Trump Tariffs Teetering on Extinction

Ultimately, Donald Trump is the person who began the weakening of the Justice Department in his first presidency. I'm Preet Bharara. In this week, investigative reporters Carol Lennig and Aaron Davis join me to discuss their new book, Injustice, How Politics and Fear Vanquished America's Justice Department. The episode is out now. Search and follow Stay Tuned with Preet.

wherever you get your podcasts. Hey everyone, Ellie here, wishing you a happy Friday. I want to start off this week on two positive notes, both of them relating to the oral argument in the Supreme Court that happened on Wednesday in the tariff case. Now, maybe some of you or many of you listened to this. I was helping cover it live for CNN, and I had two sort of really positive thoughts. First of all...

It's good that we do this, that we actually can listen live to the audio, not yet the video, but the audio. of US Supreme Court arguments. And remember, this is a recent phenomenon. The court only started doing this during COVID, so five years ago or so. It was long overdue.

And it's just a good thing for our government and our public that we can see the justice – well, sorry, not see, hear the justice process at work. Second of all, listening to these arguments, it just occurred to me – that this is one of the few remaining places in our public life, in our government, where you can witness... deeply substantive, thoughtful exchange of ideas. Not everyone's perfect. Some of the questions maybe were...

Intended to get you on the lawyers. That's sort of fair play. Maybe once or twice the lawyers went a little off from what other legal folks thought they should have done. But by and large, this was incredibly high level. Smart. penetrating, insightful questions from the justices, challenging questions from the justices and brilliant.

Also insightful, I think thoughtful and honest responses from the advocates who are all superb. So how often do we get that kind of exchange? I mean, there's no attacking. There's no personal. rhetoric. There's no ad hominem. There's, you know, a little bit of humor, but there's no sarcasm and cynicism. It's just sort of good government the way that...

the founders or beyond that, before that, would have envisioned it. It's a deeply analytical and substantive exchange of ideas and challenging of ideas. And that's how we should resolve things. Two good notes. I'm not telling you the Supreme Court's perfect, folks, by the way. I'm just telling you it's a good exercise and it's something that...

is worth reflecting on and being positive about. Okay, now onto the arguments themselves. That's going to be the subject of this week's podcast. I will give you what I thought, what I think is going to happen. Interested to hear, as always, your reactions. So let us know. at lettersatcafe.com. Donald Trump declared last week on 60 Minutes that the legal dispute over his tariffs presents, quote, the most important subject discussed by the Supreme Court in 100 years, end quote.

Now, I'm more of a Brown v. Board of Education proponent, but personal preferences can vary. The president then posited on social media that the tariff case, quote, is literally life or death. for our country, end quote. Everyone's going to live, but yes, there's a lot at stake. And based on oral arguments in the Supreme Court on Wednesday, Trump's tariffs, as presently constructed, are teetering on extinction.

The justices spent nearly three hours questioning Solicitor General John Sauer, representing the Trump administration, former acting Solicitor General Neil Katyal, representing a group of private businesses who opposed the tariffs, and Oregon Solicitor General.

General Benjamin Guttman, speaking for 12 Democratic-led states. While the arguments got dense and weedy at times, we can identify two key takeaways. First. The court's three liberals, Justices Elena Kagan, Sonia Sotomayor, and Ketanji Brown-Jackson, are locked in against Trump. This wasn't tough to anticipate. We talked about it last week. And their questioning at oral argument confirmed that they will vote as a block to strike down the tariffs.

We talked last week about the major questions doctrine, which holds that where Congress intends to give the president powers of vast economic or political consequence, it must say so explicitly in a law. and has not here. Well, the liberals appeared to relish the chance to turn that major questions doctrine around back on conservatives who used it recently to strike down Democratic initiatives, including Joe Biden's student loan relief program.

Now, we can't always draw conclusions from the fact that a particular justice asked a specific question. Sometimes they ask rhetorically or to expose a weakness in an opposing viewpoint. But none of the liberal justices gave any remote indication. of support for the Trump administration's position.

