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Trump's Tariffs Face Major SCOTUS Test. Aired 10-11a ET
Aired November 05, 2025 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[10:00:00]
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UNIDENTIFIED MALE (voice-over): Live from CNN Abu Dhabi, this is CONNECT THE WORLD with Becky Anderson.
BECKY ANDERSON, CNN HOST (voice-over): Welcome to the second hour of the show from our Middle East programming headquarters. I'm Becky Anderson in
Abu Dhabi where the time is 7 in the evening. And let's get straight to our top story this hour.
We are just moments away from oral arguments at the U.S. Supreme Court on a case president Donald Trump calls a life-or-death moment for the country.
Well
Well, the court will determine the legality of these sweeping tariffs that Donald Trump imposed back in April. The president relying on a 1970s-era
emergency law that critics who brought the case to court say was improperly applied.
The high court's decision could have huge implications on the limits of presidential power, which, in previous cases, the court has expanded. Mr.
Trump says the stakes could not be higher.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT: I think it's the most important decision, one of the most important decisions in the history of our country because,
without tariffs, without our being able to use tariffs really openly and in every way, we are -- really would suffer tremendously from a national
security standpoint.
The national security of our country is at stake. It's the biggest -- I think it's one of the biggest decisions in the history of the Supreme
Court.
(END VIDEO CLIP)
ANDERSON: Well, it's important to note that the court will not render any decision on the case today. It could be weeks or even months before that
happens.
I want to bring in David Weinstein. He's a former state and federal prosecutor and former assistant U.S. attorney for the Southern District of
Florida. There's a title and a half. He'll be with us throughout the hour as we monitor the Supreme Court's oral arguments.
David, good to have you. Thank you, sir. Let's start with very basics here.
What will you be listening for during this hearing?
DAVID WEINSTEIN, FORMER STATE AND FEDERAL PROSECUTOR; FORMER ASSISTANT U.S. ATTORNEY, SOUTHERN DISTRICT OF FLORIDA: Well, what I'll be listening for
are how pointed these questions are at the plaintiffs and the defendants here.
Because, remember, some of what we just heard the president say is true. This is a monumental decision for this Supreme Court. We have seen them
rule in his favor on a number of cases throughout the past term. And most of those have been cases where their ruling is on a preliminary matter.
This one gets to the meat of the matter.
Does the president have powers under the emergency act to impose these tariffs or is that something that's strictly belongs to Congress?
We'll look for the use of the words tariffs and taxes.
Are these tariffs or taxes?
If they're taxes then that's something that Congress controls. If they're not then it's something that perhaps the executive branch can exercise some
authority over.
And again, while the president says that this is the biggest decision ever, I'm not so sure that it's the biggest decision ever but it's a decision
that's going to have lasting impact going forward.
Because a lot of what they decide here will be used in other cases as precedent regarding where these emergency powers end, how much unbridled
power a president has to make decisions and determinations.
So the questions that are asked and how the answers are then sent back are going to frame a lot of where we can see these justices are going today.
ANDERSON: Donald Trump calls this a life-and-death for the country. Let's look a bit more closely at the law. That will be a point of focus today.
The IEEPA, which is the I-E-E-P-A, IEEPA is what our viewers will hear discussed today. That's the International Emergency Economic Powers Act and
it allows the president to regulate imports during an emergency.
The debate, as we understand it today, is largely about whether this includes tariffs or not, correct?
Your first point there.
WEINSTEIN: Yes. That's exactly correct. And again, we look at the name of a statute, Emergency Economic Powers Act.
What is the emergency?
Is there really an emergency affecting our national security that would allow him to put these tariffs in place?
[10:05:05]
Or is it a way that he's trying to shoehorn what's been going on in our economy into some sort of emergency?
And if that's the case and the shoehorn just isn't going to fit in the shoe, then the justices are going to shoot it down. And they're going to
say, no, it's a tax. And that's something that only Congress can do.
ANDERSON: Where do you expect the justices will focus their questioning today?
We know they have previously taken quite an expansive view of presidential powers.
Do you expect to see that again today?
WEINSTEIN: Well, I expect it to come from the conservative side. I think they're going to dig into -- and what the viewers will hear a lot of, if
they're listening in, is something called the major questions doctrine.
That means, is this a question of such great importance that we have to look not only at the enabling statute but beyond that and how this expands
the emergency powers, in this case of the president?
And then we're also going to look for some questions about whether or not they talk about how tariffs are going to be refunded. If there's a lot of
talk about that, then perhaps those questions indicate that they're leaning against the president and his use of these powers and his imposition of
these tariffs.
ANDERSON: Before I let you go, for the time being, I want to show our viewers this map. It shows the countries that currently have tariffs
slapped on by the United States at varying levels.
And you get a sense here, David, of the massive global significance of this Supreme Court hearing today. You know, for the sake of our viewers watching
around the world, let's be very clear.
That sort of, so what, why do we care about this, is that this goes far beyond Washington in terms of implications, correct?
(CROSSTALK)
ANDERSON: Let me stop you there. I do want to get straight to the Supreme Court, because that hearing is now getting underway. And I want our viewers
just to listen in.
(JOINED IN PROGRESS)
D. JOHN SAUER, U.S. SOLICITOR GENERAL: -- country again (ph). Due to IEEPA tariffs, president Trump has negotiated agreements worth trillions of
dollars with major trading partners, including most recently China.
Unwinding those agreements, he warns, would expose us to ruthless trade retaliation by far more aggressive countries and drive America from
strength to failure with ruinous economic and national security consequences.
In Dames and Moore (ph) against Regan, this court held that IEEPA's sweeping and unqualified language grants the president's actions the
strongest presumption of validity in the widest latitude of judicial interpretation.
Yet plaintiffs argue that tariffs, IEEPA's least blunt and most nimble tool, are virtually the only tool that Congress did not grant the president
to deal with foreign emergencies.
That is wrong. The phrase "regulate importation" plainly embraces tariffs, which are among the most traditional and direct methods of regulating
importation. And plaintiffs concede that IEEPA authorizes quotas and other tariff equivalents.
