WEBVTT - ‘L Day’ Tariff Legality, With Stanford’s Sykes 0:00:15.120 --> 0:00:18.599 Welcome to the Votes and Verdicts podcasts hosted by Bloomberg Intelligence, 0:00:18.680 --> 0:00:22.560 the investment research arm of Bloomberg LP. In this podcast series, 0:00:22.640 --> 0:00:25.279 we talk about the intersection of business policy and law. 0:00:25.520 --> 0:00:27.920 My name is Holly from I'm an analyst with Bloomberg 0:00:27.960 --> 0:00:32.400 Intelligence covering consumer and industrials litigation. Today's podcast will focus 0:00:32.440 --> 0:00:36.320 on several key court rulings impacting tariffs and specifically a 0:00:36.360 --> 0:00:38.880 May twenty eighth decision by the US Court of International 0:00:38.920 --> 0:00:41.720 Trade and May twenty ninth decision by a Washington District 0:00:41.760 --> 0:00:45.879 court holding that President Trump's reciprocal tariffs and terriffs imposed 0:00:45.920 --> 0:00:49.320 on China, Canada, and Mexico were unlawful. I'm delighted to 0:00:49.360 --> 0:00:52.479 be joined today by Stanford Law School Professor Alan Sykes. 0:00:52.520 --> 0:00:55.640 Professor Sykes is the founder of Stanford Law School's LM 0:00:55.760 --> 0:01:00.760 program in International Economic Law, Business and Policy, as editor 0:01:00.760 --> 0:01:03.480 of various trade journals. He's a graduate of Yale Law 0:01:03.480 --> 0:01:06.600 School and received his PhD in economics from Meale University. 0:01:06.880 --> 0:01:09.080 Professor Sykes signed and amicus freef and support of the 0:01:09.080 --> 0:01:12.319 plaintiffs in both cases that the International Trade Court decided. 0:01:12.600 --> 0:01:14.880 One of those cases was filed by importers who say 0:01:14.880 --> 0:01:17.840 they would suffer irreparable harm if there reciprocal terariffs were 0:01:17.840 --> 0:01:20.679 allowed to continue, and the second was filed by twelve states. 0:01:20.959 --> 0:01:23.560 Thank you for joining us again, professor, and we'll dive 0:01:23.640 --> 0:01:26.920 right into the topic. So, the International Trade Court on 0:01:26.959 --> 0:01:30.919 May twenty eighth found executive orders imposing so called reciprocal 0:01:30.920 --> 0:01:34.959 tariffs or otherwise known as worldwide tariffs and tariffs on China, Canada, 0:01:35.040 --> 0:01:39.520 and Mexico related to fentanyl trafficking were unlawful. Can you 0:01:39.520 --> 0:01:41.720 explain the International Trade Course ruling? 0:01:42.160 --> 0:01:47.640 Sure? The Port of International Trade took the two sets 0:01:47.640 --> 0:01:51.240 of tariffs separately, the worldwide and retaliatory tariffs and the 0:01:51.560 --> 0:01:55.680 so called trafficking tariffs relating to fentanyl. With respect to 0:01:55.720 --> 0:01:59.440 the worldwide and retaliatory tariffs, which are the bulk of 0:01:59.480 --> 0:02:01.880 the tariff on the rest of the world other than 0:02:01.880 --> 0:02:07.680 Canada and Mexico, the court ruled that the International Emergency 0:02:07.720 --> 0:02:12.080 Economic Powers Act, known as AEPA does not give the 0:02:12.120 --> 0:02:16.440 President the authority to impose the sweeping tariffs that he 0:02:16.919 --> 0:02:20.640 proposed to impose on the world as a whole, the 0:02:20.680 --> 0:02:25.040 ten percent tariff on everyone and then the reciprocal tariffs 0:02:25.080 --> 0:02:27.480 that would range up to I believe it was something 0:02:27.520 --> 0:02:32.280 like eighty percent on certain countries. The reasoning on the 0:02:32.320 --> 0:02:40.160 worldwide retaliatory tariffs was interesting. The court did not accept 0:02:40.240 --> 0:02:43.720 the argument put forward by some plaintiffs that AEPA does 0:02:43.720 --> 0:02:47.000 not allow the use of tariffs at all, but rather 0:02:47.120 --> 0:02:51.240 the court said that even if AYEPA does allow tariffs 0:02:51.280 --> 0:02:54.640 under certain circumstances, it does not allow the kind of 0:02:54.760 --> 0:02:58.680 unbounded tariffs that the President has imposed, which are not 0:02:58.880 --> 0:03:03.919 limited in time, very much higher than US tariff commitments 0:03:05.040 --> 0:03:08.320 in US statutes, and goes without saying, much higher than 0:03:08.320 --> 0:03:13.280 the US commitments under international