Planet Money - Are Trump's tariffs legal?

Episode Date: June 11, 2025

When President Trump announced his sweeping new tariffs this year, many trade law experts were startled. Typically, presidents don't have the authority to impose broad tariffs with a snap of their fingers.But Trump's advisors have an unusual new legal theory. They say that as long as there's a national emergency of some kind, Trump may be able to create whatever tariffs he wants. This is a creative interpretation of a 1977 law called the International Emergency Economic Powers Act, or IEEPA. To justify his latest tariffs, the president declared national emergencies involving illegal immigration, the fentanyl crisis, and the trade deficit.But no president has ever tried to use the law in this way. Now, the fate of Trump's tariffs — and the creative legal theory behind them — lies with the courts. About a dozen lawsuits have challenged his tariffs, claiming that they are unlawful and possibly even unconstitutional. And some judges have started to agree.On today's show: What are the President's powers when it comes to tariffs? Where do they come from? What are their limits? And, what will be the fate of Trump's tariffs?For more on Trump's tariffs: - The 145% tariff already did its damage - Do trade deficits matter? - What "Made in China" actually meansFind more Planet Money: Facebook / Instagram / TikTok / Our weekly Newsletter.Help support Planet Money and hear our bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

This is Planet Money from NPR. Susan Weber has spent her whole life in Montana, and she loves everything about it. The mountains, prairies, the plains. The smell. You can smell the air. You can smell the flowers. The wildlife. Occasionally a little fox will run across the road. Susan grew up here on the Blackfeet Indian Reservation.

She's a member of the Blackfeet Nation. From her back porch, she's got the Rocky Mountains to the west and the Great Plains to the east. And to the north is Canada. The border is a short drive away. Well, it's just a imaginary line, right? Can't even see it? No,? Can't even see it? No, you don't even see it.

And for most of her life, that line really did feel imaginary. The members of Susan's tribe are part of the Blackfoot Confederacy, and they live on both sides of the border. So Susan and her tribe members, they cross into Canada all the time. Canada is where their cousins live, where they buy their lumber, where they sell their wheat and their grain. When they drive across the border,

they just show their tribal ID. They don't even need a passport. And then in March, that imaginary line started to feel like a barrier. That's when President Donald Trump basically started a trade war with Canada, put a 25% tariff on lots of Canadian goods coming into the U.S. Now, Susan is a state senator, and soon she started hearing stories

from people in her community about how the tariffs and the trade war were hurting them. A campground that relied on Canadian tourists was suddenly a lot emptier. A farmer who sold grain to Canada saw orders disappear. And she heard a story about a rancher whose tractor wheel broke down. The rancher went across the border to buy a part, but when he came back, the border guard said he had to pay the new tariff.

It was an additional 300-some dollars. My community people live on the margins. Are you gonna be able to pay your light bill this week? Are you going to be able to put gas in your car? Just that little subtle change, that few dollars, could mean that you go hungry for the day. Many of her neighbors, people she represents, many of them told her these tariffs felt wrong. My people were calling me, Susan, what can we do? Oh, this is happening.

Being who I am, I got on it. Susan starts thinking, these tariffs are huge and disruptive. She's like, can the president do this? Is there any way to challenge these tariffs? She starts talking with a local lawyer, and they look closely at how the president is creating these tariffs. And they realize they might have a case here

because of what's in the Constitution. Hey, there it was right in front of my face, in front of everybody, every American's face right there. Susan and her lawyer, they start to build this argument that the president's tariffs are illegal, maybe even unconstitutional. The way Susan sees it, the president has overstepped his power. So Susan and her lawyer compile a list, collect receipts, document lost revenue. They write up a bunch of examples of how the tariffs harmed the people of the Blackfeet Nation. And they sue the federal government.

And so that's the beginnings of Weber versus the United States. Weber, as in Susan Weber, versus the United States and the Department of Homeland Security. On April 4th, Susan became one of the first people to sue the Trump administration and challenge the president's new tariffs, on behalf of her tribe, but also kind of for everybody. You know, what's good for the Native American is good for Montana. And what's good for the Native American is good for the United States. Right now, Susan's lawsuit is one of about a dozen federal cases trying to stop the tariffs and

They're all making a version of the same argument that when it comes to tariffs There are rules there are laws there are constitutional principles and that Trump is breaking them constitutional principles and that Trump is breaking them. Hello and welcome to Planet Money. I'm Willa Rubin. And I'm Jeff Guho. President Trump has come up with a very creative way to put tariffs on many countries. It involves a law that, until now, has never been used for tariffs before. Today on the show, what power does the president have when it comes to tariffs?