The major questions doctrine does not apply here. IEEPA confers major powers to address major problems on the president, who is perhaps the most
major actor in the realm of foreign affairs.
In the nondelegation doctrine, cast no doubt on IEEPA because Congress may assign the president broad authority regarding the conduct of foreign
affairs or he enjoys his own inherent Article II powers.
I welcome the court's questions.
ASSOCIATE JUSTICE CLARENCE THOMAS, U.S. SUPREME COURT: Would you spend a few minutes on why exactly the major question doctrine doesn't apply to the
president in this case?
SAUER: Yes, Justice Thomas, and I may make two or three points on that front.
First of all, though the major questions doctrine may apply to the president in other contexts, specifically in the foreign affairs context,
where he has his own inherent Article II authority, it's a particularly poor fit to apply the major questions doctrine.
And that's for at least two reasons. First of all, just as a matter of kind of common sense interpretation, one would expect Congress to confer major
powers on the president to address major, you know, foreign international crises, so to speak, in foreign arising emergencies.
That that's just a natural, common sense thing you expect Congress to do.
And in fact, you know, Justice Jackson, in his Youngstown opinion, addressed this very situation in pages 652 and 653, when he says, "This is
the system within our" -- or "This is the procedure within our constitutional system that we have developed to strike the balance."
You know what Dames and Ward (ph) described as the never-ending tension between the need for the executive to address, have a robust power to
address emergencies and to subjected to checks and balances, what our Constitution system has devised to address that particular problem.
That never-ending tension, is the system where Congress confers broad administrative powers in advance and subjects them to ongoing political
oversight, which is exactly what you see in IEEPA. So that's one reason.
One reason, just as a matter of common sense interpretation, you would expect Congress to grant major powers to the president.
[10:10:00]
Who has his own broad range of major authority, article -- inherent Article II authority in this context. And that is buttressed by --
(CROSSTALK)
ASSOCIATE JUSTICE SONYA SOTOMAYOR, U.S. SUPREME COURT: -- general (ph) there. And I know that you have a second question and I want to let you get
to that.
But just on that first reason, it seemed to depend a lot on the president's inherent Article II powers. And I'm wondering what exactly which powers
you're speaking of there, because tariffs, one would naturally think, is the power to impose taxes, the power to regulate foreign commerce.
These are not things that are thought of as Article II powers. They are quintessential Article I powers.
So what kind of Article II powers are you relying on when you gave the answer about major questions to Justice Thomas?
SAUER: I would refer to what the court said, for example, in Egan, The Department of Navy against Egan. That's a generally accepted view that the
president has broad authority in the foreign affairs realm. It debates about exactly how far it goes and how to draw the boundary between the
president and Congress.
But Edie and Garamendi (ph); other cases, Curtis Wright, the court has recognized the president has broad inherent authority to address foreign
situations, foreign affairs, foreign policy, including foreign arising emergencies.
Now we don't contend that he has -- he has, at least in peacetime, inherent tariffing authority. What we have here is two layers. There's the layer,
the bedrock of the president's inherent Article II powers. And layered on top of that is a sweeping delegation of authority from Congress.
When you put those two things together, Congress is saying you have inherent power to address international emergencies. And we're conferring
you -- on you the tools, including Article I tools -- like, for example, the power to regulate foreign commerce. And I want to make a very important
distinction here.
We don't contend that what's being exercised here is the power to tax. It's the power to regulate foreign commerce. These are regulatory tariffs. They
are not revenue-raising tariffs. The fact that they raise revenue is only incidental.
The tariffs would be most effective, so to speak, if no person ever paid them, if they achieved their goals, if they --
(CROSSTALK)
CHIEF JUSTICE JOHN ROBERTS, U.S. SUPREME COURT: Counsel, you've already mentioned Dames and Moore three times, which surprises me a little because
the court in Dames and Moore went out of its way to say that it was issuing a very narrow decision that pretty much expected to apply only in this
case, just a few quotes.
It said, "Decisions in this area have been rare, episodic and afford little precedential value for subsequent cases."
Again, we lay down no general guidelines covering other situations not involved here and confine the opinion only to the very questions necessary
to decision of this case.
And it ended the opinion.
It said, "Finally, we reemphasize the narrowness of our decision."
Now this, an issue in Dames and Moore, was a different provision of IEEPA not at issue here and certainly did not concern tariffs. So I don't quite
understand how you can get as much out of Dames -- as Dames and Moore as you're trying to get.
SAUER: Maybe I can put it this way. You don't dispute that Dames and Moore is, as you stated, a narrow opinion. However, it addressed certain
principles that we think are equally applicable here.
For example, the interpretive principle Dames and Moore held -- and, again, it was -- it was the power to nullify and void, not the power to regulate.
But it's in the very same sentence, in the very same statute.
And the court quoted the First Circuit opinion and said, look, this is sweeping and unqualified language, which it didn't disagree with. And then
it said this particular provision where Congress has given these broad verbs, I mean, regulators are capacious verb (ph), admittedly.
So are nullifies, so are void. So are, frankly all the other verbs there. In the language in IEEPA, and the way the court thought about it is we are
looking at this through the lens of Justice Jackson's opinion in Youngstown.
And the court held specifically that these verbs place the president in Youngstown's zone one. They, the court held that he's subject to the widest
latitude of judicial interpretation, that he receives the strongest presumption of validity.
(CROSSTALK)
SOTOMAYOR: And so I just don't understand this argument. It's not an article. It's a congressional power, not a presidential power to tax.
And you want to say tariffs are not taxes. But that's exactly what they are. They're generating money from American citizens, revenue. And you say
it's incidental to the regulatory purpose.
But I don't see how a quota is equivalent to revenue raising. A quota sets a limit to what you can import in but it doesn't generate revenue.
I don't understand this argument that it's equivalent or that foreign powers or even an emergency can do away with the major questions doctrine.
Didn't we in the Biden case recently say an emergency can't make clear what's ambiguous?