trade agreements, and chosen against 0:03:13.520 --> 0:03:16.000 any country the President wishes. That that sort of sweeping 0:03:16.000 --> 0:03:22.760 authority was beyond what IEPA conferred, and the thinking, in 0:03:22.840 --> 0:03:26.639 part was that if the authority, as the government put 0:03:26.639 --> 0:03:30.480 it forward, were to be accepted, then AEPA would be 0:03:30.520 --> 0:03:33.720 in effect of delegating to the President all authority over 0:03:33.800 --> 0:03:37.400 tariffs to do whatever he wants, any tariff he wants, 0:03:37.520 --> 0:03:40.000 in any country he wants, for any duration he wants, 0:03:40.920 --> 0:03:45.200 and that would be unacceptable under the Constitution, both in 0:03:45.240 --> 0:03:48.560 relation to what's known as the non delegation doctrine and 0:03:48.640 --> 0:03:51.280 what's known as the major questions doctrine. So the Court said, 0:03:51.280 --> 0:03:54.720 we're going to construe the statute to be consistent with 0:03:54.720 --> 0:03:58.280 the Constitution, and therefore the sweeping tariffs that the President 0:03:58.320 --> 0:04:02.080 composed under AEPA or simply not acceptable. Then with respect 0:04:02.160 --> 0:04:06.680 to the so called trafficking tariffs, the Court said that 0:04:07.240 --> 0:04:10.080 the tariffs imposed by the president. First of all, it 0:04:10.120 --> 0:04:13.000 concluded that this was not an unreviewable political question, that 0:04:13.040 --> 0:04:16.719 the Court did have authority to review the president's decision 0:04:16.760 --> 0:04:20.440 with regard to the trafficking tariffs. And then, having reached 0:04:20.440 --> 0:04:23.200 that conclusion, it went ahead to say that these trafficking 0:04:23.240 --> 0:04:26.400 tariffs do not, in the words of the statute, deal 0:04:26.520 --> 0:04:32.559 with the emergency, which is thought to be drug trafficking. Either, 0:04:32.600 --> 0:04:36.760 they simply impose punishment on Canada and Mexico for failing 0:04:36.800 --> 0:04:40.200 to have done more themselves to abate the problem of 0:04:40.240 --> 0:04:43.440 drug trafficking. And the Court ruled that that did not 0:04:43.760 --> 0:04:46.719 meet the statutory requirement that the measures taken by the 0:04:46.720 --> 0:04:50.480 President actually deal with the emergency in question. 0:04:50.839 --> 0:04:53.240 You said you agree with the results of the International 0:04:53.279 --> 0:04:57.680 Trade Court's ruling. Do you see any possible vulnerabilities on appeal. 0:04:58.480 --> 0:05:00.800 I do agree with the result. I hope that it 0:05:00.839 --> 0:05:04.440 holds up on appeal. If I were to take the 0:05:04.480 --> 0:05:09.040 other side of the argument for argument's sake, I think 0:05:09.640 --> 0:05:15.760 one possible criticism would be that the statute, even if 0:05:15.800 --> 0:05:20.479 it does not grout, does not grant unbounded statutory authority 0:05:20.520 --> 0:05:25.440 for tariffs. The President didn't literally claim unbounded authority. He 0:05:26.400 --> 0:05:30.080 declared a national emergency, said it was an unusual and 0:05:30.080 --> 0:05:34.000 extraordinary situation, So he went through all the statutory hoops 0:05:34.560 --> 0:05:39.600 and did not in a formal sense claim unbounded authority 0:05:39.640 --> 0:05:42.279 over tariffs, although as a practical matter, one could certainly 0:05:42.400 --> 0:05:46.680 argue that that's what he took on. Another aspect of 0:05:46.720 --> 0:05:49.919 the decision that might be open to argument would be 0:05:50.279 --> 0:05:52.239 the part of the decision that said that the Trade 0:05:52.279 --> 0:05:54.840 Act of nineteen seventy four, and I didn't mention this 0:05:54.920 --> 0:05:57.880 before the Court of International Trade said that the Trade 0:05:57.880 --> 0:06:02.919 Act of nineteen seventy four, essentially because it was responding 0:06:02.960 --> 0:06:06.880 to the President Nixon import surcharge at the end of 0:06:06.920 --> 0:06:10.919 the gold standard period in the early seventies, and it 0:06:11.000 --> 0:06:15.839 created a statute called the section of the statute called 0:06:15.839 --> 0:06:18.239 the Trade Act of nineteen seventy four. Section one twenty 0:06:18.240 --> 0:06:21.760 two of that