‘Emergency’ Room

By Nick Catoggio

Tuesday, November 26, 2024

 

One way to understand this year’s presidential campaign is as an argument over whether past is prologue.

 

For many, a vote for Donald Trump was a vote to restore the pre-inflation economy of 2019. Past is prologue! For the rest of us, it was a vote to re-empower a demagogue whose politics have somehow grown nuttier and more illiberal since his coup attempt following the 2020 election. His second term will be dangerous to a degree that his first wasn’t, at least until the very end. Past is not prologue.

 

Trump supporters won that argument at the polls earlier this month, but I’m confident that Trump critics will win it on the merits. Look no further than his Cabinet nominations, which have devolved from the likes of James Mattis, Dan Coats, and Mike Pompeo in his first go-round to Pete Hegseth, Tulsi Gabbard, and Robert F. Kennedy Jr. now, with potentially worse choices to come. Past hasn’t been prologue on personnel.

 

As of Monday evening, it’s not prologue on trade either. Last night, Trump announced unprecedented plans “to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders. This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”

 

There’s a lot to say about that, but we can start with the fact that the new policy, if it takes effect, would violate a trade deal that Trump himself negotiated.

 

Remember the United States-Mexico-Canada Agreement (USMCA)? The first Trump administration took the hated “globalist” North American Free Trade Agreement (NAFTA) regime that previously governed North American commerce, slapped a little bronzer on it, and pronounced it a major victory for the “America First” agenda. The USMCA had set the terms for trade with Canada and Mexico ever since—until Monday night. “Obviously, unilaterally imposing a 25 percent tariff on all trade blows up the agreement,” a former U.S. trade negotiator told the Washington Post of Trump’s threat.

 

The USMCA is out, trade policy set by presidential whim is in. Past is not prologue.

 

Needless to say, Canada and Mexico aren’t any ol’ trade partners. Together they account for nearly 30 percent of U.S. imports and are major suppliers of everything from fruits and vegetables to oil. Per my colleague Scott Lincicome, Trump’s tariffs on the two countries would amount to a tax hike of more than $200 billion. Ernie Tedeschi, the former chief economist of the Biden White House’s Council of Economic Advisers, estimated that consumer prices will rise by 0.6 percent as a result, imposing an average loss in after-tax income of nearly $1,000 on U.S. households.

 

If you voted for Trump in hopes of restoring the pre-inflationary 2019 outcome, come collect your prize.

 

Lost amid the complex math, though, is a political question: What in the name of James Madison is this dopey country doing letting one man dictate trade policy affecting 500 million people across a continent?

 

Speed matters.

 

The answer, as is usually the case with executive power grabs, is a combination of Congress not wanting to do its job and the president exploiting his remit to protect national security.

 

The Constitution gives the legislature the power to levy taxes and duties and to “regulate commerce with foreign nations.” But over many years and across multiple statutes, Congress has granted the president discretion to impose tariffs unilaterally subject to certain restrictions. It’s unclear which law or laws Trump will cite to justify dropping a tariff nuke on Canada and Mexico, but the fact that he’s framing his policy as a response to illegal immigration and the fentanyl crisis has led some to assume he’ll rely primarily on the International Emergency Economic Powers Act (IEEPA).

 

Never once has the IEEPA been used to impose across-the-board tariffs of the sort he proposed Monday, but even skeptical experts in the field concede that the statute is written broadly enough that Trump will probably get away with abusing this authority. “I’d argue it’s a perversion of the statute, but I would also acknowledge that there’s pretty clear language in IEEPA that authorizes him to do that,” Bill Reinsch, a former Clinton administration Commerce Department official, told Politico in September of using the law for across-the-board levies.

 

It does seem like a perversion of the statute. The IEEPA authorizes the president to use his tariff authority to “deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.” 

 

What’s the supposed “emergency” in this case that requires the president, rather than the House and Senate, to set tax policy concerning Canada and Mexico?