SAUER: As to that point, I believe the court has never applied the major questions doctrine into foreign policy context or emergency context, not
foreign policy context.
SOTOMAYOR: Counsel, we have never applied it to foreign affairs but this is a tariff. This is a tax.
SAUER: It is a -- if I may, it's a foreign-facing regulation of foreign commerce.
[10:15:04]
That's a regulatory term.
SOTOMAYOR: So Biden could have declared a national emergency in global warming and then gotten his student forgiveness to not be a major questions
doctrine?
SAUER: I don't think he could have gotten student loan forgiveness.
SOTOMAYOR: Why?
It's foreign-facing. We need all of these things to face -- to tax fossil fuel or to do something else, that's all Biden would've had to do with any
of his programs.
SAUER: Let me put it this way, if I may?
SOTOMAYOR: It's just declare some foreign-facing purpose?
SAUER: If I may, look, maybe I can articulate this way. The power to impose tariffs is a core application of the power to regulate foreign
commerce, which is what the phrase regulate importation and IEA naturally evokes.
SOTOMAYOR: Why is it -- what's -- could you tell me why it is that when Congress intended to permit a president to regulate by imposing tariffs,
it's always used tariff and regularly?
I have about 16 laws in the past that when Congress intended regulate to mean taxing, that it used taxes simultaneously but it didn't here.
SAUER: Respectfully, this court came to the opposite conclusion, if I may, in Algonquin, where the phrase would not include --
(CROSSTALK)
SOTOMAYOR: Well -- but that was -- we did something in Algonquin. It was in the duties section, unlike here. It was paired with questions about
decreasing tariffs and increasing tariffs. So it's a very different statute than the one at issue here.
SAUER: But the governing language, admittedly, the references to duties in section 232A, 232C does not refer to them and the court didn't refer to
232A at all or the rate raises, duties or tariffs analysis. What it held was the phrase adjust imports, which includes a verb that's narrower --
(CROSSTALK)
SOTOMAYOR: But it was in the context -- it was in context of activities that had to do with raising and lowering duties. Here, the noun -- the
verbs that accompany regulate have nothing to do with raising revenues in the form of Texas.
ASSOCIATE JUSTICE KETANJI BROWN JACKSON, U.S. SUPREME COURT: And, Counsel, Algonquin wasn't a textualist opinion. Do you agree with that?
In other words, the analysis that the court was using there was really keyed to the legislative history of that statute and it wasn't as though we
were doing an interpretation of the word adjust.
SAUER: I disagree with that. I think if you read the opinion first, it talks about plain meaning, then it talks about statutory context and then
it goes on to legislative history. So it was all three of those.
And the conclusion it came to, it directly addressed and rejected the argument that the D.C. Circuit had accepted in that case, which is that
when Congress wants to delegate the authority to tariff, it uses a consistently explicit and well-defined approach, which is to use these
magic words, tariff, tax imposed and so forth.
JACKSON: Well, let me --
(CROSSTALK)
SAUER: The Congress is not bound to use that particular formulation once it confers power.
JACKSON: Let me ask you about the premise of your argument, which you started at the beginning saying that one would expect for Congress to give
the president a broadly way in this kind of foreign affairs context.
And I guess I'm wondering whether you also don't have to contend with the actual purpose of IEEPA in making this argument.
Because, as I understand it that IEEPA was designed and intended to limit presidential authority, that Congress was concerned about how presidents
had been using the authority under the predecessor's statute, TWEA. And it's pretty clear that Congress was trying to constrain the emergency
powers of the president in IEEPA.
So it seems a little inconsistent to say that we have to interpret a statute that was designed to constrain presidential authority consistent
with an understanding that Congress wanted the president to have essentially unlimited authority.
SAUER: I disagree with that because of what Congress actually did --
(CROSSTALK)
JACKSON: What part do you disagree with?
I'm sorry.
SAUER: Well, I disagree with the notion that they were trying to constrain the breadth of the actions the president may take when it comes to this
particularly narrow domain, which is, you know, various regulations of transactions.
JACKSON: But how can you disagree with that?
I mean, the history is what it is. And --
SAUER: Because they made a series of changes to IEEPA --
JACKSON: Yes.
SAUER: -- that relate to the triggering conditions, so to speak and the procedures that apply but they did not change the language in that --
JACKSON: Right. But what was the intent of Congress in changing the language?
Wasn't it to constrain presidential authority in this area?
SAUER: To constrain it in the triggering conditions and the procedures that apply in this --
JACKSON: So those -- the triggering conditions and procedures that apply are a means to constrain.
[10:20:05]
That is how they went around about constraining.
But my point is that Congress enacted this legislation with the intent of preventing the president from having unlimited powers in this area and
you're asking us to now interpret that statute consistent with an understanding that Congress wanted to allow the president to do pretty much
whatever he wanted in this area,
SAUER: Congress took the language from TWEA and enacted the very same language and most importantly here, the very same phrase, regulated
importation in IEEPA. And, therefore the natural inferences, Congress did not intend to change the scope of authority, the powers, the tools the
president can exercise --
JACKSON: Did any president under TWEA -- did any president under TWEA use that language to impose tariffs?
SAUER: Well, yes. President Nixon's 1971 tariff --
JACKSON: Not a tariff. That wasn't a tariff. It was a licensing agreement during wartime. It was a specific thing. The tariff I'm talking about.
SAUER: I'm referring to President Nixon's 1971 tariff.
JACKSON: Oh, I'm sorry. Excuse me, yes, I thought you meant Lincoln.
SAUER: Not only that but then it was upheld by the Court of Appeals of exclusive jurisdiction under this very phrase.
JACKSON: Well, can I back you up just a second?
I'm sorry. You're talking so quickly.
SAUER: Sorry.
JACKSON: President Nixon did not rely on TWEA initially to impose the tariffs. Is that correct?
I understood that was just a litigating position that he took once. It was challenged. That was not his initial.
SAUER: I wouldn't put it that way because he has a broad invocation. You know, I'm invoking all range of statutes, something like that in
Proclamation 4074.