statute gives the President very limited authority 0:06:22.480 --> 0:06:27.560 to impose time limited, modest tariffs in response to a 0:06:27.600 --> 0:06:31.200 balance of payments emergency, and the Court of International Trade 0:06:31.240 --> 0:06:34.200 said that by implication, the enactment of section one twenty 0:06:34.200 --> 0:06:38.120 two of the seventy four Act took away the president's 0:06:38.160 --> 0:06:43.480 authority under AEPA to impose tariffs for balance of payments purposes, 0:06:43.760 --> 0:06:47.880 and it interpreted the worldwide and retaliatory tariffs based on 0:06:48.279 --> 0:06:52.800 our trade deficits to be effect in effect, a balance 0:06:52.800 --> 0:06:56.320 of payments measure. So that the argument might be on 0:06:56.360 --> 0:06:58.599 the other side that even if section one twenty two 0:06:58.680 --> 0:07:02.040 does give the president limited authority to deal with balance 0:07:02.080 --> 0:07:06.440 of payments problems, it doesn't necessarily take away the emergency 0:07:06.480 --> 0:07:10.760 authority that might have been contained in IEPA. And then 0:07:10.800 --> 0:07:14.960 I think maybe the hardest issue that might come up 0:07:14.960 --> 0:07:19.320 on appeal for the plaintiffs relates to the trafficking tariffs, 0:07:19.320 --> 0:07:23.680 where the Court ruled that the tariffs on Canada and 0:07:23.720 --> 0:07:27.120 Mexico did not deal with drug trafficking. Rather, they simply 0:07:27.240 --> 0:07:30.560 punished and put pressure on Canada and Mexico to change 0:07:30.600 --> 0:07:34.760 their own behavior. The problem with that thinking, potentially, is 0:07:34.760 --> 0:07:39.640 that the United States for decades has used sanctions to 0:07:39.800 --> 0:07:44.960 try and persuade or coerce, whichever word you prefer our 0:07:45.200 --> 0:07:48.840 counterparties in the world in various situations to change their 0:07:48.840 --> 0:07:52.240 behavior to help the United States. And to say that 0:07:52.280 --> 0:07:57.920 the United States cannot do that under AEPA is perhaps 0:07:58.000 --> 0:08:00.360 at odds with what one might expect it to be 0:08:00.400 --> 0:08:02.840 the construction of So I think that'll be an argument 0:08:02.880 --> 0:08:04.559 that's raised off pel for sure. 0:08:04.920 --> 0:08:07.960 Yeah, I was reading that. You know, some station lawyers 0:08:07.960 --> 0:08:11.320 are concerned because they think that this would take away 0:08:11.560 --> 0:08:15.880 the president's power to use those kinds of pressures to 0:08:16.360 --> 0:08:21.800 get compliance with whatever policy or problem he's trying to address. So, 0:08:22.680 --> 0:08:25.440 in turning now to the other decision, I mentioned the 0:08:25.480 --> 0:08:30.320 District Court's decision of Washington d. C. That court also 0:08:30.360 --> 0:08:34.960 found the tariffs unlawful. Can you explain how that court's 0:08:35.040 --> 0:08:37.480 ruling differed from the International Trade Court's ruling. 0:08:38.600 --> 0:08:44.840 Yes, The key difference was that the DC District Court 0:08:45.160 --> 0:08:48.080 accepted the argument put forward by a number of plaintiffs 0:08:48.440 --> 0:08:53.199 that AIPA does not contain authority for tariffs at all, 0:08:54.200 --> 0:08:58.319 that it simply is a statute about using other kinds 0:08:58.360 --> 0:09:04.400 of measures in emergency situations rather than tariffs, and that 0:09:04.720 --> 0:09:08.720 meant that the case did not have to be transferred 0:09:08.840 --> 0:09:11.880 to the Court of International Trade, which has exclusive jurisdiction 0:09:12.000 --> 0:09:17.240 over disputes arising out of statutes that imposed tariffs and 0:09:17.240 --> 0:09:20.679 so forth. By ruling that AIPA does not allow tariffs 0:09:20.679 --> 0:09:24.400 at all, the Court was able to keep jurisdiction. And 0:09:24.480 --> 0:09:26.920 of course, once you say that AIPA does not those 0:09:27.000 --> 0:09:29.800 tariffs at all or allow the imposition of terifts at all, 0:09:31.320 --> 0:09:33.920 it immediately follows that all of the tariffs imposed by 0:09:33.960 --> 0:09:38.720 the Trump administration, both the worldwide and retaliatory tariffs and 0:09:38.760 --> 0:09:44.000 the trafficking tariffs, are unlawful. So this was a different 0:09:44.000 --> 0:09:48.600 type of decision. The Court emphasized its view that the 0:09:48.640 --> 0:09:52.199 power to regulate is not the power to tax. IIPA 0:09:52.280 --> 0:09:56.680 refers to the regulation or gives the power to regulate 0:09:56.760 --> 0:10:01.240 importation of property in which a foreign national has an interest. 