Just one day after the U.S. Court of International Trade blocked President Donald Trump’s “unlawful” tariffs, a federal judge separately concluded that the White House cannot cite “emergency powers” to impose this kind of “tax” on the American public.
“Since the founding, the Constitution has vested the ‘power to lay and collect taxes, duties, imposts and excises’ with Congress. The president has no independent discretion to impose or alter tariffs,” U.S. District Judge Rudolph Contreras wrote in his 33-page opinion on Thursday.
Contreras’ decision to block the tariffs is limited to two family-owned toy companies in Illinois, Learning Resources and hand2mind, which design educational games that develop children’s physical and mental skills — and import their products from abroad. However, the order paves the way for similar and broader nationwide injunctions, because it declares that five of Trump’s executive orders are plainly “unlawful.”
“If Congress had intended to delegate to the President the power of taxing ordinary commerce from any country at any rate for virtually any reason, it would have had to say so,” he wrote, making clear that Trump’s tariffs were “ultra vires” — a Latin phrase that means “beyond his powers” as president.
Contreras’ ruling comes after the federal business court ruled on Wednesday that the law does not “confer such unbounded authority” on the president.
Taken together, the court rulings form a one-two punch that undermines Trump’s attempt to unilaterally impose steep tariffs on whatever country he chooses by pointing to the 1977 International Emergency Economic Powers Act.
That law allows the White House to “regulate a variety of economic transactions following a declaration of national emergency.” However, Contreras pointed out that “IEEPA does not use the words ‘tariffs’ or ‘duties,’ their synonyms, or any other similar terms like ‘customs,’ ‘taxes,’ or ‘imposts.’”
“The power to regulate is not the power to tax,” he wrote. “The Constitution treats the power to regulate and the power to impose tariffs separately because they are not substitutes.”
The latest ruling does more than call into question Trump’s tariffs. It also directly counters Trump’s claim that foreign countries will pay for the tariffs, instead of the cost being borne by American companies and taxpayers.
The toy case has drawn attention from conservative legal scholars and free market thinkers at the Federalist Society, who weighed in earlier this month to frame the legal question in a way that nearly ended up mirroring the judge’s decision, writing that “this dispute is not about the wisdom of tariffs or the politics of trade. It is about who holds the power to tax the American people.”
Trump’s erratic tariff strategy has raised costs on all kinds of imported goods and forced a sudden administrative burden on ill-prepared customs agents — only for them to repeatedly get pulled back with surprise announcements of delayed implementation.
Contreras cited that “instability and unpredictability” in his opinion too, noting how the president began by adding a 10% tariff on China on Feb. 1, only to raise it to 20% in March, then jack up tariffs across the board on so-called “Liberation Day” in April, which he tweaked days later with reciprocal tariffs of up to 84%. The judge said the volatile imposition of policy undercuts the very arguments being made in court by the Department of Justice that the toy companies’ harms were somehow speculative.
“How could plaintiffs possibly describe the exact costs they will face from paying tariffs that the president imposes, pauses, adjusts, and reimposes at will?” Contreras asked.
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Jose Pagliery is a reporter at NOTUS.