SCOTUS Catch-all | Tariff Day
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Because it’s too stressful for a president to have to worry about committing crimes.
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A few observations reading the transcript:
1. Every one of the female Justices seemed to regard the SG (Sauer) as an asshole, even commenting on it at times. I didn't listen but if this guy was Steven Cheung with a bar admission, it would not surprise me.
2. My best prognostication is 6-3 or 7-2. Roberts + the liberals would uphold the lower court based on the statute alone. Gorsuch and Kav will use this an opportunity for non-delegation mischief. Alito and Thomas in dissent. I think Barrett writes separately. The majority opinion will probably be to the liberals' disliking but that will be the price of getting to 5, which is important to them so Kav/Gorsuch concurrence won't be "controlling" (the concept of a controlling concurrence is an abomination and yet it exists, cf. Bakke). It's possible Kav could join the majority as well. Barrett was hard to read and could go either way.
Barrett is on a textualist kick right now, doing a bunch of media about her book and her three rules of statutory interpretation: 1. Read the statute; 2. Read the statute and so on. Of course, that's not what she does in practice but she might take this opportunity to burnish her credentials.
3. Alito was pathetic even by his boot-licking standards. One wonders if he will actually follow-through on his extraordinary hypo based reasoning.
4. Keep in mind that the default probability is 90% Trump favored. So even with evidence that it might go the other way, it's hard to be too confident. If this was Biden, it would be 100% uphold the lower court and strike the tariffs. Because it's Trump, who knows.
5. Katyal is usually an outstanding oral advocate but he fucked up and it could be very consequential. Kav wanted to know why Congress would have allowed the president to embargo a foreign country -- i.e. reduce trade to zero -- but not the less severe remedy of a tariff. Isn't a tariff a lesser included power, he asked.
Katyal's answer was wrong and unsatisfactory: even Kagan noted that the distinction between "revenue raising" (i.e. a tariff) and a market exclusion doesn't make any sense, and is conceptually difficult to parse. Quotas have similar economic effects, so why would they be different? I was pulling my hair out reading the transcript on this point.
The actual answer is threefold -- which I will preface by saying that it's not necessarily in the legislative history, but the background of trade law should make it clear.
A. The statute was passed when everyone in Congress cared about honoring treaties, and especially GATT because it was the most massive of all treaties. Literally millions of man-hours went into its negotiation over the 30 years prior to 1977. So Congress would have wanted to disrupt GATT as little as possible.
GATT Article XX creates some policy-related exceptions to free trade. For instance, a country may restrict trade for environmental reasons (famously the US banned imported shrimp caught by nets without turtle excluding devices), to protect archaeological sites, conservation of natural resources, etc. Crucially, Article XX only makes an exception to the rule of national treatment, not to tariffs. So trade restrictions like embargoes and quotas can be justified; tariffs never. That makes sense because of all the time and effort that went into the harmonized trade schedules (worldwide, hundreds of millions of man-hours I would imagine).
So while the emergency authority doesn't neatly map onto Article XX, in general GATT treats tariffs as the baseline, as the "don't fuck with this under any circumstances" (or as few circumstances as possible). Other restrictions are favored. And if Congress wanted not to piss off other countries, it would make sense to exclude tariffs from the powers granted to the president even if quotas or embargoes are included.
B. It is a basic regulatory policy principle that the remedy can control the frequency of the conduct. For instance, think red cards in soccer; because a red card is such a severe remedy, refs are reluctant to hand them out even when deserved. And so too with this. Congress gave the president only the bluntest tools with the idea that he would be disincentivized to use them. Think about it like this. Suppose the president wants to lash out at Europe. He might put a trade embargo, but that would be extremely unpopular! It had better be a real emergency, or Congress would override in a heartbeat (or so thought the 1970s Congress). Quotas are a little less severe, but it's still a big restriction in the short-term.
Tariffs, by contrast, are easy to abuse. The president declares an emergency, slaps a 5% tariff on stuff, and nobody really cares that much. Congress won't necessarily stick its head out for that level of effect. Everyone just lives with it, and then it becomes economic policy. Because once a 5% tariff is added, it's hard to get rid per public choice theory. The public's interest in such a policy is low; special interest groups' interest is very high, and those special interests would fight tooth and nail not to let the 5% go away.
