Trump’s Tariff Trumped: An analysis of the Judgment of the Scotus
Adv. Priyanka Ajjannavar, Pranav K N, Nadan Uchila and Megha P,
ADV PRIYANKA AJJANNAVAR, PRANAVA K.N. (6TH SEM; BMS LAW COLLEGE), NANDAN UCHILA (6TH SEM; KSLU), MEGHA P. (2ND SEM; SJRC LAW COLLEGE) (FROM THE CHAMBERS OF SENIOR ADVOCATE K.G. RAGHAVAN) GUIDED BY: K.G. RAGHAVAN (SENIOR ADVOCATE)
As trade wars roared and political scores soared, it was not foreign leaders but the judiciary that ultimately held the board. RECENTLY, the 6:3 verdict passed by the Supreme Court of the United States (SCOTUS), in its 170-page judgment in the case of Learning Resources v. Donald J. Trump (POTUS), declared the actions of the US President unconstitutional and illegal, as it lacked the authority of law.
This article examines the constitutional and legal framework governing tariffs in several jurisdictions. On January 20, 2025, Donald Trump, as President of the United Staes (POTUS) declared a national emergency to address two foreign threats: firstly, the influx of illegal drugs from Canada, Mexico, and China, which has created a public health crisis, and, secondly, “large and persistent” trade deficits had “led to the hollowing out” of the American manufacturing base and “undermined critical supply chains.”
Consequently, the President invoked powers under the International Emergency Economic Powers Act (IEEPA) to unilaterally impose tariffs purportedly to address the two foreign threats referred to above.
In the challenge, the SCOTUS was required to interpret Article 1, Section 8 of the US Constitution, read with the provisions of the IEEPA. Article 1, Section 8 is extracted below:
“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.”
It would be noteworthy to look at the genesis of the above provision, as a bitter war ensued between the French and the British between 1754 and 1763. On account of the prolonged war, Britain was in financial distress. To get over the same, Britain imposed several taxes on the American colonies. These taxes were opposed by the natives, and thus began the “No Taxation without representation” movement. Intrinsic to such movement was the principle that only the people or the people’s representative could impose taxes and not anybody else.
One such impost was on Tea under the Tea Act, passed by the British Parliament. In protest opposing this tax, many tea containers from the British ships were thrown into the sea, and this event is popularly known as the Boston Tea Party.
Inspired by this, the framers of the American Constitution gave Congress, who are the elected representatives, alone the power to lay and collect taxes “from the pockets of the people,” as aptly reflected in Article 1, Section 8 of the American Constitution.
Against this backdrop, the POTUS declares a national emergency and imposes tariffs, a power exclusively granted to Congress. The shelter was sought to be taken under 50 U. S. C. §1702(a)(1)(B) of the Act. The said provision:
“(B) investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.”
Adverting to the challenge to the executive power of the President to impose the tax in the teeth of Article 1, Section 8 and taking refuge under the IEEPA, the SCOTUS said that “both the separation of powers principles and a practical understanding of legislative intent suggested Congress would not have delegated 'highly consequential power' through ambiguous language. And if Congress were to relinquish that weapon to another branch, a “reasonable interpreter” would expect it to do so ‘clearly.’”
Additionally, the Court continued, “What common sense suggests, congressional practice confirms. When Congress has delegated its tariff powers, it has done so in explicit terms and subject to strict limits. Congress has consistently used words like “duty” in statutes delegating authority to impose tariffs.”
It is undisputed that the president unlocks extraordinary powers under 50 U. S. C. §1702(a)(1)(B) of the IEEPA once he declares an emergency. However, the word ’tariff’ is absent from the catena of powers mentioned in this provision. The word ‘regulate’ mentioned in this section does not include the power of taxation, because when Congress addresses both the power to regulate and the power to tax, it does so separately and expressly. Instead, Congress intended to delegate to the President the power to freeze and control foreign property transactions under the IEEPA. Hence, the defence of the POTUS based upon the IEEPA failed.
Furthermore, Chief Justice Roberts, along with J. Gorsuch and J. Barrett, applies the major question doctrine, which was formulated in 2022 in the case of West Virginia v. EPA. It states that when an executive official claims Congress has delegated him some extraordinary power, the major questions doctrine requires him to identify clear statutory readings to justify his authority in an “extraordinary case.” This is analogous to the pith and substance doctrine.
However, the minority opinion adopted a different approach. The dissent argued that the term “regulate importation” is naturally broad and historically understood to include various instruments of trade control, including tariffs. In the dissent’s view, tariffs are tools of economic regulation rather than purely fiscal measures. The minority rejected the application of the major questions doctrine, contending that IEEPA is itself an emergency statute designed to grant the President flexible economic authority in response to foreign threats. According to the dissent, Congress deliberately employed sweeping language to enable swift executive action in matters of international trade and national economic security.
Since trade policy inherently implicates international relations, the minority reasoned that the Executive should be afforded greater interpretive latitude. They characterized tariffs as falling along a spectrum of measures authorized under IEEPA, which includes the power to prohibit importation altogether. If the President may completely block imports, the dissent argued, it follows that imposing tariffs is a lesser included authority within the power to regulate. In their view, the majority’s insistence on explicit tariff language unduly constrained executive flexibility and disregarded Congress’s intention to empower the President during economic crises.