Justice Kagan, for example, expressed exasperation with Trump's habitual overuse of emergency statutes like the International Emergency Economic Powers Act, the IEPA, which he invoked to justify the tariffs. Justice Kagan said, quote, we've had cases recently which deal with the president's emergency powers, and it turns out we're in emergencies everything, all the time, about like half the world, end quote.

Justice Sotomayor left little to the imagination. She said, quote, I just don't understand this argument. 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. End quote. If the tariffs are in fact construed as taxes, they're almost certainly unconstitutional if imposed by the executive branch.

And Justice Jackson minced no words. Quote, it's pretty clear that Congress was trying to constrain the emergency powers of the president in IEPA, end quote. There's no give here. Count three votes against Trump. Now to the second and more important overarching takeaway. At least three justices in the court's conservative middle seemed dubious about the administration's position.

Justice Amy Coney Barrett voiced skepticism of the scope of the tariffs. She asked of Sauer, the Solicitor General, is it your contention that every country needed to be tariffed because of the threats to the defense and industrial base? I mean, Spain? France, end quote. And she noted that no prior president has used the IEPA to impose tariffs of any kind.

Chief Justice John Roberts concurred, noting that the law, quote, had never before been used to justify tariffs. No one has argued that it does until this particular case, end quote. Roberts, like Sotomayor, referred to the tariffs as, quote, quote, taxes on Americans. And Justice Neil Gorsuch pointedly called Trump's position, quote, a one way ratchet.

toward the gradual but continual accretion of power in the executive branch and away from the people's elected representatives, end quote. Consider that quote again and remember that it's Neil Gorsuch, not Elena Kagan or Sonia Sotomayor who said it. If you're skeptical about the possibility

Consider the typical party affiliations have not held in the lower trial and appeals courts here. Federal judges appointed to the bench by Ronald Reagan, George H.W. Bush and Trump himself found the tariffs unconstitutional while two dissent. Obama appointees would have upheld the president's actions. This case likely will not yield the foregone six to three conservative to liberal conclusion that we've seen from this court on other major cases.

If the court does strike down the tariffs, major consequences follow. First, Trump's Worldwide Liberation Day tariffs would end. Trump doomed said during his 60 Minutes interview that in that event, quote, I think our economy will go to hell, end quote. But financial experts and conservative politicians alike have posited to the contrary, that a ruling rejecting the tariffs would actually bolster.

the economy. Indeed, financial markets seemingly expect a Trump administration loss. As oral arguments proceeded on Wednesday morning, the Dow Jones Industrial Average gained 290 points, about 0.6 percent, while the S&P 500 and the Nasdaq composite gained 0.8% and 1.2% respectively. The index that tracks small businesses, which have suffered acutely because of the tariffs. increased by 1.6% during the few hours of oral argument.

Financial institutions are not legal experts, of course, and even legal experts can't confidently make a prediction. And yes, markets can rise for any number of reasons. But the trend was uniform and pointed. It's one indicator from smart people with a lot. Meanwhile, American importers, who through late September had paid a total of over $90 billion in tariffs directly to the U.S. government.

Well, they might seek repayment, though that issue could remain unresolved pending further legal wrangling. Contrary to the common suggestion by Trump and others, by the way, foreign countries do not pay tariffs. American businesses do, and they often pass those. Justice Barrett noted that a refund process could get messy, and she's right.

But plenty of the court's decisions have faced difficulty in implementation. See Brown versus Board of Education, for example. Desegregation was not exactly a breeze. The court also might strike down the tariffs moving forward, but rule that money already paid need. We should know soon or soon-ish how the court rules. Typically, the justices issue their most important decisions at the end of the term in May or June.

But here the parties requested and the court granted an expedited schedule for briefing and argument, an acknowledgement by all involved of the stakes of the outcome and the need for certainty. The issues here are too momentous and too complex to realistically expect a ruling in the next few weeks, but it also seems likely that we'll know one way or the other by around the new year. Based on the justices questioning this week,

Trump should prepare for an unwelcome result. Thanks for listening, everyone. Stay safe and stay informed.