C. Relatedly, tariffs are easy to hide. This actually goes to Kav's question and it's remarkable he asked it. He's just not that bright. Maybe it's the beer. He said, "why would the president be able to embargo a whole country but not put a 1% tariff?" The question answers itself. An embargo will be noticed, and thus the decision will be politically salient. Maybe people do agree that we should exclude Israel's products from the US market until they stop the genocide; or maybe the people don't care enough to be deprived of cheap generic drugs. Either way, it will be a huge campaign issue. A 1% tariff, on the other hand, is barely noticeable. And then another 1% and another and pretty soon we've boiled the frog.
So a Congress that is intent on protecting its regulatory power would absolutely restrict the tariff authority.
6. It is really a sad commentary on the Court that the Justices didn't know the answer. Breyer would have; too bad he's not there. This has multiple dimensions. First, the justices and their clerks undoubtedly know almost nothing about trade law, if not literally nothing. It's not an issue that is on the "clerk and then be appointed" track. Trade disputes go to the Federal Circuit, so they wouldn't see them as appellate judges. It's a specialized field. But if the Supreme Court is going to be Supreme -- I mean, they really should understand GATT. Even if the case doesn't raise it, but it does.
But even that doesn't account for the failure to comprehend points B and C. In my view and experience, those would be issues that the clerks might bring to the judges' attention (that's how it worked when I was clerking). The clerks are closer to law school and probably remember things like trade law (if they happened to take that class) or regulatory policy as discussed in 1L courses on regulation. But today's clerks are not what they used to be. They are selected ideologically (talk about DEI) and not because they are knowledgeable or even all that smart.
And to be honest, Katyal fucked up. So did the state AG who followed. That is something he should have known. If it occurred to me in real time, it should have occurred to him. Oh well. Let's hope it doesn't cost us the case.
7. I never withdrew from my position as supreme court counsel so I feel an odd obligation to make this post.
1. Every one of the female Justices seemed to regard the SG (Sauer) as an asshole, even commenting on it at times. I didn't listen but if this guy was Steven Cheung with a bar admission, it would not surprise me.
2. My best prognostication is 6-3 or 7-2. Roberts + the liberals would uphold the lower court based on the statute alone. Gorsuch and Kav will use this an opportunity for non-delegation mischief. Alito and Thomas in dissent. I think Barrett writes separately. The majority opinion will probably be to the liberals' disliking but that will be the price of getting to 5, which is important to them so Kav/Gorsuch concurrence won't be "controlling" (the concept of a controlling concurrence is an abomination and yet it exists, cf. Bakke). It's possible Kav could join the majority as well. Barrett was hard to read and could go either way.
Barrett is on a textualist kick right now, doing a bunch of media about her book and her three rules of statutory interpretation: 1. Read the statute; 2. Read the statute and so on. Of course, that's not what she does in practice but she might take this opportunity to burnish her credentials.
3. Alito was pathetic even by his boot-licking standards. One wonders if he will actually follow-through on his extraordinary hypo based reasoning.
4. Keep in mind that the default probability is 90% Trump favored. So even with evidence that it might go the other way, it's hard to be too confident. If this was Biden, it would be 100% uphold the lower court and strike the tariffs. Because it's Trump, who knows.
5. Katyal is usually an outstanding oral advocate but he fucked up and it could be very consequential. Kav wanted to know why Congress would have allowed the president to embargo a foreign country -- i.e. reduce trade to zero -- but not the less severe remedy of a tariff. Isn't a tariff a lesser included power, he asked.
Katyal's answer was wrong and unsatisfactory: even Kagan noted that the distinction between "revenue raising" (i.e. a tariff) and a market exclusion doesn't make any sense, and is conceptually difficult to parse. Quotas have similar economic effects, so why would they be different? I was pulling my hair out reading the transcript on this point.
