The Trump administration unveiled a package on April 2, 2025, to dramatically increase tariffs placed on other countries in what it called “Liberation Day.” Both economists and policymakers have continued to weigh in on the impact of tariffs.
But what’s less discussed is which branch of government has the authority to impose tariffs — whether the authority belongs to the president (executive) or the Senate (legislative). Now, legal challenges are underway, and the case will likely go all the way to the Supreme Court.
Matthew Leffler, an adjunct professor at the Michigan State University College of Law, is an expert on tariffs and, here, he provides a history and constitutional overview of imposing tariffs.
What is a tariff and what background should people know?
A tariff is a tax on imported or exported goods, used to protect domestic industries or generate revenue. Understanding their economic impact, like higher consumer prices and potential trade wars, is key.
What is the history of the U.S. levying tariffs and why are they typically used?
The U.S. has used tariffs since 1789 for revenue and industry protection, with peaks like the 1930 Smoot-Hawley Act; they’re typically applied to shield domestic markets or address trade imbalances. Recent tariffs under presidents Trump and Biden focus on national security and countering unfair trade practices.
What information is most lacking regarding this issue?
The issue being missed is not the broader economic ripple effects, like increased consumer costs and supply chain disruptions, but the separation of powers contained in the U.S. Constitution. Political rhetoric tends to oversimplify tariffs as purely protective without addressing their constitutional complexity.
What does IEEPA do and why is there constitutional conflict?
The International Emergency Economic Powers Act, or IEEPA, is a U.S. law that allows the president to impose economic sanctions, including tariffs, during declared national emergencies to address foreign threats. It grants broad executive authority over trade and financial transactions, often sparking debate over its scope and constitutionality. Constitutional conflict arises because Congress delegated this authority, potentially undermining its legislative control over trade.
What do the current legal disputes and challenges mean?
The current legal dispute involves a challenge to President Trump’s use of IEEPA to impose tariffs, which the plaintiffs and 33 U.S. senators argue exceeds his authority, as IEEPA does not explicitly grant tariff power. The U.S. Court of International Trade ruled that IEEPA does not authorize these tariffs, prompting an appeal and a motion for a stay, which the senators oppose, citing harm to businesses and a violation of Congress’s constitutional authority over trade.
What else should people know about this situation?
This case highlights the friction between the legislative and executive branches. The hearing on this case is set before the United States Court of Appeals for the Federal Circuit on July 31, 2025.
Regardless of the outcome, this case is likely to be heard before the Supreme Court of the United States. What’s more, tariffs can escalate into trade wars, harming global economic stability. Public discourse often ignores how tariffs disproportionately affect lower-income consumers through higher prices.