Where do these powers come from? And why Trump's creative interpretation might have a shot in the courts? Okay. Okay, so let's dive into the lawsuit that Susan Weber filed, Weber versus the United States. At the heart of the lawsuit, and all of the lawsuits challenging the tariffs, there's a pretty simple idea, a basic fact about the Constitution. And to help us explain it, we called up Kathleen Claussen. She is a law professor at Georgetown who specializes in trade. Obviously, trade is pretty hot right now. So this is your moment.

This is the moment for all trade lawyers, even if they are not pleased about that. Before she was a law professor, Kathleen actually worked as a trade lawyer in the government, first under President Obama and then under President Trump during his first term. And she says the fundamental thing to understand about tariffs is that in the United States, tariffs are actually the responsibility of Congress. Congress is the branch that is tasked in the Constitution with the tariff authority. That's very clear. No one's disputing that.

It's right there in Article 1. Article 1, Section 8 of the Constitution says, Congress shall have the power to regulate commerce with foreign nations and to collect taxes and duties, meaning only Congress can create tariffs. But in the 1960s and 70s, Congress passed some laws that allowed presidents to make their own tariffs in certain circumstances. It's not like a president can just like randomly come up with some tariff that he wants and blam-o there it is. Blam-o is not in the law that's true. The laws that give

the president permission to create tariffs were mostly created in the middle of the Cold War. Congress saw all these new foreign policy and national security risks and they knew that they might move too slowly. That's one of the reasons they gave the president some powers around tariffs. But for decades, these tariff laws, they were kind of seen as relics from a different time. Everybody knew that these were on the books. But they had not been used for many years, or if they had been used very sparingly in very targeted ways.

Until President Donald Trump took office in 2017. He came in promising to raise tariffs on China, so his trade advisors went searching around in these Cold War era laws trying to figure out how he could do that. What they found was that Congress only gave the president the power to create tariffs in specific circumstances. The rules are laid out in a few different statutes. Most of these statutes go by, there's three digits. So if you want to sound cool in trade world, you have to start talking in three digits, right? Section 301, section 232, section 201, section 122, 338.

The list goes on. Each of those sections, those three-digit statutes, covers a special circumstance. Like section 232, that lets the president put tariffs on imports when national security is at stake. Or section 122, that lets the president put tariffs on imports when national security is at stake. Or Section 122, that lets the president create temporary tariffs if we're running up a serious deficit, like a trade deficit, with another country. Now Kathleen had a front row seat to all of this.

She was at the office of the US Trade Representative during Trump's first term, and she was assigned to look at another one of those statutes, Section 301, which says the president can impose a tariff in response to another country's unfair trade practices. Kathleen's task was to help make a case against China. If she could prove that China was doing something unfair according to Section 301, Trump could put tariffs on Chinese products. And you know, for many years, US companies had been complaining

about Chinese companies stealing their intellectual property and trade secrets. So Kathleen and her colleagues opened up a formal investigation. She followed the steps required by Section 301. She interviewed companies that said they'd been harmed by Chinese spying, talked to cybersecurity specialists,

collected evidence, there's a public hearing and a 200 page report. So we spend many months collecting all this information, putting it together, writing it up, making sure that we follow all of the instructions of the statute, what Congress has asked. So check, check, check and make your recommendation. And off it goes to the president. So you are like the trade inquisitor. I'm going to put that on my CV. The whole process took about a year. But by April 2018, the Trump administration announces they've collected enough evidence about China's unfair trade practices.

And so by the powers invested in him by Section 301, President Trump is allowed to put new tariffs on China. He announces a new 25% tax on billions of dollars worth of products, from aircraft parts, to catalytic converters, to water heaters. And Kathleen wasn't the only one looking for tariff opportunities. Around the same time, Trump's Secretary of Commerce launches an investigation under another law, Section 232. After a few months, they determine that foreign imports

of steel and aluminum are harming national security. So that allows Trump to put tariffs on imported steel and aluminum. There are also investigations for washing machines, solar panels, and that is basically how the president's tariff powers work. There are specific laws that Congress has created with specific rules the president has to follow, investigations that can take a while anywhere from a few months to over a year. Trump learned in his first term that following the rules of these three-digit statutes can be slow and he can only create specific kinds of tariffs.

But when Donald Trump was back on the campaign trail in 2024, he was promising big tariffs, broad tariffs, tariffs that were going to happen immediately. But his advisors are looking at these sections they used last time, like 301 and 232, and these laws are not built for big and fast tariffs. Lylea By this point, Kathleen has left the U.S. Trade Representative's office. She's a professor at Georgetown. She and other trade lawyers know that tariffs are coming, and they're all kind of wondering, throwing out guesses on like which three digit section

he's going to try to use to fit his purposes and justify his tariffs. Is it going to be 301? Is it going to be 232? Is it going to be 122? Very low on that list was AIPAA. Within weeks of taking office, President Trump used a law called AIIPA, the International Emergency Economic Powers Act, to impose a sweeping set of new tariffs on China, on Canada, on Mexico, eventually on countries all around the world.

