.S. to the highest level in a century. This measure has caused turmoil in the global financial markets, sparking concerns about a possible recession in the U.S. and global economy. Chief Justice John Roberts of the Supreme Court emphasized the "stunning" economic impact of such large-scale actions when rejecting Biden's student loan forgiveness program. Now, this standard of judgment is likely to apply to Trump's tariff case, and the Supreme Court may need to make a similar value judgment. Presidential Exceptions? The legal basis for Trump's tariff policy this time is the 1977 International Emergency Economic Powers Act (IEEPA). The law is ambiguous, authorizing the president to "regulate" the import of goods in emergency situations, but does not explicitly authorize the president to impose large-scale tariffs. The Court of International Trade believes that this vague wording is insufficient to support the president in bypassing the tax authority explicitly granted to Congress by the Constitution and implementing such a large-scale tariff policy. However, the U.S. Department of Justice defended the Trump administration by pointing out that the "Major Questions Doctrine" does not apply to the president receiving direct authorization from Congress and should specifically target administrative agencies. In addition, the Department of Justice emphasized that the president has always had broad discretion in the areas of national security and foreign affairs, which should also exclude the application of the "Major Questions Doctrine." The legal and ideological differences in this tariff dispute have also spread to the Supreme Court. Although six conservative judges unanimously applied the "Major Questions Doctrine" to overturn Biden's measures, there are subtle differences within their application of this doctrine. Justice Amy Coney Barrett sees it as a tool for interpreting legal texts, while Neil Gorsuch emphasizes that the principle is used to maintain the balance of constitutional powers between Congress and the President. Ronald Levin, a professor of administrative law at Washington University in St. Louis, stated that the Supreme Court has not yet provided clear standards for when and how to apply the "Major Questions Doctrine." He said, "The court has always kept all options open and has not provided transparent standards for application." For the conservative justices of the Supreme Court, the Trump tariff case is clearly a significant "pressure test": whether they will apply the same standard to a Republican president they support, or recognize the president's special position in national security and refuse to reapply this doctrine? The ruling will draw a "power red line" The upcoming ruling of the U.S. Supreme Court will not only determine the fate of Trump's global tariff policy but may also become a landmark case that defines the boundaries of future presidential powers. If the high court continues its strict attitude in previous cases involving the Biden administration, insisting on clear authorization from Congress to implement economically significant measures, then Trump's tariff plan is likely to be overturned. This would mean that the president's tax authority is subject to such clear judicial limitations for the first time in history. On the other hand, if the court accepts the Trump administration's arguments regarding national security and the president's direct authorization, allowing tariffs to continue to be implemented, the ruling may further expand the president's emergency powers in the economic field and establish new boundaries of power. This also means that the international market will continue to face trade war risks, and global economic uncertainty may persist.