Dan Wolff, partner and Crowell & Moring, joined "Forbes Newsroom" to discuss the legal challenges some of President Trump's tariffs are facing after a lawsuit alleges the president overstepped his authority by imposing levies against China using the International Emergency Economic Powers Act.
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NewsTranscript
00:00Hi everybody. I'm Brittany Lewis, a breaking news reporter here at Forbes. Joining me now is Dan
00:08Wolf, partner at Kroll & Mooring. Dan, thank you so much for joining me. Well, happy to join,
00:14happy to be here. Thanks for the invitation. I'm really excited to get your legal perspective
00:18on President Trump's tariffs today because he promised them on the campaign trail. And since
00:23he began his second term, he threatened, started, paused, and ratcheted up trade wars with allies
00:28and adversaries alike. He invoked the International Emergency Economic Powers Act of 1977 as reasoning
00:35to impose the tariffs, and he has since been slapped with a lawsuit over some of the tariffs
00:40he announced pre-Liberation Day when he unveiled his sweeping tariff plan. The lawsuit says that
00:45his reasoning behind the levies are unconstitutional. So what stands out to you about this legal fight?
00:51Well, what stands out is the basic proposition of whether Aiba, the statute you referenced,
01:00provides the president with the authority to do what he's done in the realm of tariff setting.
01:10And the complaint, as it makes clear, is that for at least two reasons, he cannot. Either because
01:19the statute doesn't provide for the setting of tariffs, or if the statute does provide for the
01:26setting of tariffs, it does so in an unconstitutional way because it basically hands over the authority
01:32to set tariffs that is vested in the Congress of the United States by our Constitution to the president.
01:39And that would be considered an improper delegation.
01:46The non-profit New Civil Liberties Alliance, who is suing Trump, argues that Aiba doesn't allow the
01:53president to impose tariffs on the American people, like you said, and it claims that the president is
01:57exceeding his authority. How strong is that legal argument? I think it's very strong. And it's strong
02:05for the reasons stated in the complaint. If you sort of take the first argument, which is one of just
02:13statutory interpretation, if you look at Aiba, you don't see any clear reference to the authority
02:21of the president to use that statute for purposes of setting tariffs. And that's in contrast to the
02:29Trade Act of 1974 or the Trade Expansion Act, which those statutes do provide the president with
02:39tariff-setting authority. So from a matter of what does Aiba mean, if we just read the text of the
02:45statute, it doesn't authorize the setting of tariffs. But then the second point, which is the
02:51constitutional point, is that to the extent the statute must be read to allow the president to
02:58set tariffs, it does so in an unconstitutional way. And that's because the power to set tariffs is vested
03:05as one of the enumerated powers in Article I of the Constitution with the Congress. And vested means
03:15something. It means only Congress can do this. And Congress cannot thus take one of its vested powers
03:23and hand it over to the executive branch. And so I think both of those arguments are strong. I think
03:30typical judicial approaches to interpretation would first take up the statutory interpretation
03:36question. And the case could stop there, and the court may never reach the constitutional question.
03:46And I'm putting aside questions of venue and forum and just looking at this on, you know, the liability
03:52question. I want to get your reaction to something that a White House spokesperson told Newsweek.
03:58They said that Trump has broad authority to impose tariffs to address issues of national emergency.
04:04As a lawyer, what do you make of that argument? I mean, what constitutes a national emergency?
04:11Well, there's two separate issues. The president may well have authority to determine questions of
04:23national emergency. And it's beyond, you know, my expertise as an attorney who doesn't sit in the realm of
04:34analyzing foreign affairs to say what a national emergency is. But I don't think that's the issue.
04:42Whatever authority the president has to determine the existence of a national authority is separate and
04:49distinct from the president's authority to set tariffs. And again, go back to the Constitution.
04:57Article 1 gives to the Congress, vests with the Congress, the authority to set tariffs. It may be,
05:05and this is how our political branches act together, it may be that the executive branch
05:11is charged with making certain findings or certain determinations that would then inform the Congress
05:18to decide what to do about it. But that that would be perfectly normal for Congress to take a report
05:25from the president and then act on that in its lawmaking capacity. But the fact that the president
05:31has authority to determine national emergency is distinct from whether the president also has authority
05:38to set tariffs, which the Constitution clearly vests with the Congress. The lawsuit deals with tariffs
05:44that were imposed on Chinese products pre-Liberation Day. So this deals with things before the April 2nd
05:51announcement. So does the fate of this lawsuit do anything to the tariffs that were imposed after
05:56that? And if it was found that President Trump imposing these tariffs was unconstitutional, does this undo all tariffs?
06:04Well, no. I mean, there's lots of tariffs. And I want to, you know, we're only talking about the IEPA
06:14related tariffs. So, you know, most tariffs are going to be fine. To the first part of your question,
06:22though, this is, yeah, this targets a specific tariffs that grew out of the February executive orders.