 

According to Politico, “Congress passed IEEPA to deal with situations that develop so rapidly that only the president has time to react.” Which makes sense: It’s the same logic for why the president rather than Congress has authority over using nuclear weapons. In a true emergency, speed matters. A single individual can respond effectively when events are moving fast; a deliberative body of hundreds cannot.

 

Congress has recognized the virtue of executive speed in other statutes, including ones designed to limit presidential authority. In the War Powers Resolution of 1973, for example, legislators restricted the president’s power to order troops into battle without a congressional declaration of war but made an exception for “a national emergency created by attack upon the United States.” The legislature doesn’t want America to be defenseless while it’s slowly assembling in Washington and debating how to respond, so it grants the president some leeway to retaliate immediately. Here again, speed matters.

 

We can tease out a simple rule for federal action from all of this. Whenever Congress gives the president “emergency” authority to wield an Article I power like declaring war or imposing tariffs, that authority should persist for only so long as the legislature itself is unable to wield that power effectively. What, specifically, has “emerged” from the fentanyl epidemic or the border crisis lately that would justify Trump acting on an emergency basis before the House and Senate have had a chance to?

 

Those problems are dire, of course, but they’re also famously durable. Nothing is stopping Congress from wielding its tariff power against Canada or Mexico right now to try to compel better cross-border cooperation. The fact that Trump won’t take office for another two months makes a mockery of the traditional rationale for emergency authority: In this case, it’s actually Congress rather than the president-elect that can react more speedily to the crises.

 

What we have here, in other words, is a brazen case of the incoming executive abusing an “emergency” power not because America needs him to act fast but because he yearns to act unilaterally. And Congress will almost certainly let him, as Republicans in the House and Senate don’t want to enrage their own supporters by thwarting Trump’s crusade for a destructive trade war.

 

Well … a few might be willing, but certainly not enough. American voters hobbled any serious legislative effort to restrain Trump’s power in a second term when they opted to keep a party of cowards and sycophants in control of the House of Representatives.

 

But what about the judiciary?

 

Major questions.

 

To read this legal analysis of Trump’s tariff authority from the Center for Strategic and International Studies is to know despair. “While precedent plays less of a role under the current Supreme Court,” the authors conclude, “past cases suggest that the courts are likely to take an especially deferential approach to executive branch decisions involving foreign policy, national security, and international economic policymaking, recognizing that it falls outside their normal purview and expertise.”

 

Yeah, I wouldn’t bet too heavily at this point on the Roberts Court reining in Trump, especially if he ends up filling another vacancy or two in the next four years.

 

But fair is fair: The Supreme Court has been quite good in the last few years about limiting runaway executive authority over policymaking. One celebrated example came this summer when it overturned the so-called “Chevron doctrine” that required judges to defer to administrative agencies’ interpretations of the statutes that govern them. Another is the emergence of the “major questions doctrine,” which the majority relied on to block Joe Biden’s student-loan forgiveness program. If an executive agency wants to make a truly major change to national policy, the justices have said, it needs a specific grant of power from Congress to do that. It can’t go looking for loopholes in vaguely worded sections of statutes that are already on the books in hopes of finding the authority to act.

 

Unilaterally slapping a 25 percent across-the-board tariff on two of America’s three biggest trading partners, with all of the economic consequences that would flow therefrom, sounds to me about as “major” as major gets. Major enough, one might think, that it should require a delegation of authority from Congress more specific than some vague national security argle-bargle about an “unusual and extraordinary threat” in the IEEPA.

 

Some lawyers agree. In fact, legal challenges to presidential tariff authority based on the “major questions doctrine” are already in motion.

 

And maybe those challenges stand a better chance than we assume. Earlier this week, legal scholar Jack Goldsmith uncorked a long list of issues “where executive power is likely to be pushed hard, rethought, resisted, and/or, when possible, litigated” in Trump’s coming term. Civil service protections, filling federal vacancies, impounding funds appropriated by Congress, deploying the military in questionable situations—it will, in Goldsmith’s words, be a “wild ride.” And that includes tax powers: “Will [the] major questions doctrine check Trump’s tariffs pursuant to super-broad congressional authorizations?” he wondered at one point. 