And I think the understanding is he didn't want to kind of spook our allies by invoking the trading with the Enemies Act by specifically invoking it.
But in litigation, it was defended on that ground. So the Department of Justice defended it as an exercise of TWEA and did so successfully.
ASSOCIATE JUSTICE NEIL GORSUCH, U.S. SUPREME COURT: What's the significance of the Nixon example and precedent here?
Because I think figuring that out is real important to deciding this case correctly. So --
SAUER: Well, there's one obvious, very powerful takeaway from it, which is that this very two word phrase, regulate importation that we say, it
carries with it the authority to tariff, impose regulatory tariffs at the border, forward-facing tariffs at the border.
And we say that's a core application of the phrase, importation. Had been interpreted two years before Congress reenacted that language, in IEEPA,
had been interpreted to carry with it the authority to impose tariffs.
So this court said in Algonquin, for example, with respect to President Nixon's --
(CROSSTALK)
GORSUCH: Well, what -- just back on the Nixon, what was the scope of the Nixon tariffs?
SAUER: He imposed a 10 percent tariff kind of across the board to all our major trading partners to address a balance of payments deficit, where he
was trying to bring all the major industrial nations to the negotiating table, which he successfully did but from the imposition of the tariffs.
And they negotiated the Smithsonian agreement in about five months after which he lifted the tariff.
So the tariff there was used as here in part as leverage to get our trading partners to the negotiating table. And it was subsequently upheld by the
federal circuit, the CCPA, its federal circuit's predecessor, that had exclusive jurisdiction over that question to include the power to tariff.
And then two years later, Congress took that same phrase and reenacted it in IEEPA after carefully studying the problem of presidential emergency
powers and being deeply concerned about, you know, excessive or abusive exercise of that power.
So that whole process gives strong confirmation to this phrase, regulated importation, carries with it the power to tariff. Now, of course, that's
not our leading argument.
Our lead argument on interpretation is there's a pedigree, a historical pedigree of regulating imports specifically where the power to tariff is
just the a core application of that, a quintessential exercise of that power.
That goes back to Gibbons against Ogden and Justice Story's treatise and runs all the way through cases like McGoldrick and Board of Trustees.
ASSOCIATE JUSTICE AMY CONEY BARRETT, U.S. SUPREME COURT: Can I just ask you a question?
Can you point to any other place in the code or any other time in history where that phrase together, regulate importation, has been used to confer
tariff-imposing authority?
SAUER: Well, as to regulate importation, that was held in TWEA. So obviously, that's --
(CROSSTALK)
BARRETT: OK. OK. So an intermediate appellate court held it in TWEA but you just told Justice Kavanaugh that wasn't your lead argument, that your
lead argument was this long history of the phrase, regulate importation, being understood to include tariff authority.
So my question is, has there ever been another instance in which a statute has conferred, used that language to confer the power, putting aside
Yoshida.
SAUER: I mean, obviously, the other statutory example is just imports, the cases we rely on our cases where, for example, in Gibbons against Ogden and
justice stories treaties.
BARRETT: But that just shows the word can be used that way. None of those cases talked about it as conferring tariff authority. I understood you to
be citing McGoldrick and Gibbons in those cases, just to show that it's possible to say that regulating commerce includes the power to tariff.
SAUER: I think our argument goes a bit further than that is interpretive matter, because if you look at that history, the history of --
SOTOMAYOR: Can you just answer the justice's question.
[10:25:00]
BARRETT: Can you identify any statute that used that phrase to confer to?
SAUER: Yes. The only two statutes I can identify now are TWEA, as interpreted in Yoshida and then closely related, not regulated importation
but adjust imports in Section 1232?
BARRETT: Well, I think adjust imports is differently. So the answer is the contested application in TWEA and then now in IEEPA.
SAUER: And then, of course, I mean, there's a direct line there.
BARRETT: Yes I understand that. But OK.
SAUER: But more fundamentally, we rely on the historical associates to show there's this long, historical pedigree of broad delegations of the
foreign commerce power, not the power to tax that.
We're not asserting here delegations of the foreign commerce power to the president going back to Gibbons against Ogden all the way through
McGoldrick and Board of Trustees where that this court and founding a sources say the power to.
In other words, the power to tariff is kind of this natural, you know, as everyone knows, that includes --
BARRETT: Just to ask you one other question about the plain text, General Sauer. So you've referred to the other verbs in IEEPA as capacious.
Would you really describe them as capacious?
Because to me, things like nullify and void have definite meanings. I agree with you that regulate is a broader term but those words, I think, are
powerful. They give -- they pack a punch but I wouldn't describe them as capacious in the sense that they have a wide range of meaning.
So can you describe what you mean by capacious?
SAUER: Let me put it this way. You look at all nine verbs together and you're looking at a spectrum of powers from the most negative, nullify,
block, prohibit, void, to the most affirmative, direct, compel and then also powers in between that are more intermediate, regulate, investigate
and so forth.
So the natural common-sense inference from that grammatical structure is the intention of Congress to cover the waterfront.
SOTOMAYOR: Well, General, possible, except Congress did take out a whole bunch of verbs. It took out confiscate, vest, hold, use, administer,
liquidate, sell, which were in the prior statute.
And, crucially, what it doesn't have here is anything that refers to raising revenue. So it has a lot of verbs. It has a lot of actions that can
be taken under this statute. It just doesn't have the one you want.
SAUER : Well, I would say the notion that all these other verbs are not revenue raising, like block and prohibit. I think that that argument is
unconvincing for two reasons. One, of course, is that we don't -- we're not saying it confers a revenue raising power. We're saying it confers a
regulatory power and that's a crucial distinction. But also --
SOTOMAYOR: Yes but if I can just stop you there, regulatory power -- I mean, yes, it says regulate but I'll broaden out Justice Barrett's
question, is there any place that you can find in the entire code where regulate used just as regulate includes taxing power?
SAUER: We don't assert that. We say, it includes tariffing power when it's combined with importation. And that's just the most naturally --
SOTOMAYOR: Right. Because the natural understanding of regulate, even though, in fact, we can regulate through taxes but when the code uses
regulate, we don't typically understand it to refer to duties or taxes or tariffs or anything of the kind.
