by Marc Racicot, former Montana Attorney General and Governor
The Federal Circuit Court has ruled that many of the President’s tariffs were imposed illegally, and also that the President, unsurprisingly, exceeded his constitutional authority by unilaterally imposing what amounts to the largest indirect tax on consumers in memory, all without involving Congress.
The ruling was a temporary win for consumers, the economy, and the Rule of Law, at least until October 14, 2025, when the Supreme Court considers the President’s appeal. But, it was clearly another judicial loss for an erratic and unstable president who has unleashed a senseless global trade war against our allies and trading partners. It’s another instance demonstrating a well-worn pattern. He repeatedly sows chaos and reaps damage to the nation’s constitution, credibility and vital interests.
The President wrongly believes that tariffs are the remedy for most of the economic challenges we face today. Unfortunately, his tariffs are grounded in his unorthodox, 19th century mercantilist view of a world that no longer exists. He refuses to acknowledge the role and benefits of free markets and fair trade to the United States in a competitive global economy that presidents of both parties have embraced for the last 50 years. As we know from our history, isolationism and protectionism are failed policies.
Left unchecked in a fragile economy, the president’s tariffs could easily lead to recession, stagflation, capital flight, and lost jobs. The worst case scenario is another depression, as we know from the history of the 1930s after the Tariff Act of 1930. Aided and abetted by Congressional silence and impotence, Trump’s fiscally irresponsible increase of the national debt; his assault on the Federal Reserve’s independence; and his refusal to accept economic facts has left the nation to flounder in a sea of economic uncertainty.
The Supreme Court will ultimately decide the pending tariffs case. If it reverses the lower courts’ rulings and deems the President’s actions legal, then some variation of the scenarios outlined above will still unfold unless reversed by Congress. If, however, the Supreme Court upholds the lower court‘s decisions, as many expect it will, then the President must go back to where he was on March 31st, before his so-called Liberation Day, and start over. Only legally this time working with Congress.
One of the regrettable things about the mess the President has created is that he had, and does have, legal options under current trade law. But, they are limited by time and amounts, slower to implement, and often require investigations and reports that don’t suit the President’s precipitous and ill-informed judgment.
The President would also likely face claims from importers who paid his “illegal” tariffs when their goods cleared customs. Even if the U.S. Treasury takes an unexpected hit to pay the importers’ claims, how will the ultimate consumer get reimbursed, if at all, for paying higher prices on imported goods or parts that included illegal tariffs? That remains to be seen and perhaps only happens at the ballot box next November.
Regardless of how the Supreme Court rules, the Republican Congress needs to find the courage to intervene immediately to reclaim its constitutional authority over tariffs. If Congress does not stand up to Trump, then next year it’s highly possible voters will blame both the President and Congress, just as they did in the 1930s. After the Smoot-Hawley tariffs, Republicans lost 52 seats in the House of Representatives in 1930 and 101 more in 1932.
No matter what happens going forward, the President, with his autocratic compulsions and arrogance, has created an awful mess. The results for the American people will be even more chaos and pain in the form of inflated prices, lost jobs and higher unemployment accompanied by slower economic growth, or worse. In spite of his bluster and bray, the President simply doesn’t know how to lead a 237 year old republic of free people that has been the dominant force and leader of the free world for much of the last century, and still remains “the last best hope for mankind.”