0:10:02.440 --> 0:10:05.480 The court said regulating importation is not the same as 0:10:05.520 --> 0:10:09.840 taxing importation, and went through a lot of historical material 0:10:09.920 --> 0:10:12.160 to argue that the power to regulate is not the 0:10:12.200 --> 0:10:17.280 power to tax, and in the course of that analysis, 0:10:17.320 --> 0:10:20.560 The Court referred to a decision by the Court of 0:10:20.559 --> 0:10:23.000 Customs and Patent Appeals, which is the predecessor to the 0:10:23.000 --> 0:10:27.800 Federal Circuit, in a case called Yoshida, which ruled under 0:10:27.840 --> 0:10:30.160 the Trading with the Enemy Act, which has language more 0:10:30.280 --> 0:10:34.520 or less identical to the AIPA language in terms of 0:10:34.520 --> 0:10:37.719 what the president's authority is. The court said that it 0:10:37.800 --> 0:10:42.000 found the Yoshida decision, which said that the predecessor Act 0:10:42.080 --> 0:10:46.520 did allow tariffs to be unpersuasive, and that it was 0:10:46.559 --> 0:10:50.040 not binding on the District Court at DC in any event, 0:10:50.120 --> 0:10:52.760 because the District Court of DC does not sit underneath 0:10:53.440 --> 0:10:56.600 what is now the Federal Circuit. So that was the 0:10:56.720 --> 0:10:59.320 key difference in the District of DC decision. 0:11:00.000 --> 0:11:03.280 As you said, the District Court found APA doesn't authorized 0:11:03.320 --> 0:11:07.600 terras at all, whereas the International Trade Court said in 0:11:07.640 --> 0:11:12.920 a subsequent order that the word opining on whether AIPA 0:11:13.160 --> 0:11:16.960 categorically allows for terraffs. Do you have any thoughts as 0:11:16.960 --> 0:11:20.160 to why the International Trade Court didn't make a ruling 0:11:20.200 --> 0:11:20.920 on that issue. 0:11:22.760 --> 0:11:26.240 Yeah, I think there are several factors. I mentioned the 0:11:26.880 --> 0:11:31.600 Yoshida decision a moment ago, which was from the Appellate Court, 0:11:31.640 --> 0:11:33.520 to which appeals from what is now the Court of 0:11:33.520 --> 0:11:37.640 International Trade goes. So the Court of International Trade is 0:11:37.720 --> 0:11:41.480 bound by the Yoshida decision, which was not a decision 0:11:41.520 --> 0:11:43.480 under AEPA, as I said, it was a decision under 0:11:43.480 --> 0:11:46.200 the Trading with the Enemy Act. But the statutory language 0:11:46.200 --> 0:11:49.640 of that Act was essentially identical for present purposes to 0:11:49.720 --> 0:11:52.560 the language in AIPA. So the Court might have felt 0:11:52.559 --> 0:11:57.360 that it couldn't go against the prior ruling in Yoshida. Also, 0:11:57.679 --> 0:12:00.920 I mean, it's clear there is a textual argument for 0:12:01.040 --> 0:12:07.319 the government's position, which is that the statute authorizes regulation 0:12:07.520 --> 0:12:12.520 of importation, and certainly a traditional way of regulating imports, 0:12:13.480 --> 0:12:18.000 one might say, is to use tariffs. That's certainly, historically 0:12:18.080 --> 0:12:22.400 the principal way that the United States has controlled the 0:12:22.440 --> 0:12:26.360 flow of importation as practical matter, So the Court might 0:12:26.400 --> 0:12:30.400 have thought that it was a less shaky basis for 0:12:30.440 --> 0:12:33.079 the decision to say that we're not going to decide 0:12:33.120 --> 0:12:36.800 whether AI allows tariffs at all. But even if it does, 0:12:36.920 --> 0:12:40.120 it doesn't allow the broad tariffs that the President has 0:12:40.160 --> 0:12:44.400 imposed here, and indeed such a broad tariff power would 0:12:44.480 --> 0:12:46.920 be a constitutional issue. 0:12:47.080 --> 0:12:48.760 So I was going to ask you this question later, 0:12:48.800 --> 0:12:52.160 but because it's on the topic. You had mentioned that 0:12:52.200 --> 0:12:57.199 the Court was construing regulate the language naip A regulate importation. 