Nonetheless, Justice Gorsuch, in his concurring remarks, held that, “The most major decisions affecting the rights and responsibilities of the American people (including the duty to pay taxes and tariffs) are funnelled through the legislative process for a reason. Yes, legislating can be hard and take time. And, yes, it can be tempting to bypass Congress when some pressing problem arises. But the deliberative nature of the legislative process was the whole point of its design. Through that process, the Nation can tap the combined wisdom of the people’s elected representatives, not just that of one faction or man.”
Justice Jackson writes that, “The legislative history here plainly establishes that Congress understood and intended IEEPA and TWEA to authorize a wholly different type of power: the power to freeze foreign-owned property. And the proper role of the Court is to give effect to Congress’s intent, not our own instincts. Congress tells us why it has included certain language in a statute, the limited role of the courts in our democratic system of government—as interpreters, not lawmakers—demands that we give effect to the will of the people.”
It is apposite to refer to the scheme envisaged by law in the matter of the imposition of tariffs. One of the most significant delegations appears in Section 232 of the Trade Expansion Act of 1962, which authorizes the President to impose tariffs or other import restrictions if certain imports are found to threaten national security. Investigations under Section 232 are conducted by the Department of Commerce, specifically through the Bureau of Industry and Security, which evaluates the potential national security impact of imports and submits a report with recommendations to the President. Upon receiving the report, the President may determine whether action is necessary and may impose tariffs, quotas, or other trade restrictions.
Similarly, Section 301 of the Trade Act of 1974 authorizes the United States to respond to unfair trade practices by foreign countries. Investigations under this provision are conducted by the Office of the United States Trade Representative, which examines whether a foreign government’s actions are discriminatory or burden some U.S.commerce. Following investigation and public consultation, the USTR may recommend remedial measures, including tariffs or other trade restrictions, which may then be implemented through presidential authority. In addition to these mechanisms, the United States International Trade Commission functions as an independent, quasi-judicial agency that conducts investigations and determines whether imports cause material injury to domestic industries in certain trade remedy cases, such as anti-dumping and countervailing duty proceedings. While the Commission’s findings are significant, the President is not always strictly bound by its recommendations, depending on the statutory framework governing the particular trade measure.
Thus, the system governing tariffs in the United States reflects a structured allocation of powers between the legislative and executive branches. Congress establishes the statutory framework and tariff schedules, while the President may adjust or impose tariffs pursuant to authority delegated through specific trade statutes. Specialized administrative bodies conduct investigations and technical determinations, and once a tariff measure is adopted, it is implemented and enforced at the border by customs authorities. This institutional arrangement ensures that tariff policy operates within a legally defined framework while allowing the executive branch sufficient flexibility to respond to developments in international trade and economic policy. Such a structured mechanism prevents arbitrariness in the decision-making process and is consonant with the doctrine of “due process” envisaged under Article 1 (Analogous to Article 14 of the Indian Constitution).
The position is similar in the UK, the European Union and India.
UK
In the UK, tariffs are treated as taxation measures and therefore require parliamentary authorization. Useful reference in this regard is made to the Bill of Rights 1689. Following Brexit, the primary legislation governing tariffs is the Taxation (Cross-border Trade) Act 2018, which provides a legal framework for the levy of customs duties in the UK.
EUROPEAN UNION (EU):
In the European Union, the operational framework for customs administration is contained in the Union Customs Code, which governs how tariffs are applied across the European Union. The European Commission proposes tariff measures and issues implementing regulations, while the Council adopts the relevant provisions. Customs authorities in each member state then administer and collect the duties when goods enter the Union.
INDIA
Article 265 mandates that no tax shall be levied or collected except by authority of law. This provision enshrines the principle that taxation must have clear legislative sanction. Articles 245 and 246, read with the Seventh Schedule, distribute legislative competence over taxation between the Union and the States, ensuring that fiscal authority remains within democratically accountable legislative bodies.
In India, customs duties and tariffs are imposed through parliamentary enactments such as the Customs Act and the Customs Tariff Act. Although Parliament may delegate limited powers to the Executive to adjust rates within defined parameters, the essential legislative function determining the existence, scope, and framework of taxation cannot be abdicated. Fiscal impositions must be grounded in explicit statutory authority. This constitutional insistence on legality and legislative supremacy mirrors the American Court’s refusal to infer tariff power from the general phrase “regulate importation.”
The comparative insight is therefore substantial, and not merely procedural. The principle is based on sound democratic values which invest the people and the representatives of the people with the power to deprive their citizens of property, namely, their money.
Constitutional systems all across the world recognize taxation as a foundational legislative power intimately connected to democratic governance. Both insist that revenue extraction cannot rest on executive interpretation of ambiguous language,and at the whims and fancies of the executive. Even where economic regulation intersects with international trade and national interest, fiscal authority demands clarity, precision, and legislative control. The American major questions doctrine, as applied in Learning Resources, functions to prevent expansive interpretations of statutory delegations in matters of great economic significance. The Indian constitutional mandate under Article 265 similarly ensures that taxation arises only from clear legislative enactment.
CONCLUSION
The President’s imposition of a tariff, which falls within Congress’s purview, is a clear example of how a government kills a right, and the SCOTUS’s rightful intervention reinforces the doctrine of separation of powers by preventing the executive from encroaching on Congress’s powers. This judgment, unlike others, will be heralded as a shining example that struck down the President's actions, as it filled the statutory vacuum by upholding constitutional morality. When viewed alongside the Indian constitutional framework governing taxation and tariff power, the case underscores a shared constitutional commitment: the power to tax is central to democratic accountability and cannot be transferred by implication. Across all democratic jurisdictions, constitutional design demands that fiscal burdens on citizens emerge only from explicit legislative command, not from expansive executive construction.