 

The sheer volume and variety of probable Trump power grabs in a second term could lead the Supreme Court to look more skeptically at executive authority in toto, including on matters like economic and foreign policy where it’s traditionally deferred to the president. The pure cynicism of some of his gambits might influence that, too. His autocratic scheme to get Congress to adjourn so that he can recess-appoint unqualified Cabinet nominees and his enthusiasm for dubious emergency declarations to justify dubious executive actions might convince John Roberts, Brett Kavanaugh, and Amy Coney Barrett that granting Trump another inch constitutionally will encourage him to take a mile.

 

If we regard the death of Chevron and the birth of the “major questions doctrine” as part of a grand project by the Supreme Court to claw back power from the executive that rightly belongs to other branches, you can see how Monday night’s tariff scheme might end up on thin ice legally. When America wants to do something as drastic as declare war (economically speaking) on its neighbors, the Constitution is clear about who’s in charge. And it ain’t the president.

 

And isn’t that the way Republican voters should want it? Forget about constitutional niceties: Businesses need to have confidence in the cost of inputs in order to plan effectively, and they won’t have that confidence if costs are suddenly rising or falling dramatically by presidential decree. Speed, the great virtue of the executive in a true emergency, is a potential killer when it comes to economics. Slow deliberation and the permanence of a duly enacted federal statute, both virtues of Congress, are what’s needed.

 

Nothing matters.

 

Maybe none of this matters, though.

 

Markets were surprisingly calm after Trump announced his tariff scheme on Monday night, probably because no one believes he’ll follow through on it. He made a similar threat in 2019 to use the IEEPA to jack up tariffs on Mexico unless it stemmed border crossings and ended up backing away from it. Odds are good he will likely back away from this threat too once his advisers explain that the consequences of imposing the tax would shatter the reputation he earned in his first term for economic stewardship.

 

Leaders in Canada and Mexico were alarmed enough by Trump’s threat to reach out to him and to start murmuring about retaliatory tariffs of their own, but they’re presumably also in wait-and-see mode. There’s no arguing with the logic of National Review’s Dominic Pino: “If the U.S. actually put 25% tariffs on everything from Mexico and Canada, it would be economically destructive. If everyone knows the U.S. won’t actually do that, then Mexico and Canada know too, so it’s not a credible threat to change their behavior. Either way, not helpful.”

 

So maybe Trump voters will be right in the end. Past is prologue after all: This will end up as another de facto PR stunt from his first term, like building the wall or ending NAFTA, in which very little ends up being accomplished yet Trump’s fans herald him as a genius anyway. “On January 20, Trump will issue an [executive order] with his 25 percent tariffs,” Jonathan Last predicts. “The trigger date for implementation will be some point in the medium-future. Fox will talk about this great achievement non-stop. The mainstream media will talk about how potentially destabilizing the tariffs are.”

 

And then … nothing will happen. Trump will announce a few weeks or months later that fentanyl trafficking and illegal immigration are way down, the executive order will be rescinded as being no longer necessary, and Republicans everywhere will simply believe that the problems have been magically solved because that’s what being a member of Trump’s party requires in 2024.

 

Mass deportation is likely to work the same way. There’ll be some deportations, albeit nothing remotely on the order of 10 million people. Exemptions will be granted liberally to important industries or well-connected cronies, just as waivers from tariffs will. At some point, Trump will declare the problem of illegal immigration solved, Republican voters will rejoice, and that will be that as a political matter.

 

I hope it doesn’t work out that way, though. As much as I don’t want to spend an extra 25 percent on avocados at the supermarket, Americans need to learn some important political and economic lessons, and the results of the election confirmed that those lessons can only be learned by living them. With tariffs, as with Trump’s terrible Cabinet nominees, my motto is the same: We deserve ‘em, good and hard.