And then if you look at the flipside of this and you look at all the tariff statutes that Congress has passed, I mean, they use language about revenue
raising tariffs and duties and taxes, all the language that does not appear in the statute you rely on.
SAUER: I'll start with grammatical structure of the statute, then I'll refer to the other statutes. Regulate importation, you put those two words
in combination.
That's -- the inference from that is, you know, the founders discussed with this like, you know, as everyone knows attitude, regulate importation,
almost is one of the most natural applications of that is the power to tariff.
So when Congress confers the power to regulate imports, it is naturally conferring the power to tariff, which has delegated to the executive
branch, you know, again and again and again going back --
SOTOMAYOR: I'm sorry. So it doesn't say, regulate tariffs. It says regulate importations and exportations. You agree that they can't put
tariffs, taxes on exportations constitutionally.
SAUER: I agree with that, yes.
SOTOMAYOR: All right. So why should we think that it's natural then to think that regulate importation includes taxing importations?
SAUER: Because that is how --
SOTOMAYOR: It is in the conjunctive, importations and exportations. If they can't do it with respect to exportations, why are we permitting them
to do it with respect to importations?
SAUER: Because as this court has recognized going back to Gibbons against Ogden and going through McGoldrick and Board of Trustees --
SOTOMAYOR: We're going --
SAUER: -- imports, tariffing is a core application of that. So in other words, if you're saying, go regulate trading insecurities --
SOTOMAYOR: So why is it that Congress -- why is it that Congress has always used, regulate and tax, together in the code?
Are you telling us that, with respect to its use of regulate in other statutes, the taxing reference is superfluous, they didn't need to do that?
[10:30:00]
SAUER: I'm not sure what other statutes use regulate and tax together. But this statute has a specific historical pedigree going back to its enactment
during World War I in 1917, where the phrase "regulate importation" is evoking an inherent power to tariff.
That became established in the 19th century with in cases like Hamilton against Dylan and so forth. And that history is, I think, set forth in
Professor Baum's amicus brief.
ROBERTS: Counsel, some time ago, you dismissed the applicability of the major questions doctrine and I want I want you to explain that a little bit
more. I mean, it seems that it might be directly applicable. You have a claim source in IEEPA that had never before been used to justify tariffs.
No one has argued that it does until this particular case. Congress uses tariffs and other provisions. But not here. And yet -- and correct me on
this if I'm not right about it, the justification is being used for a power to impose tariffs on any product from any country, for in any amount, for
any length of time.
That seems like -- I'm not suggesting it's not there. But it does seem like that's major authority and the basis for the claim seems to be a misfit.
So why doesn't it apply again?
SAUER: Well, we agree that it's a major power but it's in the context of a statute that is explicitly conferring major powers and the point of the
statute is to confer major powers to address major questions, which are emergency.
So it would be unusual to say, look at the statute and say, we're not going to find a major power here.
ROBERTS: Well, but the exercise of the power is to impose tariffs. Right? And the statute doesn't use the word tariffs.
SAUER: But it uses the word regulate importation. And historically, a core central application of that, a big piece of that has always been to tariff.
If you had asked the founders, how do you regulate imports?
They would say, of course, we tariff. That's what we do.
So it'd be very unusual to say we're giving you power to regulate importation and say but you can't impose regulatory tariffs. That'd be a
contradiction. And all the historical sources we cite in our brief, you know, relate to that particular historical pedigree.
And as I was referring to earlier, there's a specific pedigree of importation here in the specific context of the Presidents Polk and Lincoln
and President McKinley asserting the authority to impose tariffs in wartime. That was then codified in Tawila and then recodified for peacetime
until 1933 and then carried over into IEEPA.
So there's that as well. But more importantly, if you look at the triggering conditions that members of this court have identified for the
major questions doctrine, there's a series of them. And we think they really do -- all of them don't apply here.
For example, the notion that the power is unheralded. Your refer to the fact that IEEPA has never been asserted to invoke tariffs. But, of course,
the immediately predecessor statute, the tariffs that President Nixon imposed on that, were upheld under this very language.
So I would say this is -- and it was recodified in Iowa two years later. So this is kind of the opposite of unheralded power. It's also heralded
because there's this longstanding delegation tradition of very broad delegations of the foreign commerce power going back to the founding, going
back to --
(CROSSTALK)
ROBERTS: The foreign commerce part of it. But I mean -- and I think this is a question for the other side as well. It's two facing. Yes, of course,
tariffs in dealings with foreign powers. But the vehicle is imposition of taxes on Americans.
And that has always been the core power of Congress. So to have the president's foreign affairs power Trump had, that basic power for Congress,
seems to me to kind of at least neutralize between the two powers, the executive power and the legislative power.
SAUER: Let me say two things in response to that. First, the notion that these are -- the taxes are all borne by Americans and are not borne by
foreign producers whose goods are imported, this is -- empirically that's not -- there's no basis for that in the record. It's actually a mix.
ROBERTS: Well, who pays the tariffs.
If a tariff is imposed on automobiles, who pays them?
SAUER: There's a -- typically there'd be a -- regardless of who the importer of record is, there'd be a contract that would go along the line
of transfer that would allocate the tariff. And there'd be different -- sometimes the foreign -- the foreign producer would pay them. Sometimes the
importer would bear the cost.
The importer could be an American, could be a foreign company. A lot of times it's a wholly-owned American subsidiary of a foreign corporation. So
it gets allocated. The empirical estimates range from 30 percent to 80 percent of like how much is borne by --
(CROSSTALK)
ROBERTS: I mean, it's been suggested that the tariffs are responsible for significant reduction in our deficit. I would say that's raising revenue
domestically.
SAUER: There certainly is an incidental and collateral effect of the tariffs. They do raise revenue. But it's very important that they are
regulatory tariffs, not revenue-raising tariffs.
And the way you can see this, I think, if you look at this policy, this policy is by far the most effective if nobody ever pays the tariffs. And I
say two policies, right.
