The legal question at the center of the dispute concerns the International Emergency Economic Powers Act, which grants the president the power to “regulate … importation.” Two lower courts ruled that the statutory phrase “regulate … importation” does not include the power to impose tariffs. But their rulings are in tension with a nearly 50-year-old appellate ruling, which held that the phrase did empower the president to impose duties. Worse, both lower courts overlooked historical evidence that should be of considerable importance to the originalist justices on the Supreme Court.
The lower courts reasoned that tariffs are a tax, and that taxation and regulation are different. That led both courts to conclude that a statute empowering the president to regulate importation does not include the power to tax it.
But not all tariffs are taxes — at least not in a constitutional sense. The founders understood that tariffs could also be imposed as an exercise of the power to regulate foreign commerce. So the International Emergency Economic Powers Act is best understood as empowering the president to regulate foreign commerce through historical and traditional means: tariffs.
Historical support for the proposition that tariffs can be a means of regulation, and not just taxation, is found in the revolutionary pamphleteers, who noted that although Parliament could not tax the colonists without representation, Parliament could regulate commerce through tariffs. Support is also found in the writings of James Madison, Chief Justice John Marshall and the 19th-century Justice Joseph Story, as well as other sources.
Marshall wrote in 1824’s Gibbons v. Ogden that the “right to regulate commerce, even by the imposition of duties, was not controverted,” by the “illustrious statesmen and patriots” of the founding era. In an 1828 letter, Madison referred to the first Congress’s imposition of duties in 1789 as an example of tariff authority flowing from both the power to tax and the power to regulate commerce. And as Madison explained in that letter, he did not think it was problematic that tariff authority could flow from both powers. To the contrary, he thought “it was quite natural, however certainly the general power to regulate trade might include a power to impose duties on it, not to omit it in a clause enumerating the several modes of revenue authorized by the Constitution.” In 1833, Story’s “Commentaries on the Constitution of the United States” recognized that laying duties was “a common means of executing the power” to regulate commerce.
To be sure, the Constitution vests the power to regulate commerce by imposing tariffs in Congress rather than the president. And so, for the International Emergency Economic Powers Act to successfully delegate that authority, the law must survive scrutiny under the nondelegation and major questions doctrines. But neither doctrine poses a problem.