06:30As a matter of, you know, as a matter of case precedent, a decision in favor of that plaintiff
06:39would certainly provide, you know, a legal authority for others to use in challenging either their own
06:48tariffs under the same executive orders or these more recent Independence Day executive orders,
06:56obviously events of the last 24 hours might affect the immediacy of needing to get relief there.
07:03But, you know, that's that's that's the typical that's the typical legal process that we have.
07:09Court issues of decision, you know, it's subject to appeal in that case to the 11th Circuit,
07:14ultimately to the Supreme Court. Other district courts may come out differently on the same legal
07:19question. So it's not binding.
07:20You know, a decision in favor of the plaintiffs in this lawsuit wouldn't be binding on, you know,
07:28other other cases brought by other plaintiffs, but it would certainly be precedential. And,
07:34and, you know, I think would be something that everyone, you know, everyone will be watching the
07:40case as a sort of a litmus test of what other IEPA based tariffs may also be vulnerable.
07:48To your point, since everyone is watching this as this sort of litmus test, do you think we are
07:53going to see other legal challenges down the road?
07:57I do. Yeah, I would, I would, I would, I would expect to see more. I mean, this is where, you know,
08:03there's a lot at stake here. And this is just one plaintiff in one federal district court.
08:09And I think there are legitimate questions about whether, you know, another lawsuit might be better
08:18brought in the Court of International Trade, you know, for example, to challenge on non-delegation
08:25grounds. Because if IEPA is construed as a statute that provides for tariff setting authority,
08:32then the way to attack that is through the constitutional issue. And I think that, you know,
08:37a lawsuit could, I think, be brought in the Court of International Trade. So I don't think this one
08:42lawsuit will settle everything for everyone for all time. And, you know, obviously the, the economics,
08:49the economics and the implications of these tariffs are so great. I just can't imagine that this will
08:56be the only lawsuit in this area. We know that this lawsuit is about the February related tariffs
09:03on China. But since then, President Trump really ratcheted up the trade war with China. Since then,
09:09it's been a tit for tat. And most recently, as of Wednesday, he escalated their tariffs to 125%.
09:16So let's say that the IEPA based tariffs are found unconstitutional. Will this undo the entire trade
09:23war between the United States and China? Well, that probably goes beyond the scope of my particular
09:31subject matter expertise. I think that, you know, for the reasons I already said, if the IEPA based
09:44tariffs are found to be unlawful, either because IEPA doesn't provide for tariff setting authority or
09:50because, um, to the extent it does, it's unconstitutional. Um, would it, um, would it
09:56undermine the, the ratcheting up? Yeah. To the extent the ratcheting up is based on IEPA,
10:01it would undermine that tariff, uh, or those tariffs that flow from that executive action. Um,
10:08would it unwind the complete trade war? I, you know, that's there, obviously there are other
10:13tariff setting authorities. So, you know, this could go in different directions based on, uh, other
10:18authorities, um, you know, that, that, that don't rely on IEPA. So what specifically when it comes
10:25to this legal challenge and IEPA related tariffs, are you looking out for next?
10:31Well, um, I would, uh, uh, expect, well, I'm looking procedurally, I'm looking to see how the
10:38government responds, um, with respect to venue. Um, will we see a motion to dismiss in whole or in
10:44part, um, on the grounds that the plaintiffs filed in the wrong forum? And I'm not, I'm not saying
10:52whether they, I'm not opining on whether they did or not, but it would not be, um, um, uh, it would,
10:58it would, it would not be unusual to see a motion to dismiss from the government, um, based on, uh,
11:04the fact that, as I alluded to earlier, that, that perhaps the right forum for this is the court
11:09of international trade, but on the merits, you know, I'm looking for a decision and, um, they
11:14haven't, at least I checked yesterday, uh, they hadn't yet filed, uh, for a preliminary injunction.
11:19So the only thing on the docket right now is the complaint. And, um, typically the government has 60
11:25days to respond. So barring a separate motion for TRO or preliminary injunction, which is the sort of
11:32thing we've seen playing out and, you know, dozens and dozens of other challenges to executive order
11:37actions. Uh, there's really nothing that compels the court to move fast on this, on this issue.
11:44And that may be intentional, um, on the part of the plaintiff and counsel, um, just to tee this up
11:51and let it simmer as a political issue. Um, you know, sort of as a sort of Damocles, um, without,
11:58without any intention of trying to move it quickly. Um, I'm also watching to see if there's gonna be
12:03other cases, right? Are there going to be other cases that either in federal district court
12:06or in the court of international trade? And are they going to, um, seek, uh, more expedited
12:11review sort of on a, on a, on a motion for TRO or preliminary injunction basis that would speed
12:16this up and, and get the case, um, teed up, um, you know, more quickly than it appears, uh,
12:22the plaintiffs in the Florida case are, are so far doing.
12:25Well, there's certainly a lot to keep our eye on and I appreciate your legal perspective.
12:29You are welcome back anytime. Dan Wolf, thank you so much for joining me.
12:33Okay. Thanks for having me.