0:12:57.760 --> 0:13:00.600 A lot of it has been said about the questions 0:13:00.640 --> 0:13:03.319 doctrine and how that might be used to strike down terrafs. 0:13:03.679 --> 0:13:07.800 Why isn't the regular imports language naive enough to encompass TIFFs? 0:13:07.800 --> 0:13:12.240 And how clear does Congress's statutory authority the authorization need 0:13:12.320 --> 0:13:15.680 to be. Does Congress need to specifically say tariffs in 0:13:15.679 --> 0:13:16.400 the statute? 0:13:16.600 --> 0:13:18.760 I don't know if it has to specifically say tariff's 0:13:18.760 --> 0:13:21.840 in the statute, certainly that would help with the clarity. 0:13:22.360 --> 0:13:24.880 There are a lot of issues beyond just whether or 0:13:24.920 --> 0:13:28.120 not tariffs are authorized. There is a question of how 0:13:28.120 --> 0:13:31.160 long they can remain in effect. If it's an Emergency 0:13:31.240 --> 0:13:33.640 Powers Act, one might have thought that there would be 0:13:34.160 --> 0:13:37.640 some limitation of the authority of the president to act 0:13:38.080 --> 0:13:42.120 to the period of emergency. The Congress didn't speak to that. 0:13:43.320 --> 0:13:47.439 The magnitude of the measures that are being taken, which 0:13:47.520 --> 0:13:50.200 are or far beyond any terifts that the United States 0:13:50.240 --> 0:13:55.440 is imposed in modern times. Congress didn't necessarily speak to 0:13:55.520 --> 0:13:57.880 the question of whether there's any constraint on the magnitude 0:13:57.920 --> 0:14:02.240 of the measures that the president can take. Congress hasn't 0:14:02.280 --> 0:14:04.880 spoken really to the concept of what exactly is a 0:14:04.960 --> 0:14:10.440 national emergency and could a pray deficit be construed as 0:14:10.480 --> 0:14:15.559 a national emergency that gives the president sort of unlimited, unbounded, 0:14:16.200 --> 0:14:19.600 no time limitation, authority to impose tariffs for as long 0:14:19.640 --> 0:14:22.080 as he wants against him ever he wants. So there 0:14:22.080 --> 0:14:23.880 are a lot of ways in which Congress could have 0:14:24.520 --> 0:14:29.040 spoken more clearly here. And I know that there are 0:14:29.040 --> 0:14:32.520 some commentators who think that when this issue finally reaches 0:14:32.560 --> 0:14:36.200 the Supreme Court, that there's a decent chance that the 0:14:36.240 --> 0:14:39.560 major questions doctrine will end up being the key issue. 0:14:39.800 --> 0:14:42.240 So yeah, So it reminds you sort of like my 0:14:42.360 --> 0:14:46.560 first year contract first, your law school contract class, where 0:14:46.720 --> 0:14:48.640 there's like no meeting of the minds that there's not 0:14:48.800 --> 0:14:52.400 enough details in the contract. It sounds like, you know, 0:14:52.560 --> 0:14:56.480 Congress may not have put enough details in the statute. 0:14:56.760 --> 0:14:59.440 So what that leads me to the next question, which is, 0:14:59.600 --> 0:15:02.960 you know, neither the District Court nor the International Trade 0:15:02.960 --> 0:15:06.920 Court addressed whether the trade deficit constituted an emergency or 0:15:06.960 --> 0:15:09.560 the fentanal trafficking for that matter, Do you have any 0:15:09.840 --> 0:15:12.880 thoughts as to why both of those courts declined to 0:15:12.920 --> 0:15:13.880 address that issue. 0:15:14.280 --> 0:15:16.440 Yeah, I mean, I don't know for sure what was 0:15:16.480 --> 0:15:19.080 in their head at the time, but I think it's 0:15:19.120 --> 0:15:24.040 awkward for any court to say we know better what 0:15:24.160 --> 0:15:27.840 constitutes a national emergency than the President of the United States. 0:15:28.840 --> 0:15:32.240 I think there's a very strong instinct to try and 0:15:32.360 --> 0:15:38.120 find another basis for ruling to get the same outcome 0:15:38.240 --> 0:15:41.680 without having to say that we the courts are going 0:15:41.720 --> 0:15:45.400 to second guest the president on the issue of national emergency. 