The actual answer is threefold -- which I will preface by saying that it's not necessarily in the legislative history, but the background of trade law should make it clear.
A. The statute was passed when everyone in Congress cared about honoring treaties, and especially GATT because it was the most massive of all treaties. Literally millions of man-hours went into its negotiation over the 30 years prior to 1977. So Congress would have wanted to disrupt GATT as little as possible.
GATT Article XX creates some policy-related exceptions to free trade. For instance, a country may restrict trade for environmental reasons (famously the US banned imported shrimp caught by nets without turtle excluding devices), to protect archaeological sites, conservation of natural resources, etc. Crucially, Article XX only makes an exception to the rule of national treatment, not to tariffs. So trade restrictions like embargoes and quotas can be justified; tariffs never. That makes sense because of all the time and effort that went into the harmonized trade schedules (worldwide, hundreds of millions of man-hours I would imagine).
So while the emergency authority doesn't neatly map onto Article XX, in general GATT treats tariffs as the baseline, as the "don't fuck with this under any circumstances" (or as few circumstances as possible). Other restrictions are favored. And if Congress wanted not to piss off other countries, it would make sense to exclude tariffs from the powers granted to the president even if quotas or embargoes are included.
B. It is a basic regulatory policy principle that the remedy can control the frequency of the conduct. For instance, think red cards in soccer; because a red card is such a severe remedy, refs are reluctant to hand them out even when deserved. And so too with this. Congress gave the president only the bluntest tools with the idea that he would be disincentivized to use them. Think about it like this. Suppose the president wants to lash out at Europe. He might put a trade embargo, but that would be extremely unpopular! It had better be a real emergency, or Congress would override in a heartbeat (or so thought the 1970s Congress). Quotas are a little less severe, but it's still a big restriction in the short-term.
Tariffs, by contrast, are easy to abuse. The president declares an emergency, slaps a 5% tariff on stuff, and nobody really cares that much. Congress won't necessarily stick its head out for that level of effect. Everyone just lives with it, and then it becomes economic policy. Because once a 5% tariff is added, it's hard to get rid per public choice theory. The public's interest in such a policy is low; special interest groups' interest is very high, and those special interests would fight tooth and nail not to let the 5% go away.
C. Relatedly, tariffs are easy to hide. This actually goes to Kav's question and it's remarkable he asked it. He's just not that bright. Maybe it's the beer. He said, "why would the president be able to embargo a whole country but not put a 1% tariff?" The question answers itself. An embargo will be noticed, and thus the decision will be politically salient. Maybe people do agree that we should exclude Israel's products from the US market until they stop the genocide; or maybe the people don't care enough to be deprived of cheap generic drugs. Either way, it will be a huge campaign issue. A 1% tariff, on the other hand, is barely noticeable. And then another 1% and another and pretty soon we've boiled the frog.
So a Congress that is intent on protecting its regulatory power would absolutely restrict the tariff authority.
6. It is really a sad commentary on the Court that the Justices didn't know the answer. Breyer would have; too bad he's not there. This has multiple dimensions. First, the justices and their clerks undoubtedly know almost nothing about trade law, if not literally nothing. It's not an issue that is on the "clerk and then be appointed" track. Trade disputes go to the Federal Circuit, so they wouldn't see them as appellate judges. It's a specialized field. But if the Supreme Court is going to be Supreme -- I mean, they really should understand GATT. Even if the case doesn't raise it, but it does.
But even that doesn't account for the failure to comprehend points B and C. In my view and experience, those would be issues that the clerks might bring to the judges' attention (that's how it worked when I was clerking). The clerks are closer to law school and probably remember things like trade law (if they happened to take that class) or regulatory policy as discussed in 1L courses on regulation. But today's clerks are not what they used to be. They are selected ideologically (talk about DEI) and not because they are knowledgeable or even all that smart.
And to be honest, Katyal fucked up. So did the state AG who followed. That is something he should have known. If it occurred to me in real time, it should have occurred to him. Oh well. Let's hope it doesn't cost us the case.
7. I never withdrew from my position as supreme court counsel so I feel an odd obligation to make this post.