So if you look at the trade deficit emergency, if nobody ever pays the tariffs and instead Americans direct their consumption toward American
producers and stimulate the rebuilding of our hollowed-out manufacturing base, then the policy is by far the most effective.
[10:35:05]
(CROSSTALK)
SOTOMAYOR: Why not do what the statute permits, bar importation of products altogether?
That would be the most effective way to do it.
SAUER: What the question is --
SOTOMAYOR: Follow the statute. The statute says the president can do that. What it doesn't say is the president can raise revenue.
SAUER: Well, it says he can't regulate importation and go --
(CROSSTALK)
SOTOMAYOR: -- causing it, subjecting some countries and not others to importation bans. Has a lot of verbs but none of them include generating
revenue as a side effect or -directly.
SAUER: Let me let me address that verb point, if I may, because think about the canonical example.
A statute that refers to a list of swords, knives, daggers, dirks and pikes. There you look at those, that list of things and you say, aha, those
are all weapons. Therefore, a pike is a spear not a fish in that particular context.
Now look at this list of verbs -- block, prohibit, compel, direct and so forth. You don't look at that naturally as an ordinary reader and say, oh,
look, they're all not revenue-raising. What you say is they're all very broad, powerful, you know, actions.
JACKSON: -- general, the verbs that are in the statute are actually doing something. I mean, they're in the statute for a reason.
And as I understand it, Congress actually explained to us in its Senate report and House report when it enacted the 1941 amendments to TWIA, what
it was doing.
It said that, "What we are doing is authorizing the president, the Senate report," quote, "to control or freeze property transactions where a foreign
interest is involved."
There's similar language about controlling, freezing control, in the House report. So I appreciate that generally you can look at these words and you
can imagine that they mean certain things.
But here we have evidence that Congress was actually trying to do a particular thing with respect to the authority that it was presenting to
the president. And that thing was not raising revenue.
SAUER: I think that what Congress, the powers that Congress was conferring on the president are best understood through the plain text of the
statutes, which includes regulating --
JACKSON: I know but some of us care about the legislative history. And so the plain text of the statute has certain verbs in it.
It also has regulate commerce, as you say. And when I look at the legislative history, it appears as though Congress was trying to give the
president the authority, to, quote, "control or freeze property transactions where foreign interest is involved."
And in the TWIA context that makes perfect sense, because we're talking about a wartime dynamic. And what is happening is the president needs the
authority to prevent trading with the enemy in the midst of a war. And that seems to be the focus of this statute.
So I guess I'm concerned about just taking a particular word here and there and saying that the general view of it might include raising revenue, when
in fact it looks as though the aim of this was really to give the president a certain kind of authority to freeze the assets of the enemy.
SAUER: Yes. And let me say two things in response to that. First, as the notion that this is a revenue-raising tactic or power, it is not. We are
asserting a regulatory power. It's a delegation, the power to regulate foreign commerce.
The way to control imports traditionally has been to tariff them. They say, well, you can impose quotas. Well, quotas are essentially economically --
you know, economically equivalent to tariffs.
So the question is why would you be able to quota under regulate but not tariff under regulate when the tariffs are themselves regulatory?
And let me turn back to the question I was -- the response I was --
JACKSON: Could the answer be --
(CROSSTALK)
JACKSON: -- could the answer be that, in other places where Congress wants that particular form of regulation to be used, they say impose duties. They
say you can tax, Mr. President. Here they don't say that.
SAUER: I'd say two things in response to that. That's the very argument that this court rejected in Algonquin, that the fact that these other
specific statutes --
(CROSSTALK)
JACKSON: If we disagree with you that Algonquin is a similar context, do you have another statute or another circumstance?
SAUER: And again, not to cite Algonquin again but obviously we discussed the phrase "adjust imports." And they said the natural way to do that is to
tariff them. And they specifically said it makes no sense at all to authorize quotas, which was conceded that that statute did authorize, but
not tariffs, because those are equivalent.
JACKSON: That's by any means necessary, which kind of beefs up the "adjust." And also -- and this is actually -- I just don't know the answer
to this question. So maybe you can help and maybe the other side can help as well.
Algonquin was very careful to always call it a license and a licensing fee. And in the oral argument that came up, too, the distinction between a
tariff and a licensing fee -- and I can understand how in some contexts it would be very difficult.
[10:40:00]
You would press on it and you would say, well, if this license fee is raising revenue then it actually functions as a tariff.
But what is the significance of that?
Because in IEEPA, it also says -- it refers particularly to licenses. It says you can license. And license would be a way of giving permission.
That's actually the language also used in the Civil War, one. And --
(CROSSTALK)
SAUER: Yes, it does.
JACKSON: It was a license. It was a license fee. And that's a way to grant permission that you wouldn't otherwise have, to trade and import and let it
through. So tell me, tell me what the distinction is between licenses and fees and if it matters.
SAUER: It's hard for me to see one, because what President Lincoln said is, OK, we're going to allow imports from hostile foreign powers;
basically, rebellious Confederate states, of cotton, subject to a license.
And -- but you got to pay $0.04 a pound in cotton when you do it. That's the condition. And that is so nearly equivalent to a tariff that says you
can bring this goods into our country but you got to pay ad valorem assessment on it.
And so it's -- and, of course, they have, in their briefs, conceded that quotas apply, that licensing may apply. There is the language in the
beginning of 1701 that talks about instruments, you know, or other methods, instruments, licenses.
(CROSSTALK)
JACKSON: -- why couldn't you just call this a license?
And it's also true that, in the cotton example, the court said the action itself was not properly a tax but a bonus required as a condition precedent
for engaging in the trade. So it seems like it was a little squirrely about how it was proceeding.
And if there really is no distinction, why couldn't you just call it a license here?
SAUER: Very briefly, the other two cases, you know, the Polk case and then the President McKinley case, talk about duties.
So I see an equivalence there, Mr. Chief Justice.
ROBERTS: Thank you, Counsel.
Justice Thomas, anything further?
THOMAS: The other side is going to argue, make an -- argue on delegation, I believe.