And this caught a lot of trade lawyers off guard, because it was an unprecedented way of using AIIPA. We trade lawyers don't think of AIIPA as a trade law. That this is not something that I teach in my trade class. It's there. But it's not on the shortlist for how we think about imposition of tariffs in the US economy. Coming up, how Trump's advisors used AIEPA to craft a new legal theory. A theory that might enable the president to basically create whatever tariffs he wants.

But how legal is this new legal theory? That's after the break. Okay, the law that President Trump is using to justify his new tariffs is called the International Emergency Economic Powers Act, AIIPA. It's intended to give the president exceptional, unusual authority to regulate economic transactions in some way when there is an international emergency crisis when national security so requires. Congress passed AIIPA in 1977.

It's a tool to help U.S. presidents respond to international crises. The first time it was invoked was in 1979 during the Iran hostage crisis. President Jimmy Carter declared an emergency and used AIIPA to freeze Iranian assets and property and to stop Iran from using the U.S. financial system in general. Since then, IEPA has been invoked for dozens of international emergencies. Things like apartheid in South Africa in the 80s, or the military government in Myanmar in the late 90s, or the growing nuclear weapons program in North Korea in the 2000s.

When presidents declare an emergency under AIIPA, the law gives them the power to block foreign transactions. Presidents have historically used AIIPA to do things like freeze bank accounts, embargo goods, and prohibit Americans from doing business with foreign criminals or hostile governments. I think if we took a poll of anybody who's ever heard of AIIPA before, they would say, this is a sanctions tool, because it was often used for sanctions, for imposing sanctions on bad guys and gals and folks out there and in particular circumstances. But now Trump is using IEPA to create tariffs.

The way he's interpreting IEPA, the law gives him vast powers to impose all kinds of tariffs. He just has to declare an emergency. This is a new and unusual way to use IEPA. So we asked Kathleen. I mean, does IEPA let Trump do this? That is the magic question of the moment. And I can see the arguments on both sides. We asked Kathleen to walk us through the lawsuits

that people have recently filed against the Trump administration. People like Susan Weber, whose community in northern Montana relies so much on trade across the Canadian border. And Kathleen says there are three main ways that plaintiffs like Susan, the people suing the US government, are challenging the tariffs under AIIPA. The first argument is about what counts as an emergency. Yeah, to justify his first round of new tariffs, Trump said that the national emergency was

illegal immigration and the fentanyl crisis. And to justify his across-the-board tariffs against dozens of countries around the world, he said the national emergency was our overall trade deficit. Now, according to Aiba, an emergency is, quote, an unusual and extraordinary threat, and that it has to be a threat to our national security, foreign policy, or economy. An unusual and extraordinary threat. That's the language. And so some of the plaintiffs are arguing that this is not an unusual and extraordinary

threat. The plaintiffs are arguing that AIIPA was designed to deal with international crises like the North Korean nuclear weapons program, not the trade deficit or the fentanyl epidemic. Is there really an emergency on fentanyl? And then how would tariffs help that problem? Is putting a tariff on those products going to help end that crisis? Is this the right tool for that job? But Kathleen says this could be a difficult argument for the plaintiffs to win because

they're basically asking the courts to second-guess the president on a matter of national security. And when it comes to national security, judges tend to give presidents a lot of leeway. The courts tend to be uncomfortable reviewing the president's actions in a space that I think most people would agree is reserved for the executive branch. When the Department of Justice walks in and tries to defend these actions by saying, this is a national security threat to our economy, most of the time the courts hear national security and say they cannot go any farther. They see that as a stumbling block, as a place that they will not enter because that traditionally

is really reserved to the president and the expertise of the president maybe exceeds that of what the court has available to it. Okay, that argument may be tough for the plaintiffs, but they just need one of their arguments to succeed. And the second way people are challenging these tariffs has to do with what powers the president has under AIIPA. The plaintiffs are arguing that AIIPA isn't about tariffs at all. At the time Congress passed AIIPA in 1977, there were already other laws dealing with the president's tariff

powers, those three-digit statutes like Section 301 and 232. Whereas AIIPA itself doesn't even mention tariffs. And until Donald Trump, no president has ever used AIIPA to create tariffs. Kathleen says the plaintiffs have a decent argument here, but the president might also have a decent argument. His lawyers point out, if you look at what AIIPA says, the actual text of the law is pretty broad. AIIPA says the president has the power to, quote, regulate or prohibit all kinds of transactions, including imports and exports.

