Lewis Leibowitz on tariffs, trade, and the Supreme Court’s pending ruling on IEEPA: interview

In an interview with Fastmarkets on December 9, Washington-based trade attorney Lewis Leibowitz spoke about trade, tariffs, and what the pending IEEPA ruling could mean for those in the steel industry.

Earlier this year, the Trump administration imposed tariffs under the International Emergency Economic Powers Act (IEEPA) on Canada, Mexico and China, citing concerns that these nations were not doing enough to stem fentanyl shipments into the US.

President Donald Trump later expanded the use of IEEPA by introducing “reciprocal” tariffs on several trade partners, aiming to counter trade practices and deficits he considered unfair.

Lower courts ruled that tariffs brought under the statute exceeded the president’s authority, which prompted the administration to appeal the case to the Supreme Court. The High Court heard oral arguments on the case on November 5.

Q. What does the Supreme Court’s ruling in the IEEPA case mean for executive authority in trade matters?

A. Well, it is potentially a big deal. It’s fair to say, I think the Supreme Court justices were skeptical about the breadth of President Trump’s action. In my own personal view, and I actually attended the arguments myself, [I get the sense] that the tariffs under IEEPA [may or may not be] entirely struck down. But I don’t think they’re going to survive intact. That’s my own personal view. I could be wrong. I assume that opinions are currently being written and that the decision is going to come out fairly soon.

What the IEEPA tariffs are, of course, are the reciprocal tariffs and the fentanyl tariffs. The reciprocal tariffs were based on the idea that tariffs that are imposed on US exports were higher than tariffs that we impose on imports. And that has been the case for many, many years.

[Trump also] declared an emergency and then asserted the authority to impose tariffs of any duration, of any magnitude for as long as he wants. And that is what is before the Supreme Court now. Lower courts have ruled in this case that the president does not have the authority to levy tariffs at all under IEEPA. It gives him the power to regulate imports. The literal wording really doesn’t go much beyond import transactions.

I think the plaintiffs in this case, the private industries and the states [that brought the lawsuit] have the better argument in that the wording [in the statute] doesn’t necessarily permit the imposition of tariffs, even though it does permit an embargo, a complete cessation of trade, if that addresses the emergency. Then the next question is whether there’s an emergency. And the statute defines an emergency in a way that’s different and a little more restrictive than most national emergency statutes.

[Trump] declared two emergencies. One, he declared an emergency with respect to imports of fentanyl that applied principally to Canada, Mexico and China. He also declared an emergency with respect to trade deficits which we’ve had since 1971.

The Court of Appeals, for example, said the tariffs aren’t allowed. [The administration can’t issue tariffs] under the statute. They didn’t have to reach the issue of whether there was really an emergency or not. And courts have historically not been very happy to second guess the president on the declaration of an emergency.

We’ll see what happens. I think that [the IEEPA] tariffs are in danger.

Q. Some in the US steel industry are wondering how the IEEPA ruling will affect their business. What practical changes – if any – might they expect once the decision is handed down?

A. [When it comes to steel,] the tariffs that the president declared under IEEPA don’t apply if there’s some other tariff, like a 232 tariff. Now, most steel products and their derivatives are subject to section 232 tariffs, and those tariffs are not in play in this case.

So, the change for people that are in the steel business, if there is a demise in the IEEPA tariffs, [that decision] would be limited because the Section 232 tariffs preclude the imposition of IEEPA tariffs.

Q. If the IEEPA tariffs are struck down, do you expect new litigation challenging the expanded coverage under Section 232, such as the August expansion that included steel and aluminium derivatives?

A. Well, as I always tell my clients, if they ask me if they can sue, I say, sure, you can sue. You may not win, but you can sue. There was one case that the Supreme Court had that did deal with Section 232. It is relevant to the 232 tariffs now, but it dealt with imposing import restrictions in the form of license requirements and [that case] went all the way to the Supreme Court in 1976. The Supreme Court ruled that the president is within his power to use licensing as a way to regulate imports under section 232.

That’s not an issue. Licensing is not an issue. It tariffs that were the issue. But I think the wording in section 232 [says] the president can adjust imports rather than regulate them. And that may seem like a quibble, but to lawyers, it’s not a quibble. The difference between regulate and adjust. Because adjusting doesn’t mean you can stop them.

I guess there might be a controversy about stopping imports of steel, but there is a difference between regulate and adjust. So, it depends on what the Supreme Court does with IEEPA. They could have a blanket ruling that could impact the Section 232 tariffs. [The Court] could also look [at the 232 tariffs] and maybe make adjustments. I think it’s good to look for signals that they might be willing to do that in the language of the opinion or opinions that come out in the IEEPA case, because the tariff authority is definitely tied up in all of this.

Responses have been lightly edited for clarity and length.

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