Would you anticipate that.
And give us your understanding of the delegation argument.
SAUER: Yes. Justice Thomas, I'd say a couple of things in response to that.
First of all, this court has stated that the nondelegation doctrine does not apply with anything like the same force in, as it does in the domestic
context, in the foreign context. And that, again, to cite Dames and Moore, again, Dames and Moore cites Youngstown.
And Youngstown, in footnote two of chief -- Justice Jackson's opinion, he goes into detail about this. He addresses Curtiss-Wright. He says there's a
lot of broad dicta in Curtiss. Right. But the holding of Curtiss, right.
The ratio decidendi is that the domestic nondelegation doctrine does not apply with the same force in the foreign context. And then he -- and he
used that phrase "does not apply."
He says the strict limitations on delegation that apply in the internal context do not apply in the external context. And so we rely on that line
of cases.
And for the reasons I talked about earlier, where we're talking about a situation where the president has his own inherent authority to address
foreign arising emergencies and Congress has conferring tools on him that expand his ability, his capacity to do so, we are in the area of Youngstown
zone one (ph).
THOMAS: And a few times you have alluded to the history as being important in interpreting the statute. And also that this language comes from the --
Trading with the Enemies (sic) Act and that has its own pedigree.
Could you just sketch out this direct line that you were alluding to as a basis for interpreting the current emergency statute as you would like it
interpreted?
SAUER: Yes, Justice Thomas. And turning back to the response I was giving to Justice Barrett earlier, there is -- I think it's very well set out in
Professor Bombsite's (ph) amicus brief. There is this history of presidents using a tariff, power or tariff equivalent power very, very close to tariff
power in wartime to tariff trading with enemies.
And that is when the Trading with the Enemy Act was enacted in 1917, it was deliberately evoking that. And when it brings in the power to regulate
importation, it's essentially codifying for the inherent power of the president's already recognized to have.
And then in 1933, when that power is expanded to an area where he wouldn't inherently have it, the peacetime context, that codification, the meaning
of that remains the same.
The "regulate importation" language that's brought in from TWIA and then ultimately to IEEPA in 1977, is carrying with it that connotation.
And that's reinforced by all the cases we've cited in our brief, where there's been extremely broad delegations of the power to tariff
specifically and the power to regulate foreign commerce more generally, going back to the time of the founding, which ties to your question about
nondelegation.
ROBERTS: Justice Alito.
ALITO: The court of -- the CCPA said several -- said things in Yoshida that are helpful to your position. But it also said some other things. It
said that future surcharges, quote, "must, of course, comply with Section 122 of the Trade Act of 1974."
[10:45:00]
And it said that the Trading with the Enemy Act did not authorize the president to, quote, "fix rates of duty at will without regard to statutory
rates prescribed by Congress."
So do you think that Congress, to the extent Congress had that decision in mind and relied on it, do you think it also relied on those statements in
the opinion?
SAUER: Not in the same way, because those statements are read into other provisions of TWIA that Congress did not enact in IEEPA, they may still be
there in TWIA but those are limitations that it wouldn't make sense to do.
And I think the significance of Yoshida is at a higher level. Keep in mind that their principal position is no tariffs at all; regulate importation
just doesn't carry a connotation of the power to tariff.
And we say we've got historical sources going back to Gibbons against Ogden that say the opposite. But more fundamentally, everyone knew that at the
time IEEPA was enacted that it regulated importation just very visibly and very prominently been upheld to include a sweeping global tariff.
ALITO: Thank you.
ROBERTS: Justice Sotomayor.
SOTOMAYOR: I'd like to go back to Justice Barrett's question on the word "license" as used in IEEPA. It's not used as a verb. It's used as a noun,
by "the president may, under such regulations as he may prescribe, by means of instructions, licenses or otherwise," then do what the verbs permit him
to do.
By license, he can nullify, void, prevent or prohibit any acquisition, et cetera. So license is not being used as a verb that, through licensing, he
can raise revenue. He can only use licenses to accomplish the verbs.
So I don't understand how we can treat licensing as equivalent to revenue- raising. It, as used in IEEPA, the license is only to accomplish what B (ph) permits.
SAUER: In Hamilton against Dylan, licenses, once you have the license, then you had to pay the fees, the license fees --
SOTOMAYOR: But that's --
(CROSSTALK)
SOTOMAYOR: -- the point I'm making, which is that the only use of "license" here is a noun. You can license to accomplish the powers that B
(ph) gives the president.
SAUER: Let me be clear. We rely on the phrase "regulate importation." We're not saying that executive --
SOTOMAYOR: Exactly. You're not relying on licenses for that reason.
SAUER: No, I only cite that language. (INAUDIBLE) language about, you know, instruments, licenses or otherwise --
(CROSSTALK)
SAUER: -- another layer of breadth in this particular --
SOTOMAYOR: Counsel, would you listen to my question?
You're not relying on license for the reason I just said, because it is a noun, not the verb. You're relying on regulate, correct?
SAUER: Yes. We're relying on regulate importation.
SOTOMAYOR: And despite the fact that no other president in the history of IEEPA has ever used, has ever imported -- used tariffs as a power under
IEEPA (ph) --
SAUER: Well, President Nixon did so.
SOTOMAYOR: -- under a predecessor. And we have all the limitations of that. All right.
Number two, whenever Congress intends to permit taxing and regulate -- it uses the word tax and regulate in every other statute, correct?
SAUER: I don't concede that. I mean, two very visible examples, again, are TWIA and Section 122.
SOTOMAYOR: We're back to the question here. OK. Thank you, counsel.
ROBERTS: Justice Sotomayor.
UNIDENTIFIED FEMALE: No, she's Justice Sotomayor.
(LAUGHTER)
(CROSSTALK)
UNIDENTIFIED FEMALE: She just finished.
ROBERTS: Justice Kagan.
(CROSSTALK)
UNIDENTIFIED FEMALE: And they're friends.
(LAUGHTER)
KAGAN: I want to take you back to Justice Thomas' question about nondelegation. And if I understood your answer correctly, it was really
similar to the answer that you started off with when you talked with Justice Thomas about the major questions doctrine.