0:15:45.560 --> 0:15:49.320 So the Court of International Trade sort of ducked that 0:15:49.640 --> 0:15:56.720 question in favor of saying that the unbounded delegation would 0:15:56.880 --> 0:15:59.960 run a foul of constitutional concerns and therefore will construe 0:16:00.160 --> 0:16:03.480 the statute not to do that, And the District Court 0:16:03.560 --> 0:16:06.240 duct the issue by finding that tariffs are not allowable 0:16:06.280 --> 0:16:09.960 at all, So it wasn't necessary to address the question 0:16:10.000 --> 0:16:13.800 of whether there's a bona fide emergency. When I said 0:16:13.840 --> 0:16:15.960 earlier that I agreed with the result in the case, 0:16:16.040 --> 0:16:18.360 I think the reason that I agree with it is 0:16:18.400 --> 0:16:21.840 precisely though, because I think that at least with respect 0:16:21.840 --> 0:16:25.800 to the worldwide and retaliatory tariffs, putting the fentanel issue 0:16:25.800 --> 0:16:32.360 to the side. It is almost absurd to call bilateral 0:16:32.520 --> 0:16:36.760 merchandise trade deficits a national emergency. We've had them since 0:16:36.800 --> 0:16:41.080 the beginning of trade. We've had aggregate trade deficits for 0:16:41.120 --> 0:16:44.320 the last half century. We will probably continue to have 0:16:44.400 --> 0:16:46.240 them for the next half century, as long as the 0:16:46.320 --> 0:16:49.360 United States has a greater need for capital than the 0:16:49.440 --> 0:16:54.920 national savings provides. It is a mathematical necessity that we 0:16:55.000 --> 0:16:58.240 run a trade deficit to finance the importation of capital. 0:16:58.320 --> 0:17:00.920 So to call something that's on the scale of a 0:17:01.000 --> 0:17:07.320 century and an emergency is almost absurd to any economically 0:17:07.840 --> 0:17:11.000 literate person, I think, but it's hard for a court 0:17:11.080 --> 0:17:15.760 to say that the courts are not economists. The legal 0:17:15.800 --> 0:17:20.160 authority to review the presidential decisions is not an authority 0:17:20.200 --> 0:17:23.800 to judge them for sound economic policy. And so both courts, 0:17:23.800 --> 0:17:27.560 I think we're looking for other grounds to reach what 0:17:28.280 --> 0:17:30.680 is clearly the right outcome here, which is to say, 0:17:30.720 --> 0:17:34.200 this is not an emergency situation, and the Congress needs 0:17:34.200 --> 0:17:36.320 to weigh in if we're going to impose this kind 0:17:36.320 --> 0:17:38.000 of change in American trade policy. 0:17:39.119 --> 0:17:41.520 So do you think that the Supreme Court would try 0:17:41.560 --> 0:17:44.080 to avoid that issue as well. 0:17:44.400 --> 0:17:47.399 I don't know. I mean, I think there's sort of, 0:17:48.880 --> 0:17:50.919 you know, the kind of four ways to decide this 0:17:51.040 --> 0:17:53.919 case against the administration. One is to say AIPA doesn't 0:17:54.160 --> 0:17:59.919 allow tariffs. One is to say that it if it 0:18:00.160 --> 0:18:02.600 or to allow the extent of tariffs that the administration 0:18:02.800 --> 0:18:06.600 claims that it's somehow unconstitutional, either under the old non 0:18:06.720 --> 0:18:09.720 delegation doctrine, which has been moribund since the New Deal, 0:18:10.760 --> 0:18:14.479 or under the newer major Questions doctrine. And the final 0:18:14.520 --> 0:18:16.199 thing would be to say that there's not really an 0:18:16.240 --> 0:18:18.560 emergency here, which I think is really the correct thing 0:18:18.600 --> 0:18:21.880 to say. That's the real reason why this is why 0:18:21.920 --> 0:18:27.760 this action by President Trump is unacceptable. But the Supreme Court, well, 0:18:28.200 --> 0:18:30.600 I wouldn't be at all surprised if it finds an 0:18:30.640 --> 0:18:35.000 alternative way to rule, assuming the rules against the president. 0:18:35.280 --> 0:18:37.119 I wouldn't be surprised if it was not on the 0:18:37.160 --> 0:18:41.320 basis of whether there's a genuine national emergency, but rather 0:18:41.440 --> 0:18:44.280 on one of these other bases. And I'll just add, 0:18:44.280 --> 0:18:47.000 by the way that I think it would be very 0:18:47.040 --> 0:18:49.840 difficult to rule against the government on the ground that 0:18:50.080 --> 0:18:54.120 a fentanyl issue is not a national emergency. We've had 0:18:54.160 --> 0:18:59.199 thousands of people die from fentanyl poisoning, and that I 0:18:59.200 --> 0:19:03.439 think it is very difficult to say could not be 0:19:03.560 --> 0:19:06.800 reasonably viewed as a national emergency. So the court, if 0:19:06.800 --> 0:19:10.880 it wants to knock out the fentanyl related tariffs, probably 0:19:10.920 --> 0:19:14.040 has to find some other legal grounds. 