Donald Trump campaigned on tariffs, and won.
“To me,” Trump told business leaders in October 2024, “the most beautiful word in the dictionary is tariff.”
Like no other president before him, Trump imposed tariffs, raised them, lowered them, and used the threat of tariffs as a tool of foreign policy. There’s just one hitch: The U.S. Constitution gives Congress — not the president — the power to tax and to regulate foreign commerce. Over the years, Congress has delegated some of that power, giving presidents temporary authority to impose tariffs, to stop dumping of cheap aluminum or steel, for example.
But immediately after returning for his second term, the Trump administration asserted that he had practically unlimited tariff power under a 1977 law called the International Emergency Economic Powers Act (IEEPA). Beautiful or not, the word tariff isn’t mentioned at all in IEEPA, and no previous president interpreted IEEPA to include tariff power. When Trump’s tariffs were challenged in federal court, the administration lost at every level, and that culminated Feb. 20 in a 6-3 ruling by the U.S. Supreme Court saying IEEPA didn’t give Trump the tariff power he claimed.
Chief Justice John Roberts explained the decision in his written ruling: “Based on two words separated by 16 others … ‘regulate’ and ‘importation,’ the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time. Those words cannot bear such weight.”
Neither the AFL-CIO nor any major national union responded to the ruling. When the tariffs were first imposed last year, AFL-CIO President Liz Shuler said strategic use of tariffs can support domestic industry but has be accompanied by investments in the manufacturing base. Shuler also criticized Trump’s tariffs on Canada, saying they would undermine industries that support good union jobs on both sides of the border.
But while organized labor was silent, business groups applauded the ruling, and so did many leading Democrats and some Republicans, saying the tariffs raised prices for consumers.
The Supreme Court case had combined two lawsuits, and one of them included Oregon Attorney General Dan Rayfield as lead plaintiff, joined by 11 other states.
“He did it unilaterally in his office, without a vote in Congress, without public input,” Rayfield told the Labor Press in a Feb. 24 Zoom interview hosted by the group Indivisible. “That’s what should be shocking, and that’s what shocked the Supreme Court.”
Rayfield said he filed the lawsuit because the tariffs were unlawful, but also because they would raise the cost of living for citizens. “That has got to be one of the largest single tax increases on Americans in any one-year period in the history of our country,” he said.
Immediately after the ruling, Trump held a press conference calling the decision a disgrace, and within hours he imposed 10% tariffs on most imports under a different law, the Trade Act of 1974. That law allows the president to impose tariffs of up to 15% for 150 days without congressional approval.
What happens now?
The Supreme Court ruling says nothing about what to do about the unlawful tariffs already collected. In a written opinion disagreeing with the majority, Justice Brett Kavanaugh said the refund process “is likely to be a mess.”
Trump has repeatedly said that the tariffs on goods are paid by foreign countries, but in fact tariffs are paid by American companies listed as the importer of record when foreign goods enter the United States. The tariff may come out of their profit or it may be passed partly or wholly to consumers if they raise their prices. Exporters could also lower prices to absorb some of the cost, but there’s little sign that’s been happening: A February report by the Federal Reserve Bank of New York found that 90% of the tariffs’ economic burden fell on U.S. firms and consumers.
The federal government collected an estimated $130 billion in tariffs under the claimed IEEPA authority. To get the money back, tariff payers are suing in a special court that handles customs disputes, the United States Court of International Trade. The business news agency Bloomberg reported Feb. 27 that as many as 2,000 businesses have filed so far — including FedEx, Costco, Alcoa, and the tuna company Bumble Bee. Altogether, customs officials said at least 301,000 importers paid the IEEPA tariffs, but that figure includes individuals who paid tariffs on goods they bought overseas. If businesses get refunds, they wouldn’t have to pay them back to consumers even if they raised prices in response to tariff increases.
What about small businesses that might not be able to afford to sue? With them in mind, U.S. Rep. Steven Horsford (D-Nevada) introduced a bill Feb. 20 that would require full refunds of all tariffs collected under IEEPA in the last year. So far it has 42 cosponsors, all Democrats, including Andrea Salinas, Val Hoyle, and Janelle Bynum from Oregon. On Feb. 26, U.S. Senator Ron Wyden announced he’ll introduce a similar bill backed by 25 other Democrats; cosponsors include fellow Oregon Democrat Jeff Merkley and Washington Democrats Maria Cantwell and Patty Murray. Given Republican control of the House and Senate, it’s unclear what chance of passage either bill has.
BONAMICI TALKS TRADE
Last month, the Oregon chapter of the grassroots group Indivisible invited Northwest Labor Press editor Don McIntosh to interview Oregon First District Congresswoman Suzanne Bonamici by Zoom in front of a live audience of the group’s supporters. The interview took place Feb. 24, shortly after the Supreme Court’s tariff decision. Here’s an edited excerpt of the portion of the interview that discussed trade policy.
LABOR PRESS: What do you think is the right approach to trade? Is there a role for tariffs? Did we have it right before?
BONAMICI:
Well, we didn’t have it right before, but definitely there is a role for tariffs. We live in a trade-dependent state. We grow a lot of great things that are shipped overseas, and we want to have trade policies that benefit working people and that benefit our state. Tariffs are taxes, but tariffs have a place. Several years ago, Hillsboro had a big solar manufacturer with hundreds of jobs, and they were being undercut by the dumping of cheap Chinese solar panels, so both Senator Wyden and I went and testified why we needed tariffs in that case, because it was hurting Oregon jobs. Targeted tariffs can be used to incentivize U.S. manufacturing and to bring jobs back from overseas. But this chaotic, irresponsible, tariff policy? Donald Trump would just say one day this and another day that. It was incredibly chaotic and nonsensical. For example, we love coffee and tea in Oregon, but we don’t grow coffee, and we don’t grow most of the ingredients in tea. So our coffee shops and manufacturers, companies like Smith Tea in Portland, they were seeing really significant damage to their workforce, to their very marginal profit because they had these tariffs. Nonsensical. We don’t grow coffee and tea. We need tariff policies and trade policies that actually are fair and that incentivize U.S. manufacturing. But that’s not what this policy did. It was chaotic. It was illegal. Trade policy needs to be done right, and Congress has to have a role.
Okay, but he’s responding to SOMETHING. Annual U.S. trade deficits have been on the order of a trillion dollars a year. Do you think that level of trade deficit is damaging to the United States, and if so, what should Congress be doing differently, more than the sort of targeted tariffs you’re talking about that you and Ron Wyden supported?
Congress should be doing everything we can to incentivize U.S. manufacturing, obviously, but when you look at a lot of our U.S. companies, they get components and parts from overseas. So we have to have policies that are fair, that have labor and environmental protections in them. And when we worked on getting rid of NAFTA, rewriting the USMCA, we ended up with a compromise that had the support of AFL-CIO to the US Chamber of Commerce. It wasn’t perfect, but it was a heck a lot better than NAFTA. And you know what happened after we negotiated? Congress voted on it. When you have significant policies, you have to have Congress involved. I’ll be looking for policies that that help grow our U.S. manufacturers, that help create high-wage jobs, and that understand that that U.S. manufacturing is a good thing. We want those jobs in Oregon and in the United States, but we can’t have policies that are causing chaos, from sometimes day to day. And I asked some of the small businesses and even the medium sized businesses, how are you complying with this? They said it’s taking so much extra time because one day it’s one thing, and another day is it an on again, off again. Businesses can’t support that, and that’s not good for the company. Is not good for the workers. It’s not good for the families who depend on those jobs. We need to do more to incentivize manufacturing in the United States, and we need to maintain the role of Congress in these policies.