Which is everything's different because the president has independent constitutional powers in this area. And so that, if one does not think that
with respect to tariffs, if one thinks that a tariff is a -- is a taxing power, is a regulation of foreign commerce, that is really delegated by the
Constitution to Congress.
That argument does not -- does not sound so well. And in fact, when you look at J.W. Hampton, which gives rise to the nondelegation test that we
usually use, J.W. Hampton is a tariffs case.
And the court did not say, oh, we need some special new principle here, some stricter rule, because we're dealing with tariffs in which presidents
are directly concerned as a matter of foreign relations. It enunciated the test we use for all nondelegation.
So how does that fit with your theory?
SAUER: Eight years later in Curtiss-Wright, the court held the nondelegation doctrine for domestic affairs does not apply with the same
force as it does --
KAGAN: But not with respect to tariffs, not with respect to quintessential taxing powers, which are given by the Constitution to Congress.
SAUER: I think justices of this court have recognized in their opinions.
[10:50:00]
That one of the reasons that the nondelegation doctrine, you know, that intelligible principle test has impact, as much punch as Justice Kavanaugh
said in one of his opinions as it might otherwise have done, is it did arise in the foreign affairs context.
Because there the court has historically been very, very comfortable with very broad delegations. Chicago and Southern Airlines, another case from
the 1930s, shortly after J.W. Hampton talked about the very large delegations of the foreign commerce power being very effective.
And, of course, this goes back to the very dawn of the republic in 1790, for example. Congress conferred on president Washington basically the
entire Indian commerce power.
He said, go, you know, get licenses, right, to do commerce with the Indians and they'll be subject to whatever rules and regulations President
Washington can make.
So I do think there is a profound consistency between the announcement, the intelligible principle test and J.W. Hampton and then the subsequent
recognition by this court in Curtiss-Wright, that the nondelegation doctrine doesn't apply with the same force in this context.
KAGAN: In Consumers Research, just last year, we had a tax before us and the question was, was this a delegation issue?
It was, of course, a much smaller tax which dealt with many fewer taxpayers. Notwithstanding that, we said, if there's no ceiling on this tax
-- we sort of assumed that if there were no ceiling on this tax, it would raise a delegation problem.
And most of the opinion was given over to showing that there, in fact, was a ceiling on the tax, not a quantitative one but a qualitative one.
But how does your argument fit with the idea that a tax with no ceiling, a tax that can be anything, that here the president wants, there an agency
wants, would raise a pretty deep delegation problem?
SAUER: First of all, I can't say enough. It is a regulatory tariff, not a tax.
ANDERSON: We are listening to oral arguments on Trump's tariffs as the Supreme Court hearing gets underway.
Why do we care?
Well, these tariffs have huge global impact, of course. John Sauer is the U.S. solicitor general, arguing his case. And we have been listening to
questions from the Supreme Court justices. David Weinstein is still with me.
John Roberts, who's chief justice, of course, seemed very focused about the scope of what the Trump administration is arguing. The chief justice said
that the case Sauer is referencing over and over again is very specific and not meant to set a precedent.
It's actually a case that upheld the legality of former President Jimmy Carter's decision to use frozen Iranian assets as a bargaining chip to win
the release of American hostages.
That does seem very different than the emergency that the current administration is arguing and the ultimate reason for these tariffs.
Is that the point that John Roberts is trying to make here?
WEINSTEIN: Well, Becky, I think everyone's getting a little taste of what a lawyer's job is like. He's focusing on not only the decision but how
broad the decision would be. And then the other justices keep focusing on specific words.
And so, yes, he is trying to focus very narrowly on the difference between what happened in that case, use of Iranian assets to -- by the president,
versus here, this so-called declaration of an emergency under which they're going to impose tariffs, which they claim are not really taxes on imports
into the United States.
So he's trying to make it very clear that, while cases set precedent, specific cases only apply very narrowly. And that's what he was -- the
chief justice was trying to get at.
ANDERSON: Yes. Let's remind our viewers, these are all -- sorry -- all oral arguments, of course. So you've got the solicitor general arguing his
case. And he's being cross-examined about certain parts of this.
And this is the first time, as I understand it, that these Supreme Court justices are discussing the merits of this case. Obviously, the line of
questioning may give us some indication as to where these judges stand.
But this isn't a decision here. This is oral arguments. Sotomayor asked a question about tariffs versus taxes. She said that they are one and the
same, since they both generate revenue for the government from American citizens.
Is that legally accurate?
What do you make of her questions, what we're hearing, and the wider story here?
WEINSTEIN: I think that is legally accurate. And that's why they kept trying to pin him down on whether or not his interpretation was, is the
tariff a tax?
[10:55:00]
And in terms of where this is going to me, they seem very skeptical of the government's argument here to support their position, that this broad-
ranging power would allow him to impose a tariff. But let's see what happens on the other side. That's what they do in oral arguments.
They pick at your arguments and they attack what you're saying and give you an opportunity to flesh out the argument so they can wrap their head around
what opinion they're going to give. And it will be a precedential setting, no doubt about that.
ANDERSON: And just given the extension or expansion of presidential power that this current court has allowed in the recent past, I wonder whether
you think pushback from liberal justices perhaps, is, you know, no real indication of where we're going.
But are you surprised by what at least feels like pushback from John Roberts and Amy Coney Barrett, for example?
WEINSTEIN: Only a little bit, because, look, on the other issues and questions that they've answered, those have been very few merit-based
cases. And they've seen what happened on the one big case that they sent back, giving a president unlimited authority to do things.
And perhaps not only the liberal justices within the Supreme Court but just the court of public opinion is giving them a taste for what will happen if
they keep going down that road on an issue like this, which is then going to be used as precedent for other decisions.
ANDERSON: It's good to have you, sir.
This continues, as does CNN and its coverage of these oral hearings of the Supreme Court hearings. And that's it from us, though, on CONNECT THE
WORLD. "ONE WORLD" up next.
END