0:19:13.640 --> 0:19:19.280 Right, And so the courts, the lower courts, finding that 0:19:19.359 --> 0:19:23.000 the terroiffs didn't deal with that emergency sort of avoided 0:19:24.200 --> 0:19:26.840 them having to say that that was not an emergency, 0:19:27.119 --> 0:19:30.840 because I think most commentators agree that it is. So. 0:19:31.600 --> 0:19:36.000 Just yesterday, which was June tenth, the Federal Circuit Court 0:19:36.040 --> 0:19:38.840 of Appeals made an important ruling. So, just as you 0:19:38.920 --> 0:19:42.720 know background, the Federal Circuit Court of Appeals is the 0:19:42.760 --> 0:19:45.879 appellate court that hears appeals from the international Trade courts ruling. 0:19:46.240 --> 0:19:49.480 It had entered an administrative stay of the International Trade 0:19:49.520 --> 0:19:52.919 Court's ruling on May twenty nine, and that resulted in 0:19:52.960 --> 0:19:56.439 the terraffs being reinstated, And just yesterday, on June tenth, 0:19:57.000 --> 0:20:00.639 that court entered a longer stay, saying the ruling the 0:20:00.680 --> 0:20:03.159 lower court ruling will be on hold until the appeal 0:20:03.160 --> 0:20:05.439 has decided on the merits, so the terrorists will be 0:20:05.480 --> 0:20:07.840 in e fact at least until the appeal has decided. 0:20:08.280 --> 0:20:11.440 Do you think that the Federal Circuit Court's June tenth 0:20:11.480 --> 0:20:14.000 continuation of the stay of the lower court's ruling Penny 0:20:14.040 --> 0:20:16.800 appeal is any indication of how it will rule on 0:20:16.840 --> 0:20:17.360 the merits. 0:20:18.680 --> 0:20:24.200 I don't think it's any definitive indication at all. I 0:20:24.200 --> 0:20:27.359 think what it means, if anything, is that the court 0:20:27.480 --> 0:20:32.680 sees that there are serious arguments on both sides, and 0:20:32.880 --> 0:20:35.879 it's not certain yet how it's going to rule perhaps, 0:20:36.119 --> 0:20:40.960 and therefore it makes sense to stay the lower court 0:20:41.000 --> 0:20:46.280 decision so as not to temporarily distrut disrupt the president's 0:20:46.480 --> 0:20:50.000 trade policy agenda. If indeed, in the end, the conclusion 0:20:50.080 --> 0:20:51.919 is that the president has the power to do what 0:20:52.000 --> 0:20:56.919 he's doing. So I wouldn't infer from the extension of 0:20:56.960 --> 0:21:00.439 the stay that the Federal Circuit has more made up 0:21:00.440 --> 0:21:02.920 its mind in favor of the administration. I think that's 0:21:03.200 --> 0:21:06.800 probably an unwarranted speculation, right. 0:21:06.880 --> 0:21:10.320 So the other question that I forgot to ask you, 0:21:10.480 --> 0:21:16.160 was they the full circuit the full panels, So it's 0:21:16.200 --> 0:21:18.359 going to hear this appeal. So it's called an on 0:21:18.520 --> 0:21:23.119 bank hearing, and that's you know, usually not done. Usually 0:21:23.119 --> 0:21:26.679 there's a three judge panel. Was that surprising to you 0:21:26.720 --> 0:21:28.960 at all that they decided to have an on bank hearing? 0:21:29.480 --> 0:21:33.480 No, I mean on bank decisions are You're quite correct 0:21:33.480 --> 0:21:35.879 to say that they're not common, but they do happen, 0:21:35.920 --> 0:21:39.399 and they they are put together usually in matters of 0:21:39.440 --> 0:21:42.399 particular importance, and this is this is a matter of 0:21:43.040 --> 0:21:46.560 quite extraordinary importance. It's a it's a kind of remaking 0:21:46.640 --> 0:21:54.120 of US trade policy, Uh, without congressional oversight by a president. 