When you hear the words regulate importation, do you think that includes putting a tax on the good at the border? Does that mean that I can charge you $5 to bring in your widget into the United States? Regulate importation. I bet I'd find a good contingent of people who, knowing nothing more than that, could agree, could get behind that interpretation of the language. Regulate importation means I can charge you to bring it in. Well, when you put it that way, okay, that sounds reasonable, but what about the history of IEPA and the way it's been used

and all of that? Jeff, you gotta be a textualist here. This is where we're being, the textualist interpretation, right? And the language of the statute says, the president may regulate importation. So surely if he can put an embargo on these goods, then surely he can also charge a fee to bring them in.

So the Trump administration is arguing that even if IEPA has never been used to impose tariffs, the text of that law doesn't rule out that possibility. Kathleen says it's hard to predict how courts will rule on this question. Most legal experts say the Trump administration is certainly interpreting AIIPA in a creative way. But even creative interpretations can sometimes succeed at the Supreme Court.

Now, so far we've been talking about what AIIPA means and what kind of powers does it give the president. But the third and final way that plaintiffs are challenging the tariffs goes beyond what this law says. It goes back all the way to the Constitution itself, where it says that Congress is in charge of tariffs. The plaintiffs say that the way the president is using IEPA is just too much of a power grab. He's taking these two words in AIIPA, regulate, importation, to kind of give himself a blank check during a crisis to make whatever tariffs he wants, to bypass the existing system for creating tariffs using those three-digit laws.

And the plaintiffs, they're saying that it is fundamentally unconstitutional for Congress to hand the president that much power in so few words. There are people who think that this language is too broad. The Supreme Court could say we need to see more direction from Congress in their wording. If that's what they really meant, that's what they got to say more explicitly than regulate importation. Yeah. The argument is that the Constitution gave the power of tariffs to Congress. And Congress can't just pass on all that power to the president willy-nilly. That this goes against the basic design of the Constitution.

There are limits. Now Kathleen says this argument, that Congress can't actually give the president that much unconstrained power, it is probably the most audacious challenge to the president's tariffs. If you were a judge, like looking at these cases, you're laughing. Go on. Uh-huh. If you were a judge working on one of these cases, I mean, how would you rule? Yeah, no, I don't think I would answer this well. I'm just, that's just me.

I prefer to be able to argue both sides. Very lawyerly. Yeah, yeah, maybe. I think this is a very tough case. Kathleen says judges will have a very hard time thinking through all these legal challenges. And most likely these questions will end up at the Supreme Court. Back in Montana, Susan Weber remembers when Trump announced the tariffs a few months ago.

She was hearing from people who were feeling the costs of the president's announcement. And she remembered looking around and wondering, is anyone gonna do something about it? For a while there, it was like, this is so wrong. Here it was, this thing that was, had such a dramatic effect on our total economy and nobody was saying anything. In April, Susan decided to do something.

She filed one of the first lawsuits in the nation challenging the president's tariffs. She says, at first it was about giving a voice to all the people in her district, in her tribe. She was thinking somebody needed to speak up about what the tariffs were putting them through. Were you going into this with much hope? You know, not much hope.

Um, I was going into it because there was a need. My real name in my language is my name is first strike. That's my name. First strike. And so I kind of hopefully living up to my name. But within a few weeks, more cases started to get filed all around the country. Some of those other lawsuits have been moving faster than Susan's. And so far, the people challenging the tariffs have been succeeding. On May 28th, the Court of International Trade in New York declared that AIIPA does not authorize the president to make these big, sweeping tariffs.

And the court ordered the administration to stop collecting on them. Another federal court in D.C. reached basically the same conclusion. Though, so far, the tariffs are still in effect while the White House appeals these cases. If any of these lawsuits succeed, a lot of President Trump's tariffs could disappear. But that doesn't mean the end of tariffs.

It would just mean that Trump would have to rely on the slower existing system, on those three-digit laws like Section 301 and Section 232, you know, making tariffs the old-fashioned way. If you're new to Planet Money, we have been covering tariffs and trade a lot lately. We've got recent episodes following how businesses are experiencing the tariffs and the uncertainty they create, about whether trade deficits matter, and what it means for something to be made in China, or made in anywhere else. Links to these episodes are in our show notes.

This episode was produced by Sam Yellow Horse Kessler and edited by Josh Jang. It was fact-checked by Ciara Juarez and engineered by Harry Paul with an assist from Gillie Moon. Alex Goldmark is our executive producer. A special thanks to Andy Morris, Emily Lay, Rebecca Melsky, Josh Robbins, Eva St. Clair, Jonathan St. Goddard, and Monica Trinell. I'm Jeff Guo. And I'm Lilla Rubin. This is NPR.

Thanks for listening.