0:21:55.119 --> 0:21:59.240 He's you know, decided to go against the statutes that 0:21:59.320 --> 0:22:02.760 set tariffs, passed by Congress and signed by prior presidencies, 0:22:03.720 --> 0:22:08.600 abrogated essentially every international trade agreement that we have, both 0:22:08.600 --> 0:22:11.720 on a multilateral scale with the WTO and all of 0:22:11.800 --> 0:22:16.520 our bilateral free trade agreements. And it's hard to think 0:22:16.520 --> 0:22:19.960 of a case in the Federal Circuit in recent years 0:22:20.040 --> 0:22:23.040 that's been more consequential than this. So it doesn't surprise 0:22:23.080 --> 0:22:24.840 me at all that they decided to hear the case 0:22:24.880 --> 0:22:26.000 on bok okay. 0:22:26.160 --> 0:22:30.119 And then the District court decision is also being appealed 0:22:30.680 --> 0:22:33.640 to the d C Circuit Court of Appeals. I wonder 0:22:33.720 --> 0:22:36.760 if that will be on bank also, I don't know. 0:22:38.480 --> 0:22:42.720 It's a narrower decision. As you know, the District Court 0:22:42.840 --> 0:22:46.800 in Washington, d C. Simply and joined the application of 0:22:46.880 --> 0:22:50.639 tariffs to the plainness in that case. So it's not 0:22:50.840 --> 0:22:54.920 nearly as sweeping a decision. And I would imagine the 0:22:55.000 --> 0:22:58.600 d C Circuit might think to itself that this on 0:22:58.760 --> 0:23:01.560 bank decision of the Federals is probably going to be 0:23:02.240 --> 0:23:05.080 the way that the case gets to the Supreme Court, 0:23:05.200 --> 0:23:08.080 if it's going to get there at all. So maybe 0:23:08.160 --> 0:23:10.679 it's not necessary to have an on bank proceeding in 0:23:10.720 --> 0:23:11.680 the DC Circuit. 0:23:12.240 --> 0:23:17.520 Who knows, Yeah, that makes sense. So there's a divergence 0:23:17.560 --> 0:23:20.600 in court opinions about whether the International Trade Court has 0:23:20.640 --> 0:23:24.680 exclusive jurisdiction to hear these cases. The International Trade Court 0:23:24.720 --> 0:23:27.880 said yes, The California Federal Court recently said yes and 0:23:27.920 --> 0:23:31.919 dismissed a case that was brought there that's currently on appeal. 0:23:31.960 --> 0:23:35.480 And then the District Court said no, said IPA doesn't 0:23:35.480 --> 0:23:38.600 authorize terrorists at all. So the Court of International Trade 0:23:38.680 --> 0:23:41.400 is not an exclusive jurisdiction. Which court do you think 0:23:41.440 --> 0:23:41.960 got it right? 0:23:42.680 --> 0:23:45.240 You know, it really turns on it turns on the 0:23:45.320 --> 0:23:48.880 decision on the merits. As the District Court pointed out 0:23:49.000 --> 0:23:52.560 as to whether or not APUA allows for terrorists at all. 0:23:52.800 --> 0:23:56.320 It's pretty clear in the jurisdictional statute for the Court 0:23:56.359 --> 0:24:00.439 of International Trade that if we have a dispute rising 0:24:00.520 --> 0:24:04.840 out of a statute that allows for the imposition of tariffs, 0:24:05.400 --> 0:24:08.639 then the Court of International Trade does have exclusive jurisdiction. 0:24:09.359 --> 0:24:12.240 So it really is a question of whether AIPA allows 0:24:12.280 --> 0:24:16.280 tariffs at all. The District Court said no and therefore 0:24:16.600 --> 0:24:22.440 kept jurisdiction. Other courts have read aip but to authorize tariffs, 0:24:22.520 --> 0:24:25.040 or at least arguably to authorize tariffs, and thought then 0:24:25.040 --> 0:24:30.160 that the Court of International Trade should resolve the issue. Ameke, 0:24:30.200 --> 0:24:33.640 This brief I signed includes a section arguing that AIPA 0:24:33.720 --> 0:24:35.879 does not authorize tariffs, and so I'm not going to 0:24:35.880 --> 0:24:38.880 say anything that would conflict with that, but I think 0:24:38.880 --> 0:24:43.640 that's where the battle is joined on who has jurisdiction right. 0:24:44.640 --> 0:24:47.960 So inevitably these cases are likely destined for the Supreme Court. 0:24:48.200 --> 0:24:50.400 How do you think the Supreme Court justices will rule 0:24:50.440 --> 0:24:54.280 on these cases, both on a potential appeal of the 0:24:54.920 --> 0:24:59.840 lower court decision to continue to stay and on the merits. 0:25:00.200 --> 0:25:03.320 Well, my guess is that Supreme Court would not interfere 0:25:03.359 --> 0:25:07.200 with the stay pending the expedited on bank appeal at 0:25:07.200 --> 0:25:12.040 the Federal Circuit. As far as the ultimate ruling on 0:25:12.080 --> 0:25:17.960 the merits is concerned, you know, it's always difficult to 0:25:18.320 --> 0:25:23.880 rule against the president in the exercise of emergency powers. 0:25:25.480